Bitfinex’ed continues his story about Tether. Part II
Anonymous under the name Bitfinex’ed continues to answer questions about Tether and Bitfinex and predicts the stock market a bleak future. The first part of the interview can be read here.
Talk about the connection with the Tether and Bitfinex. For a long time it did not advertise.
The communication was. Bitfinex just tried to hide it. In 2016 Phil Potter acknowledged that Bitfinex is the main owner of the Tether. But despite his confession (audio recording is in the network), people still believed the lie of the staff of Bitfinex on Reddit. They wrote that the two companies are not connected. Later, representatives Bitfinex began to write about the “minority owner” of “overlapping investment”, while not a “Paradise” documents, which were evidence that the Tether is almost completely controlled by the people running Bitfinex. Only then can the community believed that the Tether is owned and controlled by Bitfinex, though I’ve talked about this before and cited specific evidence.
Let’s discuss what happened with Tether. You say that initially it was used instead of shares for payments to account holders from the United States who suffered losses as a result of “hacking”, right?
The victim, who for some reason do not convert tokens BFX in stock, mostly transferred them to tether. I have an audio recording of speech Phil Potter, where he admits that as originally planned. Phil Potter said he wanted to use the Omni Protocol to convert BFX token in tokens Tether that legally would be the repayment of debt with a token Tether, which, in fact, currency is not.
And it would have saved their reputation?
Yes, many believe them, but it was just a pyramid scheme. When they paid the people who could not go in the campaign, you know — these people can’t withdraw USD. The only possible way for them to get your money — buy bitcoin. This caused an artificial increase in the price of bitcoin, and as a result, Bitfinex it traded with a premium of $200. Some began to panic due to possible legal action and problems with withdrawal. Some credited the stock exchange at the expense of lost money (at least on paper)… to get out of this situation it was possible only by purchasing the bitcoin. Prices on other exchanges follow the price on Bitfinex. This was not due to any “bullish” news. Simply the market is not allowed to withdraw funds from the accounts that have been charged credits. So nothing was impossible to withdraw.
That was before the sharp rise in the issue tether?
You are absolutely right.
So what has led to an increase in emissions tether?
Approx 18 APR Bitfinex and Tether finally admitted that can not serve deposits and withdrawals. Tether announced that it will no longer produce tokens until the problem is resolved. Despite this, they still released a bunch of new tether. I then sensed something was wrong. Issue tether has begun to grow rapidly along with the price of bitcoin, with new banking partners Bitfinex/Tether or the resumption of the service of deposits and withdrawals was not.
How to Tether explained that they release new coins, not provided dollar deposits?
They never explained. They continued to blame various “companies”, but didn’t say anything specifically. The web site also Tether don’t work. When people tried to register on the website, confirm they did not come. Upon entering the site, users saw a message stating that deposits and excretion are not supported.
How much do you think coins are not provided dollar deposits?
A significant part was released without deposits. The people behind Bitfinex/Tether, very smart. You can’t do that trick, not being fancy. They released them without collateral, used for the manipulation of the market, and when the received profit, return it in its banks. Purchasing tether for the purchase of bitcoin is contrary to logic. Why do that when Bitfinex are denied banking services, and she can’t legally do their banking! Why someone would spend billions of dollars on buying tokens Tether when a web site Tether not working properly, there are no repayments and the shareholders acknowledge that the Tether is not acting legitimately? You can just buy bitcoin for USD on more reliable exchanges.
What about “report Friga” [statement of financial position Tether prepared by Freeh, Sporkin & Sullivan, LLP. Louis Frech — a former FBI Director]? , Which shows dollar-denominated deposits in the Bank. How did they do it?
I suspect that the report Noble Bank is a lie. In 2015, one of the Bank employees stated that the former CEO of Noble Bank John Betts asked him to falsify statements. I haven’t started to study this question. The accusation was never proven, but if you combine this fact with what is happening now, we can assume that then sounded the first bell.
Let’s talk about bets and Tether. Is there a connection between them and Mt.Gox?
Yes, the founders of the Tether initially tried to capture Mt.Gox. Frich, John Betts and Brock pierce tried to restart Mt.Gox.
Louis frig too?
Yes, Frech participated in the activities of Sunlot Holdings, who wanted to re-start Mt.Gox.
What do you think, was whether tether anything else except buy and sell bitcoins the owners of the company?
I don’t think any company operating legally, would buy tether billions of dollars. Rather, they released them only to manipulate the market. They had the advantage not possessed Mt.Gox. Mt.Gox released their inner stablein, traded only on the stock exchange. And Bitfinex using Tether can print money for all exchanges, trading tether.
Fluctuations of the Tether in the last two years (CoinMarketCap)
In early January the production decreased. What happened?
Scared of the subpoena of the Commission on trade commodity futures (CFTC). Then in January, when the market collapsed, they had to reduce the print speed in General is ridiculously level. You know that the largest number of transactions with US dollar in the history of bitcoin falls on the same day when they received a subpoena from the CFTC? Nifty, right?
Then they parted with their auditor, Friedman LP. Who stopped cooperation, Bitfinex or Friedman?
Bitfinex knew that an audit is impossible, even before they began work. It was made just for PR. I think Bitfinex just fired the auditor.
When Tether started to work with Noble?
I don’t know exactly when he began the relationship with Noble. But Phil Potter in one of his interviews expressed a desire to involve the Bank. Then I thought that they just buy a small Bank, and then will use it for their own purposes.
What research exchange BitMEX, which showed a sharp increase of deposits in the accounts in Puerto Rico?
It was in February. The truth is that BitMEX knew where they were serviced, but wanted to make it look like research. So they created a kind of parallel reality.
Do you think that they [the exchange’s trading tether] were in cahoots?
Any exchange that trades tether, is corrupt and is part of the Scam Tether. We all know that Tether fraudsters. If trading of the exchange tether played by the rules, at the moment when the Tether was fired auditor, they would have stopped trading with all the pairs with tether, leaving only the possibility of withdrawal. And then all the tether would return to Bitfinex for repayment. And would repeat the story that we saw recently, when the prices of Bitfinex jumped by $1000 compared to other exchanges, trading in the U.S. dollar. Trading exchange tether know about it. The essence of fraud Tether is chtodazhe supposedly law-abiding exchange know — this is a Scam, but if they oppose it… their business will also suffer…
Why tether was discontinued at the end of January? And is it true that banking services provided to them ING?
ING was “padding”. It quickly ended. Whenever it becomes known that they use the services of the Bank, he closes the account. The problem here is this: in order to send money, we need information about the Bank account. It’s impossible to hide.
What happened to Noble? If the relationship were close, why Tether and Bitfinex refused them? And why did John Betts left?
Former employee Bitfinex admitted on Twitter that Betts left with a “Golden parachute”. But the Noble was no longer needed and has become a source of problems for the Tether.
By issues you mean to US regulators?
Everyone in the community knew that they are using Noble. Also, everyone knew that the custodian Bank BNY Mellon. Then it became known that BNY Mellon is no longer the custodian.
So they solved the problem? Do you think that BNY Mellon did not know about the Tether, when they worked with Noble?
Possible. In most cases, the big banks don’t know what they’re dealing with, as in the case of Bitfinex/Tether. They are most likely lying to banks about the nature of their business. That’s why their accounts as quickly close as soon as all becomes known.
One of the arguments that I have heard repeatedly from hontarov: “Well, what if there is no real dollars, providing a tether? The US dollar is also unsecured, and no one to care not.”
Pure madness. People bury their heads in the sand because they are afraid of the truth. Tether is an enhanced version of the Mt.Gox. Mt.Gox just released the coins for a few hundred million dollars. Have you noticed how much they want to get ETF? They need a mad rush of “new” money to Tether collapsed.
Tether (USDT) is now found in half of all operations with bitcoin; often Bitfinex is the largest platform for the exchange of bitcoins (CryptoCompare).
Another argument that we hear often: exchange illuminate only a fraction of all actual transactions take place with bitcoin, so Tether should not be a problem. How would you respond?
If you are talking about the so-called OTC market is nonsense. I just spent an OTC deal with yourself on a billion dollars here and volume. In any case, over-the-counter transactions are made at spot prices.
And spot prices are determined…
Spot prices are determined by the exchanges, mostly those traded tether.
A few days ago a former employee Bitfinex has published a register of OTC applications for tether for a few days and said that the register was always there. The price fell below the so-called purchase requisition register, which he provided.
Where he published it?
@IamNomad. Former employee. I suspect that he is a shareholder, although it has denied this. The staff of Bitfinex are not known for their honesty and openness. Somebody once asked Phil Potter, who runs Bitfinex. Phil Potter was speechless and could not answer this question. By the way, I have this entry. The truth is that the CEO of Bitfinex is not the man who runs it.
[Editor’s note: the Person writing under the name “@IamNomad” on Twitter, deniesthat is a former or current employee Bitfinex and cites as evidence the criticism of the exchange on Reddit, which he had previously published.]
Who is in charge of Bitfinex?
Who is he?
He was a plastic surgeon, and then began to distribute unlicensed software, and then became CFO of crypto currency exchange.
Distributing unlicensed software?
Absolutely, chief financial officer Bitfinex was arrested in the 90 years for selling counterfeit software. This is not what you expect from a man who manages billions of foreign dollars. He had to pay compensation to Microsoft. About $60 thousand
So why Tether suddenly having trouble?
Noble Bank collapsed, but I suspect that there were other problems about which the public is not yet known. Can’t say what it is, but I’m sure we’ll learn about them in a few weeks. Every time something happens, they are doing me some crap. It is a pity that I do not trade. Could be a good idea to cash in on their news.
Can you clarify?
Every time when there’s another crisis, they’re sending me little surprises via e-mail. It always happens before it happens some shit. Yesterday was as usual.
Something that, forbidden to do. It is one more proof of their madness.
Threats? Viruses? Tickets for the musical “Hamilton”?
I’d rather not say.
But it is precisely from Bitfinex/Tether?
Or from someone from their shareholders. It is clear that he possesses inside information.
How do you feel about adjustable stabilium, for example, Paxos and Gemini?
Adjustable stabilini doomed. They exist only because people think there is a demand. No, the only place where there is a demand for stabilini — unregulated exchange. Regulators will not give concessions to the exchanges, trading stablename if they do not comply with KYC/AML. To trade adjustable stablename, you must follow the same guidelines followed by conventional foreign exchange. Only then you can safely use the services of banks. Service adjustable stabilini banks will not risk because they will have problems if exchange does not meet the requirements of KYC/AML. Therefore, it is likely that they will close accounts after they reach a certain size.
You actively corresponded with Nouriel Roubini on Twitter. If he’s talking about cryptocurrency what, in your opinion, was that wrong?
He’s pretty well versed in this issue, but uses sharp language. I don’t think cryptocurrencies will survive the collapse of the Tether. Even if they solve some of the serious technical problems such as scaling, one is not to trust them.
I would like to ask you about bitcoin. You said that you were his supporter at an early stage.
Yes, I was a big supporter of his. But when I began to explore the question deeper, we realized that we just recreate the existing banking system with all its problems, but making it worse. When people protect Tether with the words: “But is conventional banks do not do the same?”, it is clear that we failed. Bitcoin is used mostly for trading, not for Commerce.
“We”? Do you think that the person made a contribution to the development of bitcoin?
By “we” I mean the community of Bitcoin. It never dealt with stock fraud, despite overwhelming evidence.
What about other systems like Ethereum?
They are doomed. Solutions for scaling, they develop, lead to centralization. You can just use Amazon Web Services and leave it at that. In addition, Ethereum is centralized around developers.
Will survive at least some kind of cryptocurrency?
It depends on what you mean by “survive”. If you mean that the code exists and someone for fun mines the coins, Yes. Bitcoin will survive as a project, like Ethereum. Someone will mine them just for fun. The cost will be negligible. It will not be zero, but for most people it will still zero. If the price reached $19 000 and then dropped to $10-15, for most people is still that zero.
It is this, in your opinion, will be the price of bitcoin? About $15?
Everything that happens after the middle of 2013, in essence, a combination of fraud, Mt.Gox and Bitfinex fraud. And what is happening now is a crisis of confidence. A lot depends on when the exchange will begin to bring to justice. As soon as the price drops to $1000 or below, stock markets will fall suits. Imagine you are a car dealer, and read a message stating that the cars you sell with a 100% chance the airbag will sooner or later be revealed and will kill the driver. What do you think will happen if you, knowing this, will continue to sell cars? Now imagine that the exchange Coinbase sells bitcoins, knowing that the market is manipulated Tether and Bitfinex. And at the moment it is not a secret that Bitfinex and Tether are doing it.
Fidelity recently announced that included in cryptogra. Do you not think that the history of Tether influenced their decision?
No, they are likely to consult the so-called “blockchain advisors”, and Coinbase had recently closed its “corporate division” due to lack of demand. So any company that wants to do bitcoin can do right now.
So it was a publicity stunt or a bad move?
It is a good way for them to get positive PR. It’s as if they changed their stock Ticker to “Fidelity Blockchain” or “IBM-Blockchain”. While there is demand, but it will disappear after Tether.
How do you feel about the technology of the blockchain? Can it be considered separately from cryptocurrency?
The only use of the blockchain is bitcoin. For any other purposes, use a damn database. For ICO you can also easily use the database on its web site. In any case, it is the centralization around the Issuer. It makes no sense to turn it into a so-called “blockchain” with mining. Even for Tether blockchain is not needed. In any case, he centralized around the dollar. Just use for API authentication web site with public/private keys the same way as bitcoin.
That is, the use of smart contracts, for example, in real estate…
In my opinion, useless. It also will apply throttling rules, if you’re talking about the tokenization of real estate. We call them REIT (Real Estate Investment Trust, real estate investment trusts).
How about keeping track of ownership rights and other rights?
Again, this can be done using the database. The problem of the blockchain is that if someone loses their private key, the transfer is no longer possible. It’s a headache for no reason. What to do if someone refuses to hand over the key of the asset that he legally obliged to give? If the smart contract that gives someone a way to take control of the owner of the private key… as it happens with Gemini USD… just use the database. Anyway, it’s centralization. Property is centralized around the state, like it or not.
You are now more inclined to a regulated, not a free market? If not, how would, in your opinion, the free market could solve problems with the exchanges?
I like the idea of the free market. The free market works because people compete for business, but it seems not working for kryptomere. One would expect that more legitimate exchanges will condemn Tether and Bitfinex for the opacity in order to attract traders and customers with their exchanges. I suspect the reason it’s still not happened is very simple. The true essence of the scheme Tether that they are, in fact, created a situation of mutually assured destruction, and it was a brilliant move by Phil Potter. Tether scheme so cunning that, if more legitimate exchanges will speak against it, they will go down with the Tether. If you will lose the credibility of the Tether, all deem it a Scam bitcoin. The exchange has invested millions, so they quietly ignore Tether in the hope that enough will come in new money, and when Tether do burst, it will just be a small deviation of the prices. Phil Potter is very clever.
But you think that everything will happen differently.
Yes. These “new money” is not going to go in. All of the crypto currency exchange and investors are terrified Tether.
Government regulation could be a solution? Maybe I just need to draw conclusions and to start playing by new rules?
We don’t need new rules. Those that already exist, that’s enough. They just need to force these to comply with the rules. Exchanges should be regulated the same as banks.
Sounds not is libertarian.
Unfortunately, after all this history my views have changed. Banks are not angels. But what we do in the field of cryptocurrency, making the banks look like angels. And, in my opinion, one of the main problems — companies that are engaged in high frequency trading.
It is also necessary to regulate?
Don’t know yet. I do not think that this market should be similar to a casino. People have a right to gamble, but only if the rate — not the lives of others.
If there is a crash and the speculators leave the market, perhaps the investment in technology will be able to save him?
The collapse should be epic, so investors became indifferent to the price of the asset. The problem here is this: when someone offers to improve the code, all start to worry that the update will negatively affect the price. Nobody wants to kill the goose that lays the Golden eggs. No matter how good the updates are, there will always be those who are against it, because change can threaten their future.
Can you name cryptosuite people who deliberately distort information or publish false data?
Don’t want to name names. There is a lot of corruption. All this must be destroyed.
And there are those who say sensible things? You’ve already named some names. Anyone else?
Many did everything correctly, but then made stupid mistakes, but I won’t call their names.