Acknowledgements: I would not have been able to complete this as thoroughly as I did without building off existing work. It needs to be pointed out that years ago u/SpeedflyChris ( archive) pointed out these same connections. I also relied heavily on a tool created by Aleš Janda.

In January of 2015 Bitstamp was hacked in what they described as a phishing attack. ( Archive) These funds were withdrawn to 1L2JsXHPMYuAa9ugvHGLwkdstCPUDemNCf (referred to as 1L2 for the remainder of this piece for convenience) at first. Bitstamp also sent funds to 1AXsTbi4sSH1M5hccgdEVn5et9xFd7Bxpd (referred to 1AX) and 16KYFJiAoM4aX82xw2V3YBHX72trWNhz48 (referred to as…

Tether has released a brand new attestation (archive) (my copy) showing that they are fully backed! Well, it shows that for at least one entire minute Tether was fully backed.

The most important thing to establish upfront is that this is NOT the report that is mandated by the New York Attorney General in their settlement.

This assurance is looking very specifically at the status of Tether’s reserves as of February 28th 2021 at 11:59 PM UTC.

The auditing firm reviewed Tether’s Consolidated Reserve’s Report, which is included at the end of the document and is simply a statement by…

This is one of my most in-depth analyses yet. You can find the interactive version of this article here: note this may take a minute or two to build, but it allows you to manipulate my code and see how I worked through the assumptions. Otherwise I will do my best to recreate it below:

Fei Protocol

The Fei protocol is the mechanism by which the Fei stablecoin is issued. It uses a mechanism called ‘Direct Incentives’ in order to maintain stability. TRIBE is the governance token that controls changes to the protocol. This token is issued to people who hold the…

Bitfinex/Tether Executives and Founders and what they did beforehand:

- Bennett Tomlin (@BennettTomlin) March 27, 2021

Stuart Hoegner, the General Counsel for both Bitfinex and Tether, used to be Director of Compliance for Excapsa. ( Archive) Excapsa was notorious for being the parent company of Ultimate Bet. Ultimate Bet allowed some of the poker players on their site access to a ‘God Mode’ that allowed them to see other players cards. ( Archive) This does seem to have been occurring during Stu’s tenure.

Phil Potter, the former Chief Strategy Officer and Director of Bitfinex and Tether, was once profiled in…

I wrote a piece about Dai in which I suggested it was vulnerable to certain black swan events that I felt were not being given appropriate consideration. I do still feel that those are accurate opinions, however, I have also come to appreciate more of the ethos surrounding Dai.

Why Dai?

Dai serves a valuable purpose. It was intended to be a censorship resistant stablecoin, which is in sharp contrast to the wide variety of stablecoins like Tether that can be easily censored.

For myself, censorship resistance is the defining feature of what makes cryptocurrencies valuable and interesting. Traditional finance and computers…

If you spend any significant amount of time on crypto twitter, especially as a contrarian or a skeptic, you will inevitably come across accounts that seem less than genuine. These bots, sock puppets, or intelligence deficient accounts are a nuisance, but their role in crypto is more complex than their limited speech will convey.

Often while on Twitter I will get angry replies from @firstname12345678 or similarly constructed accounts. Often these accounts will never tweet themselves and will only tweet in response to others. They are frequently irrational, angry, and seem to fail to grasp the nature of reality. Where…

Recently, Binance Chain and Binance Smart Chain have increased in usage thanks to congestion on Ethereum.

Also recently, several people have started posting politically censored material on Binance’s chains.

This opens up several ethical questions that I think are valuable for anyone involved in crypto to ruminate on.

Censorship resistance is a valuable tool. It allows for people to transact, create, and act in manners that their government or other authorities might try to stop. It is the fundamental defining feature that gives cryptocurrency meaning.

Binance Chain and Binance Smart Chain seem by all measures to be much more centralized…

First, I think it is valuable for us to establish several facts before we start creating a speculative narrative.

  1. From March of 2017 until September 15th of 2017 Tether did not have a bank account. (Settlement) (My copy)
  2. The only account they did have was one in the name of their General Counsel, Stuart Hoegner, at Bank of Montreal. This account never had more than $61.5 million dollars in it. (Settlement) (My copy)
  3. During this period the number of Tether’s issued increased from about 50 million to 442 million, each of which was claimed to be backed by the corresponding…

Bitfinex and Tether have settled with the New York Attorney General. The settlement document can be found here. ( My copy) Many seem to find the document exculpatory, but I find it damning.

As I have discussed previously, Bitfinex and Tether are dishonest and we are now getting a better view into just how dishonest they are.

Crypto Capital Corp is a licensed (in Panama [for one of the corporations]), unlicensed ( My copy) (just about everywhere else) money transmitter and payment processor. They partnered with a variety of cryptocurrency companies including: Kraken, Bitfinex, Quadriga, Bitmex, Coinapault, and more. They are implicated in wire fraud, bank fraud, embezzlement, and hundreds of millions of dollars worth of money laundering for the Colombian cartels.

The reason Crypto Capital Corp matters to me is twofold: first, they appear to be an utterly fascinating fraud entirely on their own. …

Bennett Tomlin

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