Robert-Jan Den Haan, a contributor to the Block who has been researching the Bitfinex/Tether situation for over a year, talks about how Bitfinex found itself without access to $850 million of its own money, how the trouble crypto companies have maintaining banking relationships played into that, and the company — or, rather, group of related companies — that is the source of its woes. We also cover where at least a portion of the money is now, and why it likely won’t be made available soon, how a case involving Reginald Fowler and Ravid Yosef is related, and why Bitfinex will likely be conducting an initial exchange offering of $1 billion. Plus, we discuss why the price of Tether has barely budged despite being only 74% backed.

Crypto workshop at Omega Institute!

https://www.eomega.org/workshops/virtues-of-the-crypto-revolution

Thank you to our sponsors!

CoinDesk: Since 2015, Consensus has been recognized as the most influential blockchain and digital assets event of the year. Hot-button topics such as adoption challenges, privacy,blockchain innovation, capital formation and more take centerstage as experts and pioneers give voice to the new developments and innovations occurring around the globe. Don’t miss this three-day experience! Register today: www.consensus2019.com. Use promo: UNCONFIRMED300 to save $300 on your pass.

CipherTrace:  https://ciphertrace.com/unconfirmed

Episode links:

Original story about NYAG court order against iFinex: https://www.coindesk.com/bitfinex-ny-prosecutors-tether-850-million-allege

Why at least part of the $850 million was seized (paywall):

https://www.theblockcrypto.com/2019/04/30/no-bitfinexs-seized-850-million-is-not-likely-to-be-unfrozen-within-weeks/

Original indictment revealing involvement of Reginald Fowler and Ravid Yosef: https://www.theblockcrypto.com/2019/05/01/indictment-reveals-new-clues-to-the-crypto-capital-situation/

Tether backed by 74% cash and cash equivalents:

https://www.coindesk.com/tether-lawyer-confirms-stablecoin-74-percent-backed-by-cash-and-equivalents https://www.theblockcrypto.com/2019/04/30/bitfinex-reveals-stablecoin-is-only-74-backed-by-cash-says-its-simultaneously-addressing-requests-from-nyag-doj-and-cftc/

Bitfinex and Tether General Counsel Stuart Hoegner’s statement to the NY Supreme Court regarding the OAG’s preliminary injunction:

https://www.scribd.com/document/408190972/Stuart-Hoegner-Affidavit-4-30#from_embed

Indictment from Southern District of New York against Reginald Fowler and Ravid . Yosef: https://www.justice.gov/usao-sdny/press-release/file/1158991/download

Reginald Fowler’s Master US Workbook and $345 million sitting in banks:

https://www.theblockcrypto.com/2019/05/02/us-government-requests-detention-for-defendant-at-center-of-bitfinex-imbroglio-describes-master-us-workbook/ https://www.coindesk.com/u-s-doj-moves-to-detain-defendant-in-crypto-shadow-banking-case

Reginald Fowler and Ravid Yosef charged with providing shadow banking services to cryptocurrency exchanges:

https://www.justice.gov/usao-sdny/pr/arizona-man-and-israeli-woman-charged-connection-providing-shadow-banking-services

Bitfinex’s IEO: https://www.coindesk.com/bitfinex-is-planning-to-issue-an-exchange-token-shareholder-says

Already $500 million subscribed:

https://www.coindesk.com/bitfinex-shareholder-provides-more-details-about-potential-1-billion-token-sale
Meltem Demirors and Jill Carlson discussing Tether on What Grinds My Gears:

Absolutely hilarious satire on the whole saga: https://coinjazeera.news/federal-reserve-conspiracy-and-phil-potters-tether-scam/