Bitfinex & Tether Fraud Mismanagement – What Is USDT All About?
Bitfinex & Tether Respond To Allegations Of Of Fraud And Mismanagement
Bitfinex and Tether have been engulfed in thoroughly credible accusations from all corners of the crypto community of market manipulation and mismanagement of assets. Late on Thursay, both companies hired an outside spokesperson to make a statement on their behalf.
Ronn Torossian, a PR executive, founder of 5W Public Relations, dismissed the accusations as scare-mongering by questionable actors in the community. Claiming that Bitfinex is “committed to becoming the most transparent crypto exchange in the industry”, he called out the anonymous blogger, “Bitfinex’d”, who wrote a series of Medium posts and Youtube videos accusing the exchange of malpractice.
Shooting The Messenger
He said of the blogger, “Who is Bitfinex’s biggest critic? An anonymous online Twitter user who throws allegations around without ever revealing his or her own identity. Whenever someone lobs accusations and attacks behind the veil of anonymity, one has to question their motives.”
Folks, this is known as argumentum ad hominem. Instead of trying to answer to valid accusations, the ‘aggressive' PR spinner attacks the person who is actively highlighting Bitfinex's malpractices.
According to Torossian, Bitfinex is not hiding, “far from hiding in anonymity, Bitfinex is led by a strong management team.”
When Phil Potter, CSO of Bitfinex, was asked in an interview who was the person in ultimate control at Bitfinex, he hummed and hawed without ever answering the question directly. Potter seldom answers questions directly.
Where’s The Tether Coming From?
On concerns of Tether issues being backed by fiat reserves, Torossian stated that a full audit “will be released as soon as possible.” It is important to note that Bitfinex has been promising a third party audit ‘as soon as possible' since 2016.
Torossian conceded that Bitfinex has lost “a number of U.S.-based banking relationships” including Wells Fargo, but the exchange “was able to maintain and add to its roster of banking partners around the world, providing the vast majority of its customers with a diversified and resilient banking network to provide consistent liquidity.”
As of right now, the only bank to have been established as banking with Bitfinex is a little-known Polish bank with less than $15 million in assets.
Finally, Torossian claimed that:
“Bitfinex abides by all existing laws and reporting requirements such as KYC/AML and works closely with financial regulators, law enforcement, compliance personnel, and financial institutions to provide the highest possible level of protection and service for its customers.”
Which is probably why most reputed financial institutions refuse to conduct business with Bitfinex.
Bitfinex Owns Tether
Eureka! After Bitfinex's Phil Potter and Giancarlo Devasini being revealed in the Paradise Papers leak as having founded Tether in 2014, even Torossian couldn't spin it any other way, as he confirmed Bitfinex held the majority stake in Tether.
Let's be honest, why else would they both hire the same PR guy who only peddles ponzi schemes?
Ronn Torossian's ‘Qestionable' Background
Torossian is known for his aggressive, loud, crass, buzz-obsessed PR tactics. Atlantic Monthly writer Jeffrey Goldberg called him “the most disreputable flack in New York.” Gawker's Hamilton Nolan wrote that Torossian “embodies the public's worst ideas about what a PR person is: loud, brash, more flash than substance, dirty, manipulative, amoral, and, in the end, not particularly bright.”
In 2008, his company, 5WPR, was discovered to have posted fraudulent comments to defend Agriprocessors, a kosher food company that was a client. Torossian is also accused of being associated with a possible ponzi scheme, Jetsmarter, as its CMO.
Jetsmarter, a proposed ‘Uber for private jets', raised hundreds of millions from private investors in the hopes of seeing the company go through an IPO. After promising affordable private jets to its customers, the company tweaked and scrapped the initially promised benefits. Customers started accusing the service as a ponzi scheme, where instead of money, some investors would receive flights.
The company's president, Edward Barsky, was arrested on charges of embezzlement. True to Torossian's aggressively cynical PR tactics, Jetsmarter makes its customers sign a non-disparagement clause and ramrods reporters to publish positive reports.
Given that the men behind Bitfinex have been proven to be contradictory, cynical and disreputable, it shouldn't surprise anyone that Bitfinex/Tether hired a PR guy with an equally sordid reputation to confront accusations on their behalf and avoid washing their dirty linen in public.