What Everyone is Missing in the Controversial Bitfinex and Tether Discussion

In evaluating the New York Attorney General’s recent bombshell announcement about Tether/Bitfinex, the one thing that I pointed out in the OAG Court Filing that I believe has been a crucial oversight by many in the crypto space is the fact that ‘Merlin’ (who we now know to be Giancarlo Devasini) was asking ‘Oz’ (who suspect to be Oz Yosef; related to Ravid Yosef) for Tether tokens.

As stated before, this heavily indicates that Crypto Capital Co. (whom Oz represents) was in control, in some facet, of Tether issuance.

Breaking This Down

1. Up to the point we saw that OAG filing a few days ago, we have all made the assumption that Tether & Bitfinex are one in the same. They are two different entities, but they are owned by the same entity (iFinex).

2. If you use the Internet Wayback Machine, we can clearly see that the same people that are behind Tether are the same ones that are behind Bitfinex. Giancarlo Devasini & Phil Potter are both listed as advisors/team members on the Tether website (back in 2014/2015-ish).

The easy assumption we’ve all made is that all Tether issuance is done at the behest of these individuals.

However, the messages between Giancarlo (Merlin) and Crypto Capital Co (Oz) firmly indicate that this is not the case.

Re-Reviewing the Unsealed Indictment Published by the DOJ on April 30th, 2019

Let’s combine what I just wrote above with the fact that the DOJ recently released an unsealed indictment against both Ravid Yosef and Richard Fowler.

We know that Richard Fowler is in custody, but Ravid Yosef is not, according to our knowledge. Assumedly, there is an open warrant for their arrest and perhaps law enforcement is looking for Ravid Yosef.

Now, keep in mind that Richard Fowler was already arrested at the time that the OAG report came out (April 30th).

Source: https://www.omniexplorer.info/address/32TLn1WLcu8LtfvweLzYUYU6ubc2YV9eZs

We can see that the issuer address was changed on April 24th, 2019.

Of course, there are no conclusions that can be made from this alone, but it begs the question of whether these events are all related.

Mapping Out What We Know Thus Far

1. We have strong reason to believe that Crypto Capital Co. has some sort of control over the issuance of Tether (based on the OAG filing)

2. We know that Richard Fowler and Ravid Yosef were indicted on April 30th.

3. Richard Fowler was arrested sometime on or before April 30th (more than likely before).

4. Both Richard Fowler and Ravid Yosef were running GTS (Global Transaction Services) and this is Crypto Capital Co.’s parent company. So, they were essentially running Crypto Capital Co.

5. The ‘issuer address’ for Tether suddenly changes on April 24th.

Making Some Educated Guesses Based on What We Now Know

At first, my initial guess was that the issuer address changed on April 24th to preempt the OAG report that came out.

However, I’m not sure that this is the case. Unless Crypto Capital Co. has an ‘inside man’ (which I’m sure they don’t), then they probably were no more aware of the exact time that the OAG would file with the clerk’s office in Manhattan than the rest of us (they might have had an idea this was coming though).

So, I think there is something else that prompted the change of the issuer address.

My suspicion is that Richard Fowler was probably arrested around April 24th (would imagine that the Feds swooped in to get him before the OAG filing came out because everyone would’ve known they were in hot shit at that point).

I believe that this is what prompted Crypto Capital Co. to shift the issuer address because, obviously, if Richard Fowler (and perhaps Ravid Yosef at some point) are in custody, then there is no way that they would be able to issue more Tether tokens.

As to who has custody/responsibilities of issuance now is anyone’s guess.

Why Tether/Bitfinex is 100% Insolvent

The reason behind this is actually really, really simple. Remember when Stuart Hoegner reported in his affidavit about 2–3 days ago that $2.1B/$2.8B of Tether/USDT was backed by actual cash/assets and the rest of it wasn’t?

Tether Stablecoin Only Has 74% of USDT Backed by Cash and Fiat Equivalents, Says Legal Counsel

Most people took that at face value and ran with the narrative of, “Oh, now we know Tether is backed 75% now instead of 100%!”

But one crucial thing that we’re not looking at, are the New York Attorney General’s Orders concerning the controversial stablecoin USDT.

Let’s take a look at them:

This was taken from the OAG’s website, which you can find here: https://ag.ny.gov/press-release/attorney-general-james-announces-court-order-against-crypto-currency-company-under

Here is the Gist of the Order

On April 25th, 2019, the OAG (Office of the Attorney General; New York) ordered Bitfinex/Tether to do the following:

A) Not touch **any** of the money in Tether’s bank/reserves (going in or out)

B) Not to pay any employees (“taking personal distributions or dividends from the reserves”)

C) No more ‘dissipation’ of the U.S. dollar assets which back ‘Tether’* (we’ll explain what this means)

D) Deleting correspondence/emails/documents/financials/etc.

Source: https://definitions.uslegal.com/d/dissipated-asset/

What the Order Means in Laymen’s Terms

So, in a nutshell, Tether funds cannot be used to pay employees or anyone else, they aren’t allowed to redeem any Tethers (dissipation), and the money cannot be moved or touched to do anything for any reason.

Here is Why This is Important

Tether is still operating!

Funds are still being sent back to the treasury and from the treasury.

Bitfinex is planning an IEO, where they plan to raise $1B worth of Tether (at its current pegged value of $1).

This Order Makes Tether 100% Insolvent *AND* in Breach of the Law

Given this information, the following conclusion has to be made:


A) Bitfinex/Tether are adhering to the court order and they are not redeeming Tethers for anyone at any point in time or minting new tokens based on money that they are receiving. This would mean that Tether is operating as a ponzi and a fraud in every sense of the word because the tokens are literally unredeemable by law at this point in time.


B) Perhaps Bitfinex/Tether are attempting to “make things right” and they are redeeming any and all Tether being sent back to the treasury and they are also minting Tethers based on what they have received as well. If this is the case, then they are operating in flagrant violation of the OAG court order, and this puts them at a major risk for a subsequent order being filed that asks for the cessation of ALL operations.

There is no way around ‘A’ or ‘B’.

That is why the situation with Tether/USDT is as bad as it is and why myself and others are not spreading ‘FUD’, but rather using common sense to dissect the situation and see that this is clearly a runaway train that is headed off of the tracks.

Things Just Got Worse for Bitfinex & Tether: Latest Crypto Exchange and USDT Updates

The following summary above was composed by Zerononcense researcher: James Edwards

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