Tether and Bitfinex Served with Subpoena by the CFTC

in #tether7 years ago

tether crash.PNG

Crypto markets are a sea of red again today, on account of a Bloomberg article revealing both Tether and Bitfinex have been served a subpoena by the CFTC.

Bitcoin dipped, and Tether briefly crashed to $.97, only to return to parity with the US dollar within a matter of minutes.

This, of course, after plummeting the previous day to lows not seen since April of last year, perhaps on market activity by a group of insiders in the know.

Not that the announcement itself should come as genuine news to anybody following the whole Tether/Bitfinex soap opera over the last six months or so.

This because Chris Ellis, an employee at Bitfinex, strongly alluded to the possibility of an official investigation of the exchange, and accompanying gag order for management and employees.

Through the use of a clever trick known as a 'Warrant Canary,' Mr. Ellis made it known, without outright saying so, that Tether and Bitfinex had been served a warrant or subpoena of sorts.

”Just what the Heck is a warrant canary?,” you might ask. Well, it's a loophole allowing individuals and service providers the ability to disclose, through pictures or text, that a subpoena has not been served.

Strictly speaking, it can only be used to prove a negative,i.e., that an individual or company are not under investigation, but if used consistently everyday for an extended period of time, its mere absence one day is enough to tip off all concerned parties that something is amiss.

Which is exactly what happened to Mr. Ellis' Twitter account in early December, when two red bird icons (presumably one corresponding to Tether, and the other one to Bitfinex) were removed from his profile.

According to Bloomberg, the subpoena was served on December 6, so the dates match up perfectly.

The content of the writ is, at this point unknown, although it's only logical to assume it pertains to Tether's activities, and suspicions the company is creating money out of thin air.

Tether and Bitfinex were incorporated in the British Virgin Islands, a known tax haven legislation with strong bank privacy laws.
At this juncture, it is unknown whether both companies complied with the subpoena, and if they did, I have my doubts the CFTC has had the time to go over the evidence and reach a verdict.

After all, it's the US government we're dealing with, and knowing how government bodies operate, it is highly unlikely they'd move that quickly.

Furthermore, what incentive do the kingpins of what could possibly be the most brazen counterfeiting operation of all time, to even comply with the CFTC's request?

If Tether is indeed a fraud, Phil Potter, Giancarlo Devasini, J. L. Van der Veld, and the rest of the crew will be facing expansive prison sentences no matter what, so the fact Tether continued to issue new USDT at an unprecedented pace after the subpoena, hardly proves everything is on the up and up. It could be a bid for time, as they prepare for the ultimate exit scam where ultimately they flee with everyone's money.

Regardless, as the Tether controversy reaches critical mass, I feel a resolution to this sordid affair is on the horizon.

I guess it's time to batten the hatches, and brace for impact, because things are about to get ugly.

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