9 PREFACE
9.1 iFinex led Blockstream's $210 million series B round.
9.2 iFinex invested in Bitrefil's 2021 raise.
9.3 Tether investedS $100 million in Jihan Wu's mining company, Bitdeer.
9.31 Tether invested in Bitcoin mining company Northern Data Group.
9.4 Tether invested $775 million in Rumble.
9.5 Tether and Bitfinex invested 25,812BTC in Jack Maller's Twenty-One.
9.6 Bitfinex invested in USDT-powered blockchain Stable.
9.7 Tether Ventures invested in Synonym.
9.71 Tether Ventures invested in Holepunch.
9.72 Tether invested in Sorted Wallet.
9.8 Tether invested in PlanB Lugano.
9.81 PlanB Lugano's website directs you to planb.network when you click on the Bitcoin Education link.
9.9 Tether recently moved it's headquarters to El Salvador.
9.91 Tether invested in Volcano Energy to build a Bitcoin mining farm in El Salvador.
9.92 They are building a 70-story building there.
10 CRYPTO CAPITAL CORPORATION
10.1 "Hi everyone, Over the past 2 weeks we have witnessed a minor increase in tickets centered around delayed fiat deposits & withdrawals, specifically those executed between 10th January-5th February 2018. We are fully aware of these delays and we are working closely with partners to expedite affected transactions in a timely and supportive manner. We have seen an increase in processed transactions over the past 3 days with the majority of backlogged transactions going through yesterday. We expect for all backlogged fiat transactions to clear within the next 4 business days. We apologise to those affected and we will continue to monitor transactions to ensure smooth processing." -social_bfx on r/bitfinex, 20 February 2018
10.11 The top of thread is full of arguments users accusing each other of being paid to shill for Bitfinex and being paid to fud bitfinex. However, the bottom of the thread is just people posting their ticket numbers and the complaint that they haven't received their funds yet.
10.111 Tether changes its terms of service to say "Beginning on January 1, 2018, Tether Tokens will no longer be issued to U.S. Persons."
10.12 On 3 January 2018 the number of tethers in circulation reached 1.48 billion
10.121 Tether gives a statement to Coindesk that says its relationship with its auditor, Friedmann LLP has been dissolved.
10.122 "We confirm that the relationship with Friedman is dissolved. Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame. As Tether is the first company in the space to undergo this process and pursue this level of transparency, there is no precedent set to guide the process nor any benchmark against which to measure its success." -Tether spokesperson
10.13 31 January 2018 the number of tethers in circulation reaches 2.2 billion
10.131 This is ~50% increase in the number of tethers.
10.14 "Over the course of the past few days, when Bitcoin appeared as if it was almost about to crash but at the last minute recovered, we saw an awful lot of buys that look like this, many of which are suspiciously timed shortly after those $100 million Tether issuances." Tony Acieri, "The Tether Conundrum: A Quick Backstory"
10.141 "I am a former HODLer, present nocoiner, and perpetual Bitcoin bear, so take that for what you will. Well, the nocoiner part is a bit of a lie: I have a JPCoin." -Tony
10.142 Tony previously published "The Death of Bitcoin" (20 May 2015), "The Dangers of Blockchain Monoculture" (5 January 2016), and "A tale of two cryptocurrencies: Ethereum and Bitcoin’s ongoing challenges" (21 June 2016)
10.15 User Buttcoins-R-Us on Reddit says, "1) You buy any crypto coin of your choice on Bitfinex with your US Dollars. No Tether involved here. Bitfinex will sell you crypto coins for cold hard cash any day. 2) When you decide to sell your coins, Bitfinex will offer you something shady called USD-T. It sounds like USD but in fact it's Tether. Here's where you either get stuck holding tethers mistaking them for USD or figure out the scam and take your tethers to another exchange to cash out. 3) But wait there's more. The other exchanges don't cash out tethers directly for USD either. So you have to buy altcoins at those exchanges with your tethers then withdraw the whole thing for cash."
10.16 Bloomberg runs an article revealing that the CFTC subpoenaed Bitfinex and Tether in December, 2017.
10.161 Friedman LLP removes all mention of Bitfinex from their website
10.162 Bitfinexed says Friedman quit because Tether PR guy sent a false press release.
10.163 "The auditor quit because of the Twitter FUD. Self full-filling prophesies." -Brock Pierce on Twitter
10.164 Tether's website on 12 February 2019 "Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD."
10.165 "We routinely receive legal process from law enforcement agents and regulators conducting investigations." -Bitfinex and Tether
10.17 18 February 2018 BitMex Research publishes a blog post on Tether, speculating that Tether is using Noble Bank in Puerto Rico.
10.171 Tether later (in June, 2018) confirms that they are using Noble Bank in Puerto Rico.
10.172 Noble Bank was co-founded by Brock Pierce.
10.173 Noble is the "The Next-Generation Bank Designed For FX & OTC Post-Trade Services"
10.174 Bitfinex announces support for SegWit.
10.18 Noble Bank is not the only bank being used by Tether and Bitfinex.
10.2 In early April 2018, Polish authorities seize more than 400 million euros from accounts at a small bank in Lodz.
10.21 A user on a Polish Bitcoin forum claims this account (Crypto sp z o.o.) is connected to Bitfinex.
10.211 This user also claims "The prosecutor’s office from Łódź came after me over the company Crypto sp. z o.o., because I transferred money from Bitfinex and, through it, the money was paid out to me."
10.22 Back in November of 2017, Bitfinexed claimed "Bitfinex's new Euro bank is under the account name "CRYPTO SP.ZO.O". The Euro Bank is not in the name of Tether, or Bitfinex."
10.221 Bitfinexed posted a screenshot of Bitfinex deposit instructions listing the Crypto Sp. ZO.O account.
10.2211 Bitfinexed gets this by cajoling a Twitter user who is also presumably a Bitfinex customer to post a screenshot of the wiring details.
10.222 Twitter user @Hashdeus says "The 99% owner of Crypto sp z o.o. is CRYPTO CAPITAL CORP. https://cryptocapital.co (Panama)"
10.2221 This public information comes from a Polish site that aggregates public information, but the link is no longer live.
10.22211 But this site seems to confirm the information.
10.22212 Polish media were reporting the connection between Bitfinex and the Crypto SP ZO.O account in late November, 2017.
10.2222 Crypto Capital acquired Crypto SP ZO.O for PLN 4,950.00.
10.223 There is a screenshot of this public information.
10.224 The Crypto Sp ZO.O bank account is connected to a Panamanian Canadian and a Columbian with citizenship in Panama.
10.2241 The Panamanian Canadian individual is Ivan Manuel Molina Lee.
10.2242 Ivan Manuel Molina Lee is also the director of Crypto Capital Corporation.
10.3 Crypto Capital Corporation's website says: "DEPOSIT AND WITHDRAW FIAT FUNDS INSTANTLY TO ANY CRYPTO EXCHANGE AROUND THE WORLD"
10.31 Crypto Capital is first proposed on 3 May 2013 as a "fiat bank for bitcoiners" in a long post by a Reddit user named bitfan2013. The whole post is worth reading.
10.311 Bitfan2013 says the core issue Bitcoiners are facing is "Fiat to Bitcoin and back to Fiat. A real Fiat Bank from scratch should be setup by Bitcoin users, miners, merchants and developers for the purpose of doing business in Bitcoin and exclusively to Virtual Currencies."
10.312 Bitfan2013 also says, "I know that Bitcoiners everywhere believe that the Banks are scared of Bitcoin and are out to crush it; however, nothing could be further from the truth. Bankers are businessmen and run the Bank as a business and as any other business with profits being the goal while providing services for a fee to their customer’s base."
10.313 And "Bitcoin solves many issues on a global scale providing the ability to move “currency” for almost no fees, everywhere in seconds, don’t you think that’s a Bankers wet dream not being tied to the slow moving Swift system where everyone and their mother takes a cut from a simple wire."
10.314 And "I would recommend opening a Bank in one of the few Bank Friendly nations like Panama."
10.315 And "My family and I sit on the board of directors of 4 small – medium sized private banks."
10.3151 Bitfan2013 may be Ivan Manuel Molina Lee, a Panamanian Canadian.
10.316 Bitfan2013 posts an update on 8 May 2013, saying "We have decided to offer Private International banking to Bitcoin Customers, Merchants and Traders"
10.32 On 6 August 2013, a public offering is announced for something called Crypto Financial.
10.321 The public offering is facilitated by Havelock Investments.
10.3211 Havelock Investments was a fund launched in 2012 by BitcoinTalk user lightbox.
10.32111 aka James Grant
10.32112 James first launched a VOIP and web hosting service that accepted bitcoin in 2010.
10.321121 They charged 80BTC/month + 0.50 BTC/minute anywhere in Canada/Continental USA. Details on Lightbox's webpage
10.32113 A year later, in 2011, James launched canadianbitcoins.
10.3212 When Havelock Investments first launched, James' announcement had no comments or replies after three days.](https://bitcointalk.org/index.php?topic=87002.msg962289#msg962289)
10.3213 Havelock Investments launches (relaunches?) a new fund on 1 August 2012
10.322 Havelock Invements announces the public offering of Crypto Financial (CFIG) shares at a price of 0.15BTC/unit with a total of 50,000 units.
10.323 A prospectus for Crypto Financial is published on Havelock's website.
10.3231 The prospectus is written by as MS Office Word 2007 user with the name oz-office.
10.324 A user named Crypto Financial provides some background for the public offering.
10.3241 "Members of this company are currently board members in a Medium size bank in Panama." -Crypto Financial on BitcoinTalk
10.3242 "Our solution is to provide the Exchanges with pre-approved customers that they will not be required to verify. The same way a Stock broker handles and manages their customers account, and the actual trades are performed by a trading platform software provided by a third party; so will we offer our customers the ability to choose their own trading platform provided by the exchanges. As the Exchange companies will only offer software, their liability for reporting and compliance will be void and null." -Crypto Financial on BitcoinTalk
10.3243 "We will offer several exchanges the opportunity to bid for and open an account with our company. Each Exchange platform company will be able to offer their own rates and fees for access to their platform to our customers. This will encourage competition among the different exchanges and offer our customers a choice when choosing an exchange. This will also encourage innovation for the Exchange Platform as the Exchanges will compete and will want to attract our customers by offering the best Trading Platform and Best Rates. The same way the free market dictates the rates offered by different Stock Brokers or Forex agents." -Crypto Financial on BitcoinTalk
10.3244 "We will deal with Fiat currency only, and the exchanges will operate the Crypto Currency portion of the transaction." -Crypto Financial on BitcoinTalk
10.3245 "We will provide services to U.S based customers and comply with FACTA if the customer qualifies for it (over $50K). U.S Citizens should also comply with FBAR" -Crypto Financial on BitcoinTalk
10.325 The Crypto Financial public offering announcement is also posted on Reddit by bitfan2013.
10.3251 Two days later, a Reddit account named CryptoFinancial posts an ad for a graphic designer to create a logo for their new corporation.
10.326 In November 2013, bitfan2013 makes a comment on Reddit saying Havelock Invesments is owned and operated by a Panamanian company.
10.3261 bitfan2013 says the source is "Me, a person involved in the acquisition."
10.3262 James announces on BitcoinTalk that Havelock Investments has been acquired by the Panama Fund.
10.33 On 20 May 2014, Crypto Financial's page on Havelock Investments posts an update using the name Crypto Captial Corp.
10.34 Crypto Capital's website says it is owned and operated by Global Trade Solutions A.G., a licensed financial institution in Zug, Switzerland, the "Crypto Valley".
10.341 Global Trade Solutions was originally called Semacon AG Software Engineering, Management & Consulting, but was renamed in 2016.
10.3411 Semacon AG Software Engineering, Management & Consulting, located in Feusisberg, CHE-109.428.391, a public limited company (SHAB No. 249 of December 21, 2012)
10.3412 Global Trade Solutions purpose is stated as: Operation of a debt collection agency for the collection of own receivables and those of third parties.
10.3413 Dmytro Pichugin is added to the board of directors.
10.3414 As early as 2015, somebody from France created a blog to complain about Crypto Capital and their use of Global Transaction Services LLC, which they claimed was based in Georgia, US.
10.3415 On 28 January 2016, a BitcoinTalk user was complaining about being given a bank account called "Global Transaction Services (HK) Limited" to deposit funds at Crypto Capital.
10.3416 In May of 2016, the owner of a Atlanta, Georgia based company called Global Transaction Services was indicted for failing to establish an effective anti-money laundering program.
10.34161 It is unclear whether the Global Transaction Services referenced in the indictment had any connection with the Global Transaction Services operating in Hong Kong or to Global Trade Solutions AG, the parent company of Crypto Capital, or to Global Trade Solutions LLC, the Colorado company later founded by Reginald Fowler.
10.34162 Decrypt believes they are connected.
10.342 In March of 2017, Ivan Manuel Molina Lee, a Panamanian citizen, becomes the chairman of the board of directors for Global Trade Solutions, AG.
10.3421 Ivo Michael Krämer is also added to the board.
10.343 In April of 2017 Ivan Manuel Molina Lee changes his citizenship on the documents to Canadian.
10.3431 Amit Raz, an Israeli citizen, is added to the board as a director with joint signature by two.
10.3432 Eitan Treger, an Israeli citisen, is also added to the board as a director with joint signature by two.
10.344 In August of 2018, Global Trade Solutions declares as its new purpose: "Provision of services in the areas of asset and investment advisory, financial and organizational planning, management and family office services, handling of all types of administrative work and providing support services in the area of general financial and asset advisory, as well as accepting mandates in these areas, operating a debt collection agency for the collection of own receivables and those of third parties"
10.4 "From early 2017 through late 2018, Bitfinex customers transferred more than $1.5 billion to various bank accounts purportedly held or controlled by Crypto Capital." -Declaration of Giancarlo Devasini in support of application to conduct discovery
10.41 The New York Attorney General claims that Bitfinex began a relationship in 2014 with a (believed to be) Panamanian entity called Crypto Capital Corp. to act as payment processors.
10.411 "As explained to OAG attorneys by Respondents' counsel, no contracts or similar written agreement was ever entered into between Crypto Capital and Bitfinex or Tether." -New York Office of the Attorney General
10.42 "By mid-2018, Crypto Capital held over $1 billion of funds that emanated from customer deposits at Bitfinex."
-Settlement agreement between Bitfinex and Tether and the New York Attorney General
10.43 "In or about March or April 2018, however, we learned from news reports that Crypto Capital funds had been seized by authorities in Poland as part of an investigation into potential money-laundering. At the time, Yosef acknowledged to me that Crypto Capital's Polish bank accounts had been frozen, but claimed that none of iFinex's funds were affected by these actions." -Declaration of Giancarlo Devasini in support of application to conduct discovery
10.431 "Bitfinex can confirm that it is aware of the current allegations that have been reported by Polish media over the past several hours.Bitfinex believes that these allegations are untrue and Bitfinex customers and operations are unaffected by false rumors. Bitfinex is proud to be the world’s leading crypto exchange, and in this capacity works tirelessly to remain in strict compliance with authorities and regulators worldwide." -Bitfinex statement in response to the reports of their connection to the seizure of funds from Polish Crypto SP ZO.O account
10.432 "At some point between April 2018 and July 2018, “Oz” informed Bitfinex that a Crypto Capital account in Portugal containing approximately $150 million of Bitfinex client funds had also been frozen." -Settlement Agreement between New York Office of the Attorney General and Bitfinex-Tether
10.4321 "Crypto Capital's agreement to act as a payment processor was made by one of its principals -- an individual who identified himself to me as Oz "Joseph." -Declaration of Giancarlo Devasini in support of application to conduct discovery
10.43211 "in 2019, I learned that Mr Joseph's last name was actually "Yosef." -Declaration of Giancarlo Devasini in support of application to conduct discovery
10.433 Also in early April, 2018 Crypto Capital is named in a 93-count indictment of Backpage.
10.4331 "According to court documents, the government seized several financial accounts belonging to Backpage owners, including a number of accounts held with Crypto Capital, as well as Global Trading Solutions." -decrypt
10.4332 Global Trading Solutions is not the same name as Global Trade Solutions, however, I couldn't find the court documents referenced by Decrypt.
10.434 "U.S. Launches Criminal Probe into Bitcoin Price Manipulation" -Bloomberg
10.44 "In May 2018, Bitfinex asked “Oz” how Bitfinex could 'move money efficiently out of Cryptocapital.'" -Settlement Agreement between New York Office of the Attorney General and Bitfinex-Tether
10.441 "In communication logs produced to OAG covering the period of April 2018 to early 2019, a senior Bitfinex executive ("Merlin") repeatedly beseeched an individual at Crypto Capital ("Oz") to return Bitfinex's funds." -New York Office of the Attorney General
10.442 Giancarlo Devasini signs himself as "Merlin the wizard" on Skype.
10.5 "Noble Bank International, based in San Juan, Puerto Rico, took over banking duties for Bitfinex last year. As a stopgap between Wells Fargo’s exit and Noble’s entrance, Bitfinex used a string of third-party accounts based in Panama City to stay in the game, according to online documents." -Bloomberg, 24 May 2018
10.51 6 June 2018 The CFTC denies a FOIA request for the supoenaes they reportedly issued to Bitfinex and Tether.
10.511 "Some records are exempt from disclosure under FOIA Exemption 7(A), 5 U.S.C. § 552(b)(7)(A), because disclosure of that material could reasonably be expected to interfere with the conduct of the Commission’s law enforcement activities." -CFTC letter denying the FOIA request
10.512 "Some records were obtained on the condition that the agency keep the source of the information confidential. Those records are exempt from disclosure under FOIA Exemption 7(0), 5 U.S.C. § 552(b)(7)(D). That exemption is intended to ensure that “confidential sources are not lost because of retaliation against the sources for past disclosures or because of the sources’ fear of future disclosures." -CFTC letter denying the FOIA request
10.513 6 June 2018 the number of tethers in circulation reaches 2.5 billion
10.52 Tether publishes an attorney-client communication from the law firm Freeh, Sporkin, & Sullivan in which the lawyers say "FSS is confident that Tether’s unencumbered assets exceed the balance of fully-backed USD Tethers in circulation as of June 1st, 2018."
10.521 Louis Freeh is the former director of the FBI.
10.522 "John Betts, founder and CEO of Noble Bank, and Brock Pierce were both part of Sunlot Holdings in 2014, which unsuccessfully offered to take over the assets of Mt. Gox and revive the bankrupt exchange. Louis Freeh, co-founder of Freeh Sporkin & Sullivan, had an advisory role for Sunlot Holdings in 2014." diar
10.523 Eugene R Sullivan is on the board of advisors for Noble Bank.
10.53 22 June 2018 Phil Potter steps down as Chief Strategy Officer at Bitfinex
10.531 "As Bitfinex pivots away from the U.S., I felt that, as a U.S. person, it was time for me to rethink my position as a member of the executive team." -Philip Potter
10.54 On 25 June 2018 researchers publish a paper called "Is Bitcoin Really Un-Tethered"
10.541 "We find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. The flow is attributable to one entity, clusters below round prices, induces asymmetric autocorrelations in Bitcoin, and suggests insufficient Tether reserves before month-ends. Rather than demand from cash investors, these patterns are most consistent with the supply-based hypothesis of unbacked digital money inflating cryptocurrency prices." Is Bitcoin Really Un-Tethered
10.55 26 June 2018 Toney Acieri publishes "The Tether Conundrum Part 2: The Plot Thickens"
10.56 "I am aware of the delayed and rejected deposits from the past couple weeks; from what I understand, some of our banking relations were changed and that led to the present situation." -Bitfinex representative on r/Bitfinex
10.57 4 July 2018 the number of tethers in circulation reaches 2.7 billion
10.58 In July 2018, Bitfinex told “Oz,” that over eighty percent of Bitfinex’s client deposits were held at bank accounts controlled by Crypto Capital.
10.581 "By July 2018, the amount Crypto Capital held and owed to iFinex exceeded $1 billion." -Declaration of Giancarlo Devasini in support of application to conduct discovery
10.59 "Hey Oz, sorry to bother you every day. is there any way to move at least 100M to either [redacted]? We are seeing massive withdrawals and we are not able to face them anymore unless we can transfer some money out of Cryptocapital" -Giancarlo "Merlin" Devasini on 15 August 2018
10.591 "I understand some of the funds are being held by [redacted], but what about the rest?" -Giancarlo "Merlin" Devasini on 15 August 2018
10.592 Bitfinexed claims Tether created 220M new tethers in the past 4 days.
10.593 Bitfinexed claims Tether is buying to reinflate cyptocurrency prices.
10.594 "Under normal circumstances I wouldn't bother you ( I never did so far) but this is a quite special situation and I need your help. thanks" -Giancarlo "Merlin" Devasini on 15 August 2018
10.5941 "As I have recently been contacted by many of you with regards to delays in fiat deposits and withdrawals for your Bitfinex accounts, we have decided to open a separate thread so that we can keep all similar matters in one place." -garbis_bitfinex on Reddit
10.5942 "An individual at Crypto Capital told the senior Bitfinex executive the reason that funds totaling $851 million could not be returned to Bitfinex was because the funds were seized by governmental authorities in Portugal, Poland, and the United States." Office of the Attorney General of New York
10.595 "We strongly recommend for you to stay up to date with the latest operating systems and browsers to get the most out of your trading experience using Bitfinex." -Bitfinex Twitter account
10.596 Reports that Noble Bank is up for sale.
10.597 3 October 2018 the number of tethers in circulation reaches 2.8 billion
10.6 "Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this. As one of only a very few exchanges operating since 2013, with a small team and low operating costs, we do not entirely understand the arguments that purport to show us to be insolvent without providing any explanation about why. The wallets below represent a small fraction of Bitfinex cryptocurrency holdings and do not take into account fiat holdings of any kind."
-Bitfinex on 7 October 2018
10.64 On 6 October 2018, Twitter user @lawmaster (aka Larry Cermak) posts a screenshot of Bitfinex deposit instructions showing an HSBC account under the name of Global Trading Solutions, LLC (based in Chandler, Arizona).
10.641 Note that this Global Trading Solutions, LLC is based in Chandler, Arizona but may not be the same as the Global Trading Solutions in 10.4331.
10.642 The Block runs an article saying Bitfinex is now banking at HSBC.
10.65 "Both fiat and cryptocurrency withdrawals are functioning as normal. Verified Bitfinex users can freely withdraw Euros, Japanese Yen, Pounds Sterling and U.S. Dollars." -Bitfinex on 7 October 2018
10.651 Bitfinexed posts a screenshot of a Reddit post that claims to describe how banking works for Bitfinex: "The way it works is Crypto Capital Corp creates or buys a company somewhere in Europe that acts as a payment processor for them. They open bank accounts in this company name, register for a money transmitting licence and use the bank accounts as much as they can. When the bank accounts are frozen by the bank or the authorities, they switch to another company/bank account and start over."
10.66 "Today we are pleased to present our users with a new suite of reports designed to enhance user control and understanding when it comes to their trading." -Bitfinex blog on 9 October 2018
10.661 11 October 2018, Bitfinex temporarily pauses all deposits.
https://x.com/lawmaster/status/1050334732142161925
10.6611 13 October 2018 "If you cannot send our fiat money to a Bank account why can't you simply just return it to the customers Bitfinex account and allow them to withdraw it in Crypto instead?" -Reddit user @grahamsnoplus1 on r/bitfinex
10.67 "I have been telling you since a while...too many withdrawals waiting for a long time...is there any way we can get money from you? Tether or any other form?" -Giancarlo "Merlin" Devasini on 15 October 2018
10.671 On October 15 2018, Bitfinex publishes a statement saying "All cryptocurrency and fiat withdrawals are, and have been, processing as usual without the slightest interference"
10.6711 "Apart with cryptocapital we are running low in cash reserves...please help." -Giancarlo "Merlin" Devasini on 15 October 2018
10.6712 "I know. We are following the banks we post as many as we can and let them process as much as possible according to them. Everytime we push them they push back with account closure without reason" -CCC on 15 October 2018
10.672 "Dozens of people are now waiting for a withdrawal out of cryptocapital" -Giancarlo "Merlin" Devasini on 15 October 2018
10.6721 Tether breaks its peg, trading as low as $0.85 on Kraken.
10.6722 Tether "traded at $0.51 per USD Coin (USDC) on Poloniex. $2 million dollars cleared on Poloniex’s USDT/USDC trading pair that day." -Protos
10.6722 "I need to provide customers with precise answers at this point. can't just kick the can a little more the international I mean." -Giancarlo "Merlin" Devasini on 15 October 2018
10.6723 "I will keep you posted here. On the process of all international payments." -CCC on 15 October 2018
10.673 "Please understand all this could be extremely dangerous for everybody. the entire crypto community." -Giancarlo "Merlin" Devasini on 15 October 2018
10.6731 "BTC could tank to below 1k if we don't act quickly." -Giancarlo "Merlin" Devasini on 15 October 2018
10.68 "Today we are introducing a new, improved and increasingly resilient fiat depositing system for sending fiat currencies to Bitfinex." -Bitfinex blog
10.681 "Bitfinex and Tether have also used a number of other third party "payment processors" to handle client withdrawal requests. Including various companies owned by Bitfinex/Tether executives. as well as other "friends" of Bitfinex - meaning. human being friends of Bitfinex employees that were willing to use their bank accounts to transfer money to Bitfinex clients who had requested withdrawals." Office of the Attorney General of New York
10.7 "We believe this system to be significantly more durable in the face of sustained attacks by our competition and their supporters." -Bitfinex blog
10.71 "Ongoing campaigns against us will only result in our company becoming stronger and better." -Bitfinex blog
10.72 Binance temporarily pauses all Tether withdrawals.
10.73 The price of USDT falls to an 18-month low at $0.925284, the lowest level since April 27, 2017 – and was last seen trading at $0.967296, representing a 2 percent drop on a 24-hour basis, according to CoinMarketCap.
10.74 "We would like to reiterate that although markets have shown temporary fluctuations in price, all USDT in circulation are sufficiently backed by U.S. dollars (USD) and that assets have always exceeded liabilities." -Tether statement as reported by CoinDesk
10.741 "Beginning in or about August 2018 and continuing through in or about November 2018, Bitfinex entered into a series of transactions whereby tethers issued by Tether to Bitfinex were purchased through account transfers between Bitfinex and Tether’s accounts at Crypto Capital." -Stuart Hoegner
10.742 "Additionally, customer requests to purchase, sell, or redeem for cash value U.S. Dollar tether continued unabated." -Stuart Hoegner
10.75 "Oz I need urgently some funds." -Giancarlo "Merlin" Devasini on 17 October 2018
10.751 "Either Tethers or USD. we need at least 100M within the next week." -Giancarlo "Merlin" Devasini on 17 October 2018
10.752 "The situation looks bad. we have more than 500 withdrawals pending and they keep coming in." -Giancarlo "Merlin" Devasini on 17 October 2018
10.76 A post on r/bitfinex asks "Where is my 1.28 million USD?" -Someone who trades "$100m per month on Bitfinex"
10.761 "We can not get a response from Bitfinex on these issues from account managers so are posting here on Reddit." -Someone who trades "$100m per month on Bitfinex"
10.7612 "If the withdrawals have not actually been processed yet please just credit the funds back to our account and we will withdraw Tether and sell it OTC for a loss. We would prefer that than to wait indefinitely for the funds to hit." -Someone who trades "$100m per month on Bitfinex"
10.77 "Sorry to be pushy but can you try sending something already today. We have about 400 small wires pending. the total amount is only 5M but we have to send them out quickly." -Giancarlo "Merlin" Devasini on 18 October 2018
10.771 "People are enraged." -Giancarlo "Merlin" Devasini on 18 October 2018
10.772 "This banking information is being provided to you for the purposes of contributing good faith funding to your account on Bitfinex. At all times, you are subject to our Terms of Service. This banking information is commercially sensitive and confidential. You should be very careful with this information. You are asked to keep this information to yourself and not to share it except with your financial institution. Divulging this information could damage not just yourself and Bitfinex, but the entire digital token ecosystem. Accordingly, you are cautioned that there may be serious negative effects associated with this information becoming public. Pursuant to the Terms of Service, Bitfinex is not liable for or responsible for the actions of third parties." -Bitfinex deposit instructions as of 18 October 2018
10.773 "Today we are happy to announce the release of the Honey Framework, beginning with an Algorithmic Order Library for creating custom, complex order types on Bitfinex." -Bitfinex Twitter account on 18 October 2018
10.774 "Too much money is trapped with you and we are currently walking on a very thin crust of ice." -Giancarlo "Merlin" Devasini on 18 October 2018
10.775 The Block runs an article saying that Tether has begun a banking relationship with Deltec Bank in the Bahamas.
10.78 Bitfinex releases a new app.
10.79 31 October 2018 the number of tethers in circulation drops to 1.75 billion
10.791 Tether announces on Twitter that they are banking with Deltec Bank.
10.792 And, on their blog, they include an attestation of their balances.
10.793 "The next day, November 2, 2018, Tether made the first of five transfers ultimately totaling $475 million from its bank account at Deltec Bank to Bitfinex’s account at Deltec Bank. At the same time, a corresponding transfer was made from Bitfinex’s account at Crypto Capital to Tether’s account at Crypto Capital via ledger entry Bitfinex also “purchased” 150 million tethers by transferring $150 million in funds held at Bitfinex’s Crypto Capital account to Tether’s account at Crypto Capital. These transfers were not disclosed."
-Office of the Attorney General of New York
10.794 On November 5, 2018, as an executive of Tether Mr Devasini lent 900 million dollars to Bitfinex and as an executive of Bitfinex, Mr Devasini signed the receipt to Tether.
10.795 Bitfinex will eventually announce the full repayment of this loan on 6 February 2021.
10.8 I hope you will be able to send something pretty soon. the situation is not looking good -Giancarlo "Merlin" Devasini on 15 November 2018
10.81 Crypto Capital support page suggests "When sending a transfer between your Crypto Capital account a your own account at an external financial institution please use the following narrative: "Treasury transfer back to my own account."
10.82 "We are pushing everyday. the previous KNF from Poland just resigned over scandal of shaking down banks...So it's very good for us to get funds release asap" -CCC on 15 November 2018
10.821 Bitfinex announces support for the Bitcoin Cash hard fork.
10.83 "Any realistic estimate about Poland?" -Giancarlo "Merlin" Devasini on 15 November 2018
10.84 "It was july when you told me for the first time it was to be expected any time" -Giancarlo "Merlin" Devasini on 15 November 2018
10.85 "Please update me about the situation. we have serious problems if we don't get some funds from you within this week." -Giancarlo "Merlin" Devasini on 21 November 2018
10.851 On November 21, 2018 counsel for Bitfinex and Tether, and attorneys for New York Office of the Attorney General discussed the investigation.
10.852 &emps; "During November 2018, Tether transferred $625 million held in its account at Deltec to Bitfinex's account at Deltec. Bitfinex. in turn, caused a total of $625 million to be transferred from Bitfinex's account at Crypto Capital to Tether's account at Crypto Capital. through a ledger entry at Crypto Capital crediting Tether's account in the amount of $625 million and debiting Bittinex s account by a corresponding amount. The purpose of this exchange was to allow Bittinex to address liquidity issues unrelated to tethers." -Jason Weinstein on behalf of Bitfinex and Tether
18.852 "Now, that’s an awkward thing to do." -Matt Levine
10.86 "I wish we had some clarity. it's always very difficult to tell our customers something real and this fuels the uncertainty."
-Giancarlo "Merlin" Devasini on 27 November 2018
10.87 "We are at the end of the month and you haven't been sending out one wire, even 1 usd for the whole month" -Giancarlo "Merlin" Devasini on 28 November 2018
10.871 "I think you should stop playing and tell me the truth about what is going on" -Giancarlo "Merlin" Devasini on 28 November 2018
10.872 "I am not your enemy. I am here to help you and have been very patient so far. but you need to cut the crap and tell me what is going on" -Giancarlo "Merlin" Devasini on 28 November 2018
10.873 "On November 29, 2018, Yosef provided documentation, prepared by Crypto Capital, showing that it held more than $306 million of Bitfinex funds in a "TCA Bank," which Yosef later explained was TCA Investment Bancorp & Trust Company." -Giancarlo Devasini
10.9 "At no time did Crypto Capital or Yosef disclose any relationship between it and Spiral Global Development Limited or its sole director and shareholder, Reginald Dennis Fowler." -Declaration of Giancarlo Devasini in support of application to conduct discovery
10.91 "Indeed, until December 2018, Crypto Capital never disclosed that several of the bank accounts to which Bitfinex's customers transferred fiat funds were actually held and controlled by Spiral and Fowler, and not by Crypto Capital or any of its related entities." -Giancarlo Devasini
11 REGINALD FOWLER AND RAVID "OZ" YOSEF
11.1 Spiral Global Development Limited was incorporated in May 2018 by Reginald Fowler.
11.11 Reginald Folwer was part of a group that bought the Minnesota Vikings in 2003.
11.111 "Fowler made his fortune, which The Arizona Republic reported at upward of $400 million, running Spiral Inc. (No. 11 on the BE INDUSTRIAL/SERVICE 100 list with $314 million in sales). The Chandler, Arizona, firm sells supplies to grocery store chains and also has dealings in real estate and aviation." Black Enterprise Magazine
11.12 "Fowler invested nearly $25 million in the AAF during its inaugural season." -Sports Illustrated
11.121 &emps; "But withdrawals from his domestic and foreign accounts were reportedly "held up around Christmas," freezing a key source of the league's funding." -Sports Illustrated
11.122 “Thus, when Fowler represented his net worth by relying on those accounts, he was lying about both the source of those funds (they were not from real estate or drone businesses) as well as the ownership of those funds (they belonged to GTS and, more generally, were necessary to redeem GTS/Crypto Capital clients who sold their cryptocurrency, not money Fowler could use),” -US prosecutors cited in a Blockworks article
11.2 Global Trading Solutions LLC was also established by Reginald Fowler in Colorado.
11.21 In May 2018, Reginald Fowler files G.T.S. Resources Limited in the UK
11.211 "On December 13, 2018, Yosef provided us with a "Reference Letter" from TCA Bancorp dated December 6, 2018. In it, TCA Bancorp states that the letter is provided at its customer's request. It represents that an account ending in -1401 has an "Available Balance" of $304,000,000. The letter, however, identifies TCA Bancorp's customer as "G.T.S Resources Limited" and not Crypto Capital or any other entity related to Crypto Capital of which we were aware." -Giancarlo Devasini
11.2111 "This letter is provided at our customer's request to inform the following: Name of Customer: G.T.S. RESOURCES LIMITED Account: XXXXX1401 Available Balance: $304,000,000 We can confirm that this relationship is maintain in a satisfactory manner. -TCA Bancorp Investment & Trust, Re: Reference Letter, 6 December 2018
11.212 "Indeed, until Applicant received the Reference Letter, we were unaware of "G.T.S. Resources Limited" or its relationship with Crypto Capital. -Giancarlo Devasini
11.213 On December 17, 2018, Reginald Fowler changed the name of the entity to Spiral Global Development Limited. -Giancarlo Devasini
11.22 "Between in or about June 2018 and in or about July 2018, Defendant sent approximately $60 million from scheme accounts to his personal bank accounts. Beyond the fact of allegedly operating an illegal shadow bank, Defendant appears to have comingled client deposits in his own accounts." -Elizabeth Strange, First Assistant U.S. Attorney
11.221 There are accusations that the "scheme accounts" held funds belonging to Bitfinex and Tether customers.
11.3 In August 2018, Reggie opened a bank account in under Global Trading Solutions at an HSBC bank in New York.
11.31 Fowler provided information to HSBC indicating that Global Trading Solutions was a real estate development and investment business that collected rental income and sold properties.
11.32 On or about 23 October 2018, the government seizes the funds in a number of HSBC accounts in the name of Reginald Fowler and Global Trading Solutions, LLC.
11.33 The government seizes further funds from HSBC accounts in the name of Reginald Fowler and Global Trading Solutions, LLC on 16 November 2018.
11.34 "On or about October 24, 2018, Defendant spoke with FBI agents regarding this seizure. During that conversation, Defendant expressed his desire to cooperate and his willingness to keep the investigation confidential. The following day, the agents sent him a follow-up email. Rather than keep this email confidential, Defendant forwarded it to another scheme member." -Elizabeth Strange, First Assistant U.S. Attorney
11.35 Reginald Fowler has a “Master US Workbook” that indicates Crypto Capital and Global Transaction Solutions had received over $740 million in 2018.
11.351 The "Master US Workbook" lists sixty different bank accounts "held at both domestic and international banks, with a combined account balance of over $345 million as of January 2019" -Elizabeth Strange, First Assistant U.S. Attorney
11.4 On 9 December 2018, Gerald "Gerry" Cotton, CEO of QuadrigaCX exchange, dies from complications of Crohn's disease while building an orphanage in India on his honeymoon.
11.41 "Gerry took sole responsibility for the handling the funds and coins and the banking and accounting side of the business. Gerry moved the majority of the coins to cold storage." -Jennifer Robertson, Gerald Cotten's widow
11.411 "The laptop computer from which Gerry carried out the Companies' business is encrypted and I do not know the password or recovery key. Despite repeated and diligent searches, I have not been able to find them written down anywhere." -Jennifer Robertson, Gerald Cotten's widow
11.42 Quadriga was also experiencing banking delays throughout 2018.
11.43 Quadriga also relied on Crypto Capital Corporation for payment processing.
11.5 "Authorities investigating GTS [Global Trade Solutions AG] and related entities have effectively frozen bank accounts and disabled traditional banking services as it relates to crypto currency and exchange services; in many instances ex parte without a warrant or court order. Indeed, authorities have exceeded the boundaries of simply freezing crypto currency related bank accounts, and extended their reach into personal and unrelated business accounts, merely through association, all of which has created enormous financial pressure on GTS." -Ivan Manuel Molina Lee, Re: Regulatory/Banking Issues, 19 December 2018
11.51 "Just recently, three separate Account Freezing Orders were placed on bank accounts at HSBC -London by the criminal courts in London, UK based simply on alleged AML issues involving unrelated crypto currency account activities by GTS in other locations. Similar orders in the United States, Portugal and other international locations have resulted in bank accounts being frozen and blocked without warning or explanation, banking services terminated, and access to bank accounts denied." -Ivan Manuel Molina Lee, Re: Regulatory/Banking Issues, 19 December 2018
11.52 "We have been advised by counsel that due to the on going investigations against GTS AG related entities and its financial activities with third parties we are not to share any details about the company and its banking operations until amicable resolutions is in place." -Ivan Manuel Molina Lee, Re: Regulatory/Banking Issues, 19 December 2018
11.53 "A few of the many Articles publishing private account information of GTS AG and related entities causing unsolicited funds to be sent to the accounts and exposing GTS AG Accounts to fraud and leading authorities/regulators to freeze or close the accounts:"
Ivan Manuel Molina Lee lists the Block article from October 6 as one of the reasons their accounts have been frozen. -Ivan Manuel Molina Lee, Re: Regulatory/Banking Issues, 19 December 2018
11.6 "In or about late December 2018. the Companies and their counsel developed concems about the availability of some of the funds at Crypto Capital. totaling over $850 million. While Crypto Capital's principals have represented that the unavailable funds have been seized or otherwise restrained by governmental authorities in Poland. Portugal. and the United States. the Companies grew concerned that Crypto Capital s principals may be engaged in a fraud." -Jason Weinstein on behalf of Bitfinex and Tether
11.61 "Bitfinex immediately undertook negotiations with Tether on an agreement under which Tether extended a secured, revolving line of credit of up to $900 million on commercially reasonable tenns (including a term of three years and an interest rate of 6.5% in outstanding loans under the facility). documented in a loan facility negotiated between the two companies at arm's length with the benefit of separate counsel and approved as required by each company's corporate governance processes. Under this transaction, the line of credit is secured by a share charge over 60.000,000 iFinex Inc. shares owned by DigFinex. which DigFinex agreed not to otherwise encumber." -Jason Weinstein on behalf of Bitfinex and Tether
11.62 "It was for the protection of the virtual currency market that, when in December 2018, senior executives of Bitfinex grew concerned that Crypto Capital might fail to return funds held there, the Companies began to proactively negotiate a credit facility through which Tether would extend Bitfinex a secured, revolving line of credit of up to $900 million." -Stuart Hoegner
11.621 Giancarlo Devasini signed both sides of the agreement for this line of credit.
11.622 "That transaction closed on or about March 19. 20I9. The total accessed under the loan facility as of today's date is equal to $700 million." -Jason Weinstein on behalf of Bitfinex and Tether
11.623 Tether's website on 19 March 2019 "Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD."
11.7 "Bitfinex are pleased to announce that 27.66270285 BTC that were unlawfully taken in the August 2016 security breach have been received by Bitfinex from the U.S. government as the result of U.S. law enforcement efforts." -Bitfinex blog
11.71 3 April 2019 the number of tethers in circulation increases to 2 billion
11.711 On 11 April 2019 Bitfinex enables margin trading.
11.712 On 17 April 2019 USDT launches on the TRON blockchain.
11.72 On April 25 2019, the US Department of Justice announces an indictment of Reginald Fowler and Ravid Yosef.
11.721 The indictment does not have much information about Ravid Yosef.
11.73 This Decrypt article claims that Ravid Yosef is Oz Yosef's sister.
11.731 Oz Yosef appears in a promotional video for Dell.
11.732 A Decrypt article claims Oz Yosef was "the director of a Panama shell company OZ49 Corporation." Decrypt further claims: "Also on the board of directors of that corporation? Crypto Capital’s director, Ivan Manuel Molina Lee."
11.7321 Unfortunately, the records have been updated and no longer show either name on the board of Oz49 Corporation.
11.74 A UK filing for a company named Finnovative Holdings Limited lists Ravid Yosef as a board member.
11.741 It also lists Amit Raz and Eitan Tregar as boardmembers.
11.742 Both of whom are board members for Global Trade Solutions AG, the parent company of Crypto Capital Corporation.
11.743 Ravid Yosef is later traced through her Google reviews, but has not yet been apprehended (but it seems like she's in Jerusalem.
11.744 Neither has Oz Yosef been apprehended.
11.8 Also on 25 April 2019, the New York Attorney General sues Tether and Bitfinex parent company, iFinex.
11.81 The NY attorney general claims Bitfinex "no longer has access to over $850 million dollars of co-mingled client and corporate funds that it handed over, without any written contract or assurance, to a Panamanian entity called “Crypto Capital Corp."
11.82 Bitfinex issues a response to the NY attorney general's suit.
11.821 Bitfinex claims it was "without notice or a hearing" and "an attempt to compel Bitfinex and Tether to provide certain documents and seeking certain injunctive relief."
11.822 Bitfinex also claims: "The New York Attorney General’s court filings were written in bad faith and are riddled with false assertions, including as to a purported $850 million “loss” at Crypto Capital. On the contrary, we have been informed that these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded. We are and have been actively working to exercise our rights and remedies and get those funds released."
11.9 On 30 April 2019, Reggie Fowler is arrested.
11.91 $14,000 in counterfeit US currency is found in Fowler's office.
11.911 The counterfeit currency consisted of sheets of $100 bills that were found in a filing cabinet in an office.
11.92 Reginald Fowler initial pleads not-guilty, but changes his plea to guilty in February 2020.
12 IVAN MANUEL MOLINA LEE
12.1 On March 31 2019, Ivan Manuel Molina Lee is arrested on Greek territory.
12.11 News of this isn't released until he is transferred to Poland on 25 October 2019.
12.111 The Panamanian government issues a warning about Ivan Manuel Molina Lee.
12.12 On 6 June 2024, Ivan Manuel Molina Lee is sentenced to six years of imprisonment by the District Court in Warsaw, XVIII Criminal Division.
12.121 The court determined that he "operated within an organized group engaged in concealing the criminal origin of large sums of money, laundered funds by transferring them through Polish and foreign companies, including entities connected to "Crypto Capital," and signed and used documents containing false information in order to justify the circulation of these funds in legal transactions." -Copy of judgment in Case XVIII K 234/24
12.122 "The Court did not find the accused’s explanations credible, as they were contradicted by the remaining body of evidence." -Copy of judgment in Case XVIII K 234/24
12.12 This article by Cas Piancey includes the only picture I've seen that claims to be Ivan Manuel Molina Lee.
12.13 On 1 March 2019. Global Trade Solutions AG filed a new purpose: "Provision of services in the areas of asset and investment advisory, financial and organizational planning, management and family office services, handling of all types of administrative work, and providing support services in the area of general financial and asset advisory, as well as accepting mandates in these areas; full purpose description according to the articles of association."
12.131 Ivan Manuel Molina Lee may have moved to Zug, Switzerland on 31 October 2018.
12.2 Bitfinex announces the sale of a new token called LEO
12.21 1 May 2019 the number of tethers in circulation is back to 2.8 billion
12.22 "LEO is created with the iFinex and crypto community at heart and in mind." -LEO Whitepaper
12.221 Under the heading "LEO Tokenomics," Bitfinex says "iFinex and its subsidiaries will use an amount equal to 95% of the recovered net funds from Crypto Capital (described above) to redeem and burn a corresponding amount of outstanding LEO tokens. Net recoveries will be calculated by iFinex in good faith and will be net of legal costs, operational and recovery costs, governmental charges, and reserves for contingent costs.
12.23 A few days earlier, on 7 May 2019, Bitfinex was pleased to announce Peter Warrack joining their team as Chief Compliance Officer.
12.24 LEO is a "A special purpose subsidiary of iFinex intends to sell up to USDt 1 billion worth of LEO tokens." -LEO Whitepaper
12.241 The LEO whitepaper says that Bitfinex's motto is Unus Sed Leo.
12.2411 It "is a Latin citation from Aesop’s fable, “The Sow and the Lioness.” The fable (in short) details how a sow brags about how many children she has and then asks the lioness if she only had one child. The lioness replies “One, but a lion.”" -LEO Whitepaper
12.242 "Ideally, digital assets developed and introduced by iFinex, including the LEO token, will be among the first digital assets launched on the Lighting Network." -LEO Whitepaper
12.243 In a section titled "A history of doing right by our customers" Bitfinex says "By the end of 2018, Bitfinex grew concerned that Crypto Capital might fail to return funds held there, and began negotiating a credit facility for a secured, revolving line of credit on commercially-reasonable terms."
12.244 The whitepaper does not say that the credit facility was arranged with Tether.
12.25 Bitfinex also says "iFinex and its subsidiaries will use an amount equal to at least 80% of the recovered net funds from the Bitfinex hack (described above) to repurchase and burn outstanding LEO tokens."
12.3 On 22 May 2019, a judge grants "an immediate stay of the document demands, requiring the companies to produce only documents and information relevant to the limited issue of whether there is personal jurisdiction over the companies in New York but staying the document order in all other respects."
12.31 This comes after a flurry of motions back and forth between Bitfinex and the New York attorney general.
12.4 29 May 2019 the number of tethers in circulation reaches 3.1 billion
12.5 On 21 July Stuart Hoegner files an affidavit stating: "on July 1, 2019, Bitfinex repaid $100 million of the outstanding loan facility to Tether, together with all interest accrued on the loan facility up to June 30, 2019"
12.51 Bitfinex's lawyers continue to cliam claim "This court lacks personal jurisdiction over Bitfinex and Tether."
12.52 Bitfinex's lawyers also claim "This court lacks "Subject matter jurisdiction under the Martin Act."
12.6 Eventually, in February 2021, Bitfinex and Tether agree to pay the State of New York $18.5 million in penalties in a settlement.
12.61 Bitfinex and Tether also agree to cease operations in New York.
12.7 24 July 2019 the number of tethers in circulation reaches 4 billion
12.8 On 3 December 2019 Bitfinex becomes the first exchange to support lightning.
ChatGPT summary
In summary: