What if I told you…Tether is 100 percent backed…there is the cash sitting in banks,
which amounts to the exact total of USDT issued??
You would say….fook ya Mr. Swope, the B-RUN is back on yo!
And I would have to agree…but Tether isn’t backed in the conventional way people think…there
is definitely some funky business going down.
So are you ready to get funky with your boi Chico yung warriors!?
Then say Aho…because it’s time for Chico Crypto…
Everyone knows about the mystery of the Tether Stablecoin’s backing in the crypto space….but
if you dont…people have been wondering since 2017…
In 2019, John M. Griffin and Amin Shams, two college professors and researchers, shocked
the crypto world with this paper: Is Bitcoin Really Un-Tethered?
From the paper’s abstract we can see they say “This paper investigates whether Tether,
a digital currency pegged to the U.S. dollar, influenced Bitcoin and other cryptocurrency
prices during the 2017 boom.
Using algorithms to analyze blockchain data, we find that purchases with Tether are timed
following market downturns and result in sizable increases in Bitcoin prices.
Rather than demand from cash investors, these patterns are most consistent with the supply-based
hypothesis of unbacked digital money inflating cryptocurrency prices.
Through their deep research, they came to the conclusion that the 2017 boom was manipulated
by unbacked Tether’s…
This has continued to this day…with Bloomberg putting out a punishing article in October
of last year titled “Anyone Seen Tether’s Billions?”...where they once again say that
most likely…Tether isn’t fully backed.
The article states “Exactly how Tether is backed, or if it’s truly backed at all,
has always been a mystery.
For years a persistent group of critics has argued that, despite the company’s assurances,
Tether Holdings doesn’t have enough assets to maintain the 1-to-1 exchange rate, meaning
its coin is essentially a fraud.”
The reason for these hard hitting academic papers and articles from major news outlets?
Tether has never done a full audit…
Tether was going to do an audit in 2018…but the relationship with their auditor Friedman
LLP was dissolved.
From a coindesk article on this, Tether stated this regarding the failed audit.
“"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.
The company remains "committed to the process," the spokesperson for Tether added….
Well 3 years went by and no full audit…but in July of last year, Tether’s general counsel,
Stuart Hoegner said this on a live interview with CNBC regarding a full audit.
Let’s listen in…
Tether’s talking heads said an Audit was months away in July of last year…1 year
and 2 months have gone by and no audit…
I wonder why??
Well Tether will never do an audit…because…they aren’t the ones with the cash in the banks…..it
is other crypto entities, major ones at that…who Tether basically controls, who have the ability
to bank within the United States…
This research comes from Data Finnovation…on twitter, who I highly recommend anyone who
watches this channel follow.
This research is downright amazing…and it sheds a major light on how the crypto space
works…
Last month, Data Finnovation put out this article “USDT, US Banks & More Coincidences”
which I’ve included down in the description, read it for the full details, I highly recommend
it.
The intro to the article says “Perhaps the greatest mystery in the financial markets
today is “what is going on with Tether?”
Well, here we lay out a little corner of the global banking system where a quantity of
real USD seems to match Tether outstanding shockingly well.
There is no question these are real USD.
And there are circumstantial connections — strong ones — to parties close to Tether.”
In the article Data Finnovation is able to get public data from two of crypto’s biggest
US banks…Silvergate and Signature bank.
This info is readily available since they reside within the US.
Data Finnovation is able to break down cash on hand from business deposits, which is mostly
coming from the crypto companies these banks have partnered with…and the cash deposits
these banks have matches Tether USDT balances since 2019 shockingly well.
Q3 2019, the two banks had 2.7 billion cash on hand, while Tether had 4.1 billion Tether
outstanding, q4 2019 3.7 billion cash& 4.1 billion Tether…q1 2020 6 billion cash & 6.2
billion Tether, q2 2020 14 billion cash& 9.2 billion Tether, q3 2020 18.2 billion cash
& 15.1 billion Tether, q4 2020 26.2 billion cash & 21.1 billion Tether.
Q1 2021 41 billion Cash & 40.7 billion Tether, q2 2021 58.4 billion cash & 62.4 billion Tether,
q3 2021 67.7 billion cash & 68 billion Tether, q4 2021 76.4 billion cash & 78.3 billion Tether,
q1 of this year 82.9 billion cash at Silvergate and Signature and 81.4 billion Tether outstanding,
and finally q2 of this year 77.5 billion cash and 66.4 billion Tether.
After comparing quarter by quarter changes, which also match shockingly well, Data Finnovation
says “There is absolutely no reason these numbers should have anything to do with each
other naturally.
Tether is not holding their cash reserves at these banks.”
Or are they?
After analyzing that this cash isn’t USDC’s backing, Data Finnovation says this in the
what’s going on section…”This is not Tether’s cash surely.
At least not directly.
But what is it?
First, this proves enough cash looks to have entered the ecosystem to back Tether.
Absolutely nobody is claiming these US banks are lying about their deposit liabilities
to both the SEC and FDIC.”
Second, it suggests a theory.
Maybe Tether’s commercial paper consists of obligations of whoever owns these USD deposits.
Again there is money here and if one company promises it to another there is a sense in
which that is commercial paper.”
Tether has done attestations, not a full audit of their holdings, where they revealed early
on….that a majority of what was backing Tether was commercial paper & there were many
theories going around that this was Chinese commercial paper…but most likely, it’s
whoever owns these USD deposits at Silvergate and Signature bank.
So who is it?
Well things get even weirder but a bit more clear with DataFinnovatins next article posted
about 2 weeks after the first.
This article is titled “Minor Stablecoins & USDT Issuance: Even More Coincidences”
which I’ve also included down in the description, please give it a read.
In the article he statistically analyzes the flow of minor stablecoins.
Issuance aka minting and redemptions aka burning…and comes to a conclusion.
Under the section what is happening DataFinnovation says “The USD flowing through these minor
stables end up at Silvergate and Signature, somehow, as some kind of (maybe outsourced)
backing for USDT.
They pass through these minor stables as a sort of funnel into the “Tether complex.”
So most of the minor stables are helping back Tether as many of them have connections to
silvergate and signature in one way or another…they are fully a part of the Tether USDT complex…
Now Data Finnovations most recent article puts it all together.This was put out just
last week and is titled “USDT-on-TRON, FTX & WTF Is Really Happening” and once again
I highly recommend reading it…
But the tldr of the article says “FTX/Alameda minted nearly all the USDT-on-TRON and operate
as something like a central bank or reserve manager for a shadow East Asian USD payment
system.
We provide convincing evidence from novel on-chain analysis that shows how a real, albeit
mostly-not-kosher, crypto use case works.
This data also makes plain that Binance/Cumberland runs the Ethereum part of the same ecosystem
and that these two groups of parties probably coordinate their actions in some way.”
So what does this all mean?
It means That it’s very likely Tether is majorly backed by commercial paper from a
variety of crypto companies.
Mostly from FTX and their market maker Alameda, as well as Binance and their market maker
Cumberland…
Do you remember the Protos research paper from November of last year titled “The Tether
Papers”...well this showed a breakdown of who owns all the Tether’s issued.
Number 1 was Alameda, Number 2 was Cumberland, and number 3 was other binance market makers.
So my theory?
Tether’s are issued unbacked to large and powerful crypto entities like Binance and
Cumberland as well as FTX and Alameda.
Tether receives commercial paper in return in hopes that these entities will manipulate
the markets, and make the USD back.
Which they always do as there are many suckers in the crypto industry, leverage trading on
these centralized exchanges and having their money erased in a snap.
These entities are able to bank in the US, which Tether will never be able to do…so
it’s a win-win-win for all parties involved.
Sooo…has Tether issued FTX any commercial paper??
Well actually this question was asked to Sam Bankman Fried himself by a panel setup by
Coindesk, and you can just see the guilt in his eyes…he dodges the question…and just
starts spouting a bunch of nonsense…let’s watch now..
As you can see when asked if commercial paper was issued, he quickly just shakes his head
no, without saying addimnetly that this is 100 percent false…and while his arm is fidgetitnig
pretty intensely…
And then when the interviewer talks about no-one seeing this type of volume of commercial
paper in the markets, Sam is touching his face, and just a licking and a licking away
at his lips with his arms crossed…all signs that a person is possibly not telling the
truth.
I’m not accusing anyone of doing anything illegal, this is just my theory…that Tether
has been issued commercial paper from crypto entities, and FTX just might be one of them.
But if this is the case, regulators will eventually find out…and shut it down.
Cheers viewers I’ll see you next time!!