Would you believe me if I told you crypto was controlled by an insider cartel, who manipulate
the markets through retail panic, trading against users, oracle mispricings, and more?
And this cartel includes some of the biggest names in the crypto industry?
You would say…DANG Chico why you so crazy??
Well let’s see who the crazy one is after this video.
Because it’s time for Chico Crypto.
Now, if I’m going to talk about the cartel who controls crypto.
I have to begin this episode off with Tether USDT.
Tether is the blood of the crypto markets.
If you look at the top 10 crypto exchanges ranked on Coingecko, they almost all look
the same.
Binance with over 16 billion in 24 hour volume, its breakdown by volume is ruled by Tether…basically
75 percent of that 16 billion, is done in USDT.
They even have their own stablecoin, BUSD, yet…Tether rules.
Kucoin with over 2.2 billion in 24 hour volume, over 95 percent Tether.
Huobi with over 2 billion, is nearly 95 percent too.
OK-X with over 1.8 billion, is over 96 percent Tether.
Bitget with just under 1 billion, is over 98 percent Tether.
Crypto.com with over 730 million is nearly 92 percent Tether.
Like I said…Tether is the blood of the crypto markets, and it’s a big driver of the Bitcoin
price.
Long hash has a great chart that shows this, through USDT circulation and the Bitcoin price.
Looking over 1 year, you can see…whenever Tether “prints” aka the circulation increases,
the Bitcoin price usually goes up.
Whenever Tether printing stops or it slows down, the Bitcoin price falls and when redemptions
happen aka circulation decreases, the Bitcoin price goes down hard.
Like what happened recently.
Sooo, who runs Tether?
Well Tether is currently owned by iFinex…who also owns the crypto exchange Bitfinex.
Going to Tether’s website, we can see their corporate structure.
Jean Louis Van Der Velde is their CEO, Giancarlo Devansini is the CFO, Stuart Hoegner is their
General Counsel, Paulo Ardonio is their CTO, Leonardo Real is their compliance officer,
and Claudia Lagorio is their COO.
Now, everyone in this group has been Public, on the scenes.
Paulo and Stuart have given interviews, for example on CNBC.
Leonardo has given keynote speeches at crypto conferences.
And Claudia is Paulo’s wife…
The only two…who are mysteries are the HeFe’s, the cartel leaders.
Giancarlo and Van Der Velde.This Bloomberg article on Tether titled “Anyone Seen Tether’s
Billions” shows this very well.
They say “The chief executive officer listed on Tether’s website, J.L. Van der Velde,
is a Dutchman who lives in Hong Kong and seems never to have given an interview or spoken
at a conference.
The chief financial officer is Giancarlo Devasini, a former plastic surgeon from Italy who was
once described on Tether’s website as the founder of a successful electronics business.
The only reference to him that turned up in a search of Italian newspapers showed he was
once fined for selling counterfeit Microsoft software.
He didn’t respond to emails or messages on Telegram, where he goes by Merlinthewizard.
Tether’s lawyer, Stuart Hoegner, told me by phone that Van der Velde and Devasini prefer
to avoid the limelight.
Just like Drug Cartel leaders, like to shy away from the limelight, Tether’s leaders
do the same.
Men of mystery….although Giancarlo has been caught out in public a few times.
Here he is at a Salvadorian crypto event with Samson Mow, and his fiance Valentina Picozzi
an Italian Artist, and here is a picture of Giancarlo with his Fiance once again.
Now let’s just check out a couple of her art pieces.
First is a person with a sheephead holding a sign that says “we are all satoshi”.
Next a person holding a sign with a sheephead that reads “in crypto we trust”.
Is she calling bitcoin and crypto believers sheep?
Well check out this last one.
Some Bitcoin logos at the bottom, and then it reads “sorry you’re fucked” and then
“sorry we’re not federal and have no reserve”...
Now everyone knows about the mystery of if Tether is fully backed…as they have never
completed an outside audit in their history.
Is this just them rubbing it in our faces??
Well let’s get deeper into the crypto cartel.
Beginning with those that hodl the most…here is a breakdown of entities who hold the most
Tether’s.
As we can see, 3 entities make up nearly 75 percent of all Tether’s issued.
That is Alameda Research, Cumberland, and Binance market makers.
Let’s begin with Alameda research.
From this Trustnodes article “Alameda Research Reveals Tether Records” we can see that
it was founded by Sam Bankman Fried…and they defend Tether on a big scale.
From the article it says ““I’ve been minting/redeeming USDT on an institutional
scale for over 3 years with multiple desks!” – said Ryan Salame, Head of OTC at Alameda
Research, before adding: “While admittedly I’ve done far more mints than redemptions,
below you’ll find all USDT redeemed in my current role.
Note the process has always been smooth.”
Now why would Alameda be defending Tether?
Talking about how easy it is to redeem?
Well #1 they are part of the insiders who can redeem Tether.
From Tether’s terms of service it says “In order to cause Tether Tokens to be issued
or redeemed directly by Tether, you must be a verified customer of Tether.
No exceptions will be made to this provision.
The right to have Tether Tokens redeemed or issued is a contractual right personal to
you.
Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay
is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to
back the Tether Tokens”
You have to be a “verified customer of Tether”....and tether reserves the right to delay redemption
or withdrawal, just in case they lose access to their reserves….
So what is a verified customer?
Well I tried to become one, and got to their verification page…as we can see it says
“check the minimum requirements on our fees page, and note that Tether only processes
transactions equal to a minimum USD 100000”
Yes retail cannot redeem Tether, only those who have a minimum of 100k in USDT.
Aka institutions, market makers, and the “inside” the cartel club.
So everyone should know starting May 10th to today, over 10 billion in Tether’s have
been redeemed as the market cap fell off a cliff.
The reason for this??
Well Tether was losing it’s peg…
Which was causing retail panic…spread by the big news organizations.
Coindesk, Decrypto and even Forbes were covering it.
So what did retail do?
They jumped out of Tether at these “discounted prices” on exchanges….like FTX
So as we know Sam Bankman is the founder of Alameda, the largest Tether holder, but he
also founded and owns the FTX exchange.
He’s part of the inside club that can redeem Tether.
Of course FTX was taking advantage of this opportunity to pick up Tether’s from retail
at discounted prices and then redeem them for profit.
It wasn’t only FTX, it was all the big exchanges doing this…the ones we covered with the
largest USDT volumes.
Binance, Kucoin, Houbi and more…it was a lot of money being redeemed as retail panicked
Why do you think during the heat of all this Sam Bankman said this on twitter May 17th…“Why
didn't our wire transfer land?
"looks like [bank] fucked it up... it's all manual I think".
If only there were a cleaner way of sending value.
Well when your trying to get billions of dollars during retail panic, sometimes a bank will
take their time…
So how close are FTX, Bankman, Alameda and Tether…well we have learned here lately,
the Tether cartel just might be closer than anyone thinks…
Let’s make the connections now…Remember ole Stuart Hoegner, General Counsel for Tether?
Well looking at his Linked’n we can see back he was previously General Counsel for
a company called Excapsa.
Excapsa is Excapsa software, the parent company of Ultimate Bet, the online gambling and poker
platform…and if you didn’t know, Ultimate Bet was center stage in a Poker cheating scandal
that rocked the online gambling world.
From this slate.com article we can get a sense of what happened.
“In 2008, this point was underscored when, acting on complaints from disgruntled players
who couldn’t figure out why they kept on losing, investigators found that Russ Hamilton,
a former poker champion and consultant to the prominent, Costa Rica-based and Kahnawake-licensed,
online poker site Ultimatebet.com, had cheated players out of millions of dollars with the
help of “God mode” software that let him peek at other players’ hands.
The scandal ruined Hamilton’s reputation, and Ultimate Bet officials rushed to assure
people that Hamilton had been acting alone.
Yes, software was built so a player could use a god mode to peek at other players hands.
Wasn’t excapsa, the parent company, a software firm?
Wait, this was in 2008…how could Stuart be involved or connected?
Well this was going on before 2008…as we can see from this article just from last year
it says “Under the terms of the agreement, Excapsa will pay $15 million to Blas-Off Ltd.,
the Tokwiro-controlled company that originally acquired UltimateBet.
"This payment will be used immediately to refund players who were affected by the cheating
scandal that Tokwiro inherited when it purchased the business from Excapsa..
Yup the new owners inherited a cheating platform, built by Excapsa…this was ruled in court!!
But where does FTX come into this?
Well looking at a Dan, aka Daneil Friedberg’s Linkedin we can see he has been with FTX going
on 2 and a half years as their general counsel and now Chief Regulatory Officer…but I don’t
see any Excapsa listed in his profile….
Well he leaves that out for good reason.
From a Haley’s poker blog, who covered the Ultimate Bet and Excapsa scandal, we can see
they say “But even Hoegner pales to one Daniel S. Friedberg, one of the true secret
bad people behind the Excapsa facade.
Friedberg was there from the very start, and his role in online poker matters follows a
strange route indeed.
Friedberg did quite well for himself, garnering several million shares of Excapsa stock in
addition to his pay, with said shares distributed across several different ownership entities.
Then the UIGEA happened, the IPO collapsed, and the hasty "sale" to Absolute Poker was
arranged, with terms of sale very unfavorable to Excapsa's rank-and-file shareholders.
Amid all this, Friedberg switched sides, going to work for Absolute Poker and becoming Scott
Tom's attorney as well.
You read it right: Friedberg kept himself tied to the money stream, wherever it went…
And finally there is this…an audio recording of the insiders, discussing the scandal.
From the article it says “Also present at the recorded gathering were Ultimate Bet founder
and CEO Greg Pierson, and Ultimate Bet attorneys Daniel Friedberg and Sanford Millar.
The men began the meeting by discussing the "God Mode" software designed to view opponents'
hole cards during real-money games…
Let’s just hear from the audio recording what Dan had to say
about this?
Yup Daniel didn’t wan the scandal to come out, but if it must, they would lie, “ideal
thing” saying a former consultant to the company, uh, took advantage of a server flaw
by hacking into the [software] client…
What are the odds, two of Excapsa’s former lawyers now work for Tether and FTX…it’s
not a coincidence.
They hold the cards to the crypto markets, leverage trading and all, and they are playing
god mode on the daily.
Cheers I’ll see you next time!