Welcome back everyone. I am Caspian Sea and I'm joined
as usual by my partner in crime. Mr. Bennett Tomlin how are you
today? I'm feeling Vindicated Cass, how
are you? I'm doing good.
Let's talk about vindication then.
Let's talk about tether. It's a big big day for us.
It's a tether update. There was a story out of the
Wall Street Journal talking. Specifically about some tactics
used by tether to ensure that they had Making do you want to
get into the details? Well, it was a summary of a lot
of things we knew before along with some additional color and
their specific techniques. So as we've discussed on this
show previously, go back way to the beginning, like episodes 1 &
2 for this March of 2017 Wells, Fargo cuts off bitfenix in
tether from their correspondent banking services and from then,
until they bank at deltek tether and bitfenix both struggled to
find consistent banking Partners.
This is the period. We're episode 6, they relied on
crypto Capital core. Alleged money laundering is for
the Colombian cartels, for much of their money movement.
The first one they detail is a conversation between Stephen
Moore and alleged tether shareholder for tether Holdings,
Limited who was communicating with, and it's described in the
Wall Street Journal report as an important Chinese tether Trader
and intermediary. And they were having this
conversation about how they could create fake invoices and
contracts. For the shell company that had
the account at the bank in order to make the exchange deposits
and withdrawals look like business transactions of another
tight eventually. In this conversation, Stephen
Moore apparently said that he would not want to argue any of
the above in a potential fraud or money laundering case.
Now, the reason I'm pausing here is because of episode 4 of our
podcast, there was one specific very important Chinese tether
Trader. Tether shareholder and Partner
for their offshore wind tether Zhou dong Zhou dong plead guilty
to money laundering in China some time after this
conversation between an unknown Trader and Stephen Moore
occurred but if I had to guess if I was making guesses I would
say that that was probably Zhou dong of Renren bit, who is that
traitor, having this conversation with Stephen Moore,
I'm not sure if this is being reported now or not but I know
that before. For Stephen Moore was involved
with a stable coin, called fraks different stand.
Yeah, so I, that's what I was trying to get to the bottom.
Oh, so this is a different Stephen Moore, right?
Yeah, yeah. So, there is another Stephen
Moore who is an economist one of Trumps nominees to the Federal
Reserve who ended up not making it and then ended up connected
to this other stable coin. I've talked about before called
frecks that as far as I can tell is a different Stephen more than
the Stephen Moore who is a shareholder in tether.
There's at least two Stephen Morris in the Crypt.
Occurrence ecosystem. Now do we know ya?
Do we know who this Stephen Moore is like what he is
involved with outside of tether Holdings?
Like this is a very Anonymous character then yeah, this was a
new name for me. I know nothing besides what the
Wall Street Journal had today. Let's get into the weeds a bit
of what they were doing. To obfuscate their cash and
ensure that they weren't losing banking partners because
basically and you and I have been aware of this for a while
that there's a lot of there's a lot of silly silly ways to Avoid
having Regulators, notice you, it can be something as simple as
like changing the name of the company by one letter, which
famously, I think, HSBC got in trouble.
For there's far more sophisticated ways and ways that
these guys ensure that they're not being seen, at least for a
little bit. We discussed already the fake
contracts and invoices to make. What is this?
Basically Money Services business.
This account servicing. This exchange look like
something else often. They'll Lion like import export
businesses for this because then they can make the transactions
fit. The weird amounts they need for
the exchange, deposits and withdrawals, right?
Previous context, we talk about this back in like episodes, 1 &
2. The New York attorney general
investigation revealed that bitfenix in tethered during this
period had relied on with the New York attorney general.
Referred to as friends of bitfenix, which were literal
human friends of bitfenix who were willing to let their
accounts be used by bitfenix for withdrawals, especially one of
those seems to be described. In here and that was by Christ.
Lee CHR is Ely, who is an executive who runs high lab
technology, which is a company that makes set-top TV boxes, the
documents, The Wall Street Journal reviewed seem to
indicate that this person had set up another company called
High Lab Holdings, changing the name slightly as you noted and
then was holding These funds in trust for tether.
Now what's especially interesting here and I want to
draw attention to a couple things Jean-Louis Van de Velde,
also known as Gene Ludovic s. Vandevelde the Chief Executive
Officer of both bitfenix and tether describes in his bitfenix
biography that he previously was at the center.
In the early development of a number of key Technologies,
including embedded systems video, streaming, IPTV and
digital TV. Juan Carlo, Davis Eeny in his
previous import, export businesses which again JL was
part of the Asian side of was importing.
Set-top, TV boxes. Isn't that a fun little
coincidence? This is something that you.
And I have discussed in regard to a few different things.
Whether it's small, retail sales of things like televisions or
cables. Alternatively, it could be like,
you know, Aviation jet fuel, for instance, I don't know.
These are all very big hypotheticals.
These are great money laundering Vehicles, because you can really
obvious Kate these things. You can send an order and then
send it back and you can do all sorts of wacky stuff that on its
surface. Isn't illegal at all.
Yeah, that does make some of those reports surrounding Juan
Carlos business. Specifically, seem a little
weird. Like the reviews online were
customers said, instead of getting what they ordered, they
got yours like a brick or a couple pieces of wood or like
the strange warehouse fire that ended his business, where the
insurance valuation in the valuation reported to Regulators
were very different. It gives those a bit of a
different context. But hey, that's not related to
bitfenix and tether, of course. Yeah.
And as you started to, allude to their Aviation, This Wall Street
Journal reports suggest that bitfenix in tether had
previously had Accounts at Signature Bank in New York,
which we had also known from other reporting that ended up
getting closed by Signature Bank seemingly because they realized
they were bitfenix in tether, which is troubling.
And so shortly after that, shortly, after signature
rejected bitfenix, and tether signature was apparently
approached by a company called AML Global.
AML Global is run by someone else.
We've talked about in this show before episode 14.
I think was the tether papers where we talked about
Christopher harborne. Christopher harborne is the
largest contributor to brexit recently gave a 1.2 million
dollar donation to Boris Johnson and runs a ml Global in aviation
fuel brokering business, which approached signature and
convinced it to give it an account.
The supposed reason they were going that Christopher was going
to be using the account was so that he could trade
cryptocurrencies on Kraken apparently.
Signature Bank, shut the account down when they realized it was
actually being used to service bitfenix, deposits and
withdrawals. Yeah, I want to actually I'm
going to just go ahead and quote from the Wall Street Journal
article. Here, it says mr.
Stephen Moore said, it was too risky to continue using the fake
sales invoices and contracts which he had signed and
recommended they abandoned the efforts to open the accounts.
The emails show. I would not want to argue any of
the above and a potential fraud / money laundering case.
He wrote This is another topic we've discussed pretty stupid to
write about your fraud and money laundering stuff in emails and
in writing. Yeah, just typical at this
point. I am never ever surprised.
When these guys write down their crimes on on paper.
Yeah. No.
It's and it's still always a bad idea.
Stop taking notes on. If I can criminal conspiracy
nigga. Is you Takin notes on a No,
fucking conspiracy. Fuck is you thinking, man?
Signature briefly gave an account to Christopher her born
for those who don't know, Christopher harborne is also the
father of will harborne who is the Chief Executive Officer of
diversify, eight decentralized exchange, which used to be
called Ethan X and was a bit for next sister company just to help
you keep kind of this whole picture in your head.
We knew they were doing all of this stuff right back.
Right after they got cut off from Wells Fargo, Phil Potter,
the chief strategy officer both bitfenix into Heather was in
whale pool, team speaks trying to calm people down and he was
telling them openly into this large group of people like we
play cat-and-mouse games in order to maintain access to
banking been lots of church cat-and-mouse tricks that
everybody in Bitcoin industry has to Avail themselves of and
that correspondent Banks cut us off when they find out where we
are doing things with Bitcoin sometimes those those accounts
get shut down because you know the correspondent Banks figure
out. This is Bitcoin related.
It was no big secret that bitfenix and tether were bending
the rules Wall Street Journal. Also.
Highlighted a thing we've talked about before which is that bit
for necks? At one point talked about their
decentralized banking system and warned people that sharing the
banking information could not just threaten them but the
entire digital token ecosystem, right?
And like we've known for the last several years now that
tether has been under investigation for bank fraud and
I think a lot of the frustration people I'll have had looking at
regulators and law enforcement when it comes to tether is it
seems like there is this almost overwhelming amount of very
public evidence that they were engaged in activities, that, at
least, from where I'm sitting. Which again, I'm not a lawyer
look like bank fraud. I also want to point out that
it's not just bit phonetics, exact Executives that are
suggesting, that tether is a systemic risk to the system and
that if it were to get screwed over that would, that could very
well be like a serious cataclysmic events.
Easy seem Suggest as much to SBF when they were having their
talks over the collapse of ft x. And then we also had back in the
day when Leo got started, and when they did all these tokens
to try to alleviate their hacks, in their pains and sufferings
they're frozen accounts. Etc.
We had Arthur Hays. And we had other individuals
supporting bitfenix because I assumed they were worried about
the systemic risk. If it were to fail.
Well, or even besides that, if we when you go back to like,
what bitfenix Executives themselves said, we had the
conversation between Juan, Carlo, Davis, Eeny, and as Yosef
crypto Capital core, where Juan Carlos said, we need to get
these withdrawals that we need this money because otherwise,
we, otherwise Bitcoin could crash to.
He said, what, like, three thousand 1000, some crazy low
number because like, if tetherin bitfenix were cut off from that
liquidity from the banking system that we'd be the end
effect. And we should probably just
pause briefly and remind people that during This period is also
when they relied on things, like crypto Capital Corp.
We did an episode on that and but for those who don't know,
crypto Capital Corps was a shadow bank for much of
cryptocurrency cracking used it quadriga.
Used it bitfenix. Used it a bit Max was listed on
their website, which is strange because B makes didn't have Fiat
but they may have used crypto. Capital course, I think Gemini
also use them as well. Like I from what I've heard like
every exchange views them, they were run by Reginald.
Fowler former part owner of the Minnesota Vikings Ozzy osis Ravi
Joseph and even manual Molina lie between X and tether ended
up commingling a bunch of their money together and commingling a
bunch of corporate and client funds.
Together, eventually giving over 1 billion dollars to this entity
without a contract, These funds got seized as part of a global
money laundering investigation, which eventually led to the
arrest to principle even manual Molina lie in Greece, and who
got extra day to pull in on suspicion of money, laundering
for the Colombian cartels. So, during this period, we have
Ted Putting money in the bank account of Stewart, hoepner, we
have them using High Lab Holdings.
We have them using crypto Capital core.
They're using a ml Global's account at signature, they were
supposedly using this one account set up for denix Royal
disc to correct limit circuit e which would seem to be part of a
money-laundering scheme connected to the Hamas.
Is a did I didn't al-qassam brigades and the reason and they
called us, they called us jihadist by the way.
I'm just, it's Okay, yes, yes they did.
And like it's not even it's not even necessarily that bitfenix
into other were trying to partner with money.
Launderer has they may have been I'm not going to exclude that
from the list of possibilities but the truth is they had been
cut off from legitimate access to the banking system and we're
relying on anything they could find friends, shell companies,
weird payment, processors, anything, and so you end up with
bitfenix and tether engaged in all these activities where they
end up talking about. We submit these fake invoices
and fake contracts. We made in an attempt to
maintain these accounts, right? And and here's I want to
actually while we're here. I think it's worth reviewing
tethers statement there. They're responding.
God, is it more tether fud from The Wall Street Journal that?
So that is the beginning of this.
If you want to think about how their Public Relation team
thinks it's appropriate to respond to very serious
allegations about money laundering.
Enduring and no proper kyc and obfuscation of who you're moving
money for their response, is to immediately call it Fudd so
clearly they're not taking it very seriously.
They say defense, The Wall Street Journal is clearly waging
a Jihad. Well, they would know all about
it, right? Takes one to know one, if an X
and tether have world-class compliance programs and adhere
to applicable anti-money laundering know your customer
and counter terrorist financing legal requirements.
Biff and ice and tether proud partners of global law
enforcement routinely involuntarily assist, the US
Department of Justice and other Ellie organizations across the
world. These unfair attacks will not
distract us from continuing with those efforts and offering the
most liquid and reliable stable coin experience.
You missed the first sentence of that which I think is the best.
I think you need to read the first sentence again, the Wall
Street journal's report about stale allegations from long ago
is Holy. Inaccurate and misleading.
Yeah, I feel like they have a copy and paste design for how
they respond to allegations. Serious allegations that come up
every two or three months. I just love that they're both
stale, which means that can't be valid.
It doesn't matter if tether committed fraud, five years ago,
four years ago, two years ago, it doesn't matter.
That was then. This is now, you can't blame us
for what we did, then we're now and also that it's wholly
inaccurate and misleading. Because it's it's not wholly
inaccurate because much of this has been reported before, right?
We know it's not wholly inaccurate, the cftc settlement
and the New York attorney general settlement.
Both detail a lot of the same behaviors that the Wall Street
Journal detailed today. So it can't be wholly
inaccurate. Their response is don't actually
go into any detail ever. Ever liked the idea that there
were all these discussions about a Stephen Moore who you and I
both have never heard of this guy.
We've been on top of the tower. Other story, four five, six
years now, like this is obscene and I've never heard of this
guy. So it's news to me that this guy
is an owner part owner of tether, but they don't even,
they don't even bring it up there just like, yeah, it's all
Fudd and inaccurate fake. And yeah, like, who's Steven
more? I'm just getting down to Bare
Basics here, where I'm saying, hello even on this small level,
they haven't addressed the concerns that are being leveled
against Them here, whatever. You know, we'll see what plays
out. I think the counter-argument
always is well tethers been around since whenever and
they're going to continue going on forever, and until that
proves to not be true. Fuck us.
That's right. Till then fuck us.
Yeah, it must continue. Yeah yeah.
Jihad Jihad must continue. On that note all the cast coin
is now going to the stable coin Jihad fund.
No we shouldn't say that. Right?
That's right. Till then fuck us.
Yeah, it must continue. Yeah yeah.
Jihad Jihad must continue. On that note all the cast coin
is now going to the stable coin Jihad fund.
No we shouldn't say that. Right?