1 00:00:05,100 --> 00:00:08,600 Welcome back everyone. I am Caspian Sea and I'm not 2 00:00:08,600 --> 00:00:11,600 joined as usual by my partner in crime Bennett Tomlin because 3 00:00:11,600 --> 00:00:15,600 today we're trying something a little different and episode 4 00:00:15,600 --> 00:00:19,400 where I read an old article just trying it out. 5 00:00:19,400 --> 00:00:20,800 Maybe we'll do it more in the future. 6 00:00:21,000 --> 00:00:24,400 Tell me what you think. Finding Phoenix. 7 00:00:25,800 --> 00:00:29,200 It's September of 2018 and my third trip to China this time 8 00:00:29,200 --> 00:00:32,299 for a very particular reason. Bitfenix. 9 00:00:32,299 --> 00:00:35,200 One of the largest crypto currency exchanges in the world 10 00:00:35,200 --> 00:00:37,700 is moving massive amounts of Bitcoin volume along with 11 00:00:37,700 --> 00:00:41,000 hundreds of all coins to. But how do they keep the lights 12 00:00:41,000 --> 00:00:45,000 on and the server's running? The two companies bitfenix and 13 00:00:45,000 --> 00:00:48,100 its sister company tether operate under the same parent 14 00:00:48,100 --> 00:00:51,600 company. Hyphen x, i depart a glorious 15 00:00:51,600 --> 00:00:54,700 Sunny Los Angeles Fall to arrive in a damp sweltering, 16 00:00:54,700 --> 00:00:57,900 thunderstorm late. Hong Kong to find iPhone x or 17 00:00:57,900 --> 00:00:59,800 any physical remnant of this company. 18 00:00:59,800 --> 00:01:07,100 Dominating the crypto landscape. My fascination with finesse and 19 00:01:07,100 --> 00:01:11,000 tether the one to one dollar Peg, stable, coin owned by 20 00:01:11,000 --> 00:01:15,400 iPhone x begins a year before in early December. 2017. 21 00:01:15,400 --> 00:01:18,800 The Bitcoin charts are volatile after a multi-year long bear 22 00:01:18,800 --> 00:01:20,900 Market following the collapse of Mount gox. 23 00:01:21,100 --> 00:01:25,000 The largest Bitcoin exchange between 2010 and 2014 and then 24 00:01:25,000 --> 00:01:29,400 an extended neutral Market, Bitcoin is on a tear from a mere 25 00:01:29,400 --> 00:01:32,000 four thousand dollars. A few months earlier to twelve 26 00:01:32,000 --> 00:01:35,100 thousand dollars now, my first purchase of Bitcoin. 27 00:01:35,400 --> 00:01:38,500 In August, so the enormous gains are difficult to Fathom. 28 00:01:38,900 --> 00:01:42,000 I hadn't anticipated or bull run at all and the fear of missing 29 00:01:42,000 --> 00:01:45,100 out feels very real. Fortunately. 30 00:01:45,100 --> 00:01:48,100 It's at this late stage that I stumble upon a Twitter profile 31 00:01:48,100 --> 00:01:52,100 by the name of bit for next. This Anonymous account fills, 32 00:01:52,100 --> 00:01:54,500 the crypto sphere with unprecedented allegations of 33 00:01:54,500 --> 00:01:57,300 corruption, narcissism and malfeasance. 34 00:01:57,900 --> 00:01:59,700 He claims the crypto currency exchange. 35 00:01:59,700 --> 00:02:03,100 Bitfenix along with the stable coin, at procured tether are 36 00:02:03,100 --> 00:02:05,100 propping up the Bitcoin in altcoin space. 37 00:02:05,200 --> 00:02:08,600 Single-handedly and that without them Bitcoin would merely be 38 00:02:08,600 --> 00:02:11,100 worth a few hundred dollars or even zero. 39 00:02:12,200 --> 00:02:15,100 Many of these statements are hard, if not impossible to 40 00:02:15,100 --> 00:02:17,700 prove. However, he also asks a lot of 41 00:02:17,700 --> 00:02:21,200 compelling questions, for instance, tether. 42 00:02:21,400 --> 00:02:24,200 The one-to-one. Backed stable coin can't seem to 43 00:02:24,200 --> 00:02:26,200 get a proper audit or at a station. 44 00:02:26,900 --> 00:02:30,200 Why not? It connects promised a security 45 00:02:30,200 --> 00:02:33,400 audit after they were hacked for 119 thousand, seven hundred and 46 00:02:33,400 --> 00:02:35,800 fifty six Bitcoin. Where is it? 47 00:02:36,700 --> 00:02:40,600 Why didn't coinbase the US based crypto currency exchange with 48 00:02:40,600 --> 00:02:44,400 accounts on bitfenix at the I'm of the hack, get a haircut like 49 00:02:44,400 --> 00:02:46,200 all the other bitfenix customers. 50 00:02:47,200 --> 00:02:50,200 How in, God's name did 31 million tethers. 51 00:02:50,200 --> 00:02:52,700 Get printed and moved without consent. 52 00:02:53,400 --> 00:02:57,300 No one has answers for these seemingly simple questions and 53 00:02:57,400 --> 00:02:59,600 having been attracted to bitcoin by the Mantra. 54 00:02:59,600 --> 00:03:02,700 Don't trust verify. The fact that no one cares 55 00:03:02,700 --> 00:03:08,100 begins to profoundly bother me. As weeks turn into months my 56 00:03:08,100 --> 00:03:10,200 hobby developed into more of an obsession. 57 00:03:10,800 --> 00:03:14,900 I can't stop dredging up old Bitcoin talk Forum threads about 58 00:03:14,900 --> 00:03:19,500 Fanatics crypto Capital core subsidiaries and shells. 59 00:03:19,500 --> 00:03:23,100 With in shells. I open 100 tabs to display open 60 00:03:23,100 --> 00:03:26,600 corporates information and connections within the icij 61 00:03:26,600 --> 00:03:28,800 leaks. It's obvious that there's some 62 00:03:28,800 --> 00:03:33,400 level of obfuscation occurring, but how much of it is normal 63 00:03:33,400 --> 00:03:35,900 advantageous, corporate loopholes. 64 00:03:36,200 --> 00:03:39,600 Versus intentional is tough to know. 65 00:03:41,200 --> 00:03:43,800 It's time to put in the legwork myself. 66 00:03:46,400 --> 00:03:49,700 All signs for fine, xhq point to Hong Kong. 67 00:03:50,200 --> 00:03:53,800 Why Hong Kong? Well, numerous tipsters clue me 68 00:03:53,800 --> 00:03:58,300 in to the fact that I Phoenix bitfenix and tether all have 69 00:03:58,300 --> 00:04:02,500 offices located in Hong Kong and were originally Incorporated in 70 00:04:02,500 --> 00:04:05,700 the economic free zone. Owing to its history is a 71 00:04:05,700 --> 00:04:08,700 British colony and the establishment of one party to 72 00:04:08,700 --> 00:04:11,000 systems. Hong Kong has long been the 73 00:04:11,000 --> 00:04:14,700 first destination for Chinese Nationals to dump you in and 74 00:04:14,700 --> 00:04:18,899 convert to pounds or dollars. Incorporation is easy requiring 75 00:04:18,899 --> 00:04:21,300 little more than an ID and some cash. 76 00:04:22,000 --> 00:04:25,300 It's also an international Hub banking center Financial 77 00:04:25,300 --> 00:04:29,800 Powerhouse and important port meaning that money has to move 78 00:04:29,800 --> 00:04:31,800 easily. Hopefully without too many 79 00:04:31,800 --> 00:04:34,700 questions. A series of other gray Market 80 00:04:34,700 --> 00:04:38,000 catastrophes, the Panama papers legislation to force 81 00:04:38,000 --> 00:04:41,300 transparency from Caribbean banking centers, and the comex, 82 00:04:41,300 --> 00:04:44,500 Scandal Force companies, that would normally do business 83 00:04:44,500 --> 00:04:48,300 elsewhere to establish. Homes in Hong Kong and suddenly, 84 00:04:48,400 --> 00:04:51,600 it doesn't seem so far-fetched that bitfenix would locate here. 85 00:04:52,400 --> 00:04:54,400 There are. Of course, other addresses for 86 00:04:54,400 --> 00:04:57,800 Phoenix, that point to the British Virgin Islands, Panama 87 00:04:57,800 --> 00:05:01,900 and Switzerland, but odds are that these aren't offices at all 88 00:05:01,900 --> 00:05:05,700 instead PO Boxes with the express intent and purpose of 89 00:05:05,700 --> 00:05:09,200 establishing offshore domiciles for shells and shuffling of 90 00:05:09,200 --> 00:05:14,300 funds besides the CEO that no one ever sees or hears from Ian 91 00:05:14,300 --> 00:05:17,800 Ludovic us vandevelde. Lantau Island, the largest 92 00:05:17,800 --> 00:05:21,400 island in Hong Kong home. Perhaps there does exist in 93 00:05:21,400 --> 00:05:25,000 office, in Hong Kong with employees and Executives to boot 94 00:05:25,600 --> 00:05:28,600 my friend Griffin, a videographer and editor, agrees 95 00:05:28,600 --> 00:05:30,600 to join me in, bring his camera equipment. 96 00:05:30,600 --> 00:05:34,200 So that, if we find evidence of Phoenix employees, we can speak 97 00:05:34,200 --> 00:05:37,900 with a reception desk. Anything we have proof to share 98 00:05:37,900 --> 00:05:44,100 with the world. Hong Kong is as exciting and 99 00:05:44,100 --> 00:05:48,000 steampunk as it gets. There's Ferraris Lambos and 100 00:05:48,000 --> 00:05:51,800 Tesla's on every street corner. While vendors, sell their goods 101 00:05:51,800 --> 00:05:54,500 and cheap diners offered duck or dumplings. 102 00:05:54,900 --> 00:05:58,700 It's Beverly Hills meets skid row with all the neon and LCD 103 00:05:58,700 --> 00:06:03,000 screens of Vegas, Kowloon where we're staying in a cramped 104 00:06:03,000 --> 00:06:06,500 apartment with minimal. Amenities is the Supreme essence 105 00:06:06,500 --> 00:06:08,700 of everything. I imagined Hong Kong to be 106 00:06:08,700 --> 00:06:11,500 before arriving. The poorest people living in the 107 00:06:11,500 --> 00:06:14,700 toughest of conditions mixing with the High Finance Bros from 108 00:06:14,700 --> 00:06:17,600 England. The US, China, and Hong Kong 109 00:06:17,600 --> 00:06:20,800 proper all going to the same open Street Markets and dive 110 00:06:20,800 --> 00:06:24,200 bars with three known addresses. In hand. 111 00:06:24,200 --> 00:06:28,200 We take the MTR or the Hong Kong Subway to Central and walk to 112 00:06:28,200 --> 00:06:38,400 the Bank of America tower. Address one, sweet 13f 1308 Bank 113 00:06:38,400 --> 00:06:41,500 of America, tower 12 Harcourt Road Central. 114 00:06:42,300 --> 00:06:46,200 The Bank of America tower is a landmark in Hong Kong, not 115 00:06:46,200 --> 00:06:49,500 because it's particularly noteworthy or picturesque, but 116 00:06:49,500 --> 00:06:52,500 because it's located at a major intersection in the financial 117 00:06:52,500 --> 00:06:56,200 district walking Bridges flowing into, and out of it bus lanes, 118 00:06:56,200 --> 00:06:58,200 and busy streets, striping its edges. 119 00:06:58,600 --> 00:07:01,700 The interior is nothing to write home about a cross between a 120 00:07:01,707 --> 00:07:04,700 mall and a doctor's office in a Story building. 121 00:07:06,300 --> 00:07:09,500 Somehow we stroll right? Past the guards by the elevators 122 00:07:09,600 --> 00:07:13,300 and ride up to the 13th floor. It isn't what I expect. 123 00:07:13,700 --> 00:07:16,800 There's no open businesses on either side of the large hallway 124 00:07:17,000 --> 00:07:19,400 and the offices of iPhone XR shuttered. 125 00:07:19,400 --> 00:07:23,600 A large piece of plywood being used as a door behind, the 126 00:07:23,600 --> 00:07:27,400 inch-thick painted door. Ish thing, we can hear drills 127 00:07:27,400 --> 00:07:29,500 and saws people shouting at one another. 128 00:07:29,600 --> 00:07:34,300 It's a construction site. When we get back to the first 129 00:07:34,300 --> 00:07:37,300 floor, we recheck all the signage and office listings to 130 00:07:37,300 --> 00:07:39,400 see if I Phoenix is anywhere to be seen. 131 00:07:40,200 --> 00:07:44,400 It isn't we asked the guards if there's an iPhone x somewhere in 132 00:07:44,400 --> 00:07:48,600 the building perhaps unlisted. No, they tell us. 133 00:07:49,200 --> 00:07:52,500 So we move on to a nearby address listed for bitfenix in 134 00:07:52,500 --> 00:07:57,700 the easy commercial building. Address to easy commercial 135 00:07:57,700 --> 00:08:02,700 building. Sweet 1902 25. 3-2 61 Hennessy 136 00:08:02,700 --> 00:08:07,300 Road Wan chai. Dark clouds are gathering in the 137 00:08:07,300 --> 00:08:10,200 distance, but the weather is still humid and hot. 138 00:08:10,600 --> 00:08:13,600 The only Sanctuary from the heat is the subway and even that's 139 00:08:13,600 --> 00:08:17,400 packed to the gills when we step into the lobby, were greeted 140 00:08:17,400 --> 00:08:20,700 with a cold air condition Breeze, and no Garden site. 141 00:08:21,100 --> 00:08:23,900 We check a board with names and entities, but it's all in 142 00:08:23,900 --> 00:08:26,200 Chinese and we can't make heads or tails of it. 143 00:08:26,900 --> 00:08:30,000 We stand silently next to a mom and daughter there to visit a 144 00:08:30,000 --> 00:08:33,100 family member eventually looking at the registered office 145 00:08:33,100 --> 00:08:34,900 address. We determined bitfenix 146 00:08:34,900 --> 00:08:38,000 technology. Is LTD should be on the 19th 147 00:08:38,000 --> 00:08:39,700 Floor. Suite number two. 148 00:08:41,799 --> 00:08:43,400 The only thought I'd had until we entered. 149 00:08:43,400 --> 00:08:45,500 The elevator was that. There'd be no one at these 150 00:08:45,500 --> 00:08:47,800 addresses. Griffin asked me. 151 00:08:48,000 --> 00:08:50,900 What questions? Do you have questions? 152 00:08:51,500 --> 00:08:54,200 Yeah, like, what's the plan? Once we get in there? 153 00:08:54,900 --> 00:08:57,200 The elevator opens and the mother and daughter. 154 00:08:57,200 --> 00:08:59,000 Get out. The door is closed. 155 00:09:00,200 --> 00:09:04,800 I don't know. I finally say Griffin. 156 00:09:04,800 --> 00:09:06,900 Laughs. You haven't thought of any 157 00:09:06,900 --> 00:09:10,100 questions. It's a stunning and sad 158 00:09:10,100 --> 00:09:12,600 revelation. Elevator dings. 159 00:09:13,000 --> 00:09:17,400 We've arrived on the 19th Floor. Better Think Fast Griff says, 160 00:09:20,100 --> 00:09:23,400 Jane chk business. Limited is printed on the opaque 161 00:09:23,400 --> 00:09:27,100 window, framed within the door. We knock and a faint voice says 162 00:09:27,100 --> 00:09:28,300 something in. Cantonese. 163 00:09:28,800 --> 00:09:32,100 The tonality makes me think. We're welcome besides the door's 164 00:09:32,100 --> 00:09:34,600 unlocked. There is a small office with a 165 00:09:34,608 --> 00:09:39,100 few desks fluorescent lights, a water cooler, and a printer in 166 00:09:39,100 --> 00:09:42,700 back are to even smaller, empty offices with their doors open. 167 00:09:43,800 --> 00:09:46,600 240s ish, Chinese women stare at us. 168 00:09:46,800 --> 00:09:48,300 Not sure. Why were there? 169 00:09:49,500 --> 00:09:53,600 Hi, I finally say, we're looking for bitfenix. 170 00:09:53,700 --> 00:09:57,600 Is this bitfenix woman closer speaks up? 171 00:09:58,400 --> 00:10:01,700 What? I start using my hands like an 172 00:10:01,700 --> 00:10:05,100 idiot pointing at the floor and all around as though it'll 173 00:10:05,200 --> 00:10:08,900 somehow translate better. Is this bitfenix? 174 00:10:09,700 --> 00:10:14,500 No, she says, oh, I Ponder my next question for a moment. 175 00:10:14,800 --> 00:10:18,500 Have you heard of bitfenix? Do you, do you know if an ex 176 00:10:18,500 --> 00:10:20,300 Technologies? This is limited. 177 00:10:20,600 --> 00:10:21,100 Yes. Yes. 178 00:10:21,100 --> 00:10:22,700 She says, we do little bit for next. 179 00:10:22,700 --> 00:10:25,700 Paperwork sometime. That's amazing. 180 00:10:26,000 --> 00:10:28,600 It Dawns on me. This response might come across 181 00:10:28,600 --> 00:10:31,400 odd. Do they ever come in? 182 00:10:31,500 --> 00:10:36,200 Do they bring in the paperwork? She shakes her head, no only 183 00:10:36,200 --> 00:10:39,500 paperwork. So, no, bitfenix employees work 184 00:10:39,500 --> 00:10:43,400 here and no bitfenix employees. Come in to drop off the papers. 185 00:10:44,000 --> 00:10:47,600 She again shakes her head now. We thank the ladies for their 186 00:10:47,600 --> 00:10:51,600 time and take off Jane chk business. 187 00:10:51,600 --> 00:10:55,100 Limited. It turns out is not bitfenix. 188 00:10:57,000 --> 00:11:02,500 Address three room 803, ka-wah Center 191, Java Road. 189 00:11:02,700 --> 00:11:06,300 North Point. Our next stop is tether which 190 00:11:06,300 --> 00:11:09,900 supposedly rests on the eighth floor in a glassy blue 191 00:11:09,900 --> 00:11:14,400 postmodern, 1980 Chic, Behemoth of a building sitting right next 192 00:11:14,400 --> 00:11:17,000 to the harbor. Getting in proves to be a little 193 00:11:17,000 --> 00:11:19,500 more difficult. We have to explain ourselves to 194 00:11:19,500 --> 00:11:22,900 a guard, meaning a large fancy front desk. 195 00:11:23,200 --> 00:11:26,100 We say, we're looking for tether give a precise floor and off. 196 00:11:26,200 --> 00:11:29,800 Office address and he smiles and waves us through though. 197 00:11:29,800 --> 00:11:32,500 He admits, he's never heard of tether and doesn't think it's 198 00:11:32,500 --> 00:11:34,900 going to be where we're headed the same nervous. 199 00:11:34,900 --> 00:11:38,900 Energy is before fills me. But even more, this building is 200 00:11:38,900 --> 00:11:41,500 beautiful and classy. Compared to the last. 201 00:11:42,000 --> 00:11:46,200 If I Fanatics and tether do have offices in Hong Kong in this 202 00:11:46,200 --> 00:11:48,400 building. It might be proof that there's 203 00:11:48,400 --> 00:11:50,200 legitimate cash in their reserves. 204 00:11:50,800 --> 00:11:52,600 What if they're willing to sit down for a talk? 205 00:11:53,100 --> 00:11:54,500 What if they have billions of dollars? 206 00:11:55,000 --> 00:11:57,600 What if I see Ian loot? It gets vandevelde. 207 00:11:57,800 --> 00:12:01,200 What if they follow us after we leave the fears. 208 00:12:01,200 --> 00:12:05,400 And questions are, extinguished, gold letters behind a glass 209 00:12:05,400 --> 00:12:09,400 door, read proxy management, Consultants, limited and proxy. 210 00:12:09,400 --> 00:12:12,700 CPA, Co limited certified public accountants. 211 00:12:13,200 --> 00:12:16,500 We push a buzzer and stand idly with our GoPros for a minute. 212 00:12:17,000 --> 00:12:21,900 This office values security, a Chinese woman again in her 40s. 213 00:12:22,000 --> 00:12:25,400 Again, surprised to see to westerners opens the door enough 214 00:12:25,400 --> 00:12:28,600 to speak with us. Us her English is perfect. 215 00:12:29,000 --> 00:12:30,200 Hello. Can I help you? 216 00:12:30,600 --> 00:12:31,500 Yes. I say. 217 00:12:31,500 --> 00:12:35,100 We're looking for tether. This is the listed address. 218 00:12:35,100 --> 00:12:37,400 Is this tether? She shakes her head. 219 00:12:37,900 --> 00:12:39,900 No. No, I see. 220 00:12:39,900 --> 00:12:44,000 And do you work with Heather? Are they a client with every 221 00:12:44,000 --> 00:12:46,100 question? She seems more suspicious. 222 00:12:46,700 --> 00:12:48,100 Now. She says, I've never heard of 223 00:12:48,100 --> 00:12:48,900 tether. Sorry. 224 00:12:49,100 --> 00:12:51,800 Have a nice day. She shuts the door and walks 225 00:12:51,800 --> 00:12:57,500 away. Griffin. 226 00:12:57,500 --> 00:13:01,000 I sit in a coffee shop in the lobby of the not tether HQ. 227 00:13:02,000 --> 00:13:06,100 I am defeated. How's your coffee grif asks? 228 00:13:07,200 --> 00:13:11,800 Fine, it isn't very good. Neither is the brownie. 229 00:13:11,800 --> 00:13:15,700 I'm eating. The tail end of typhoon, manku 230 00:13:15,800 --> 00:13:18,300 is whipping Hong Kong and it starts pouring. 231 00:13:20,000 --> 00:13:22,300 I'm not sure what to make of this, or what to do, with the 232 00:13:22,300 --> 00:13:26,500 knowledge that there is, no, I find X bitfenix, or tether, at 233 00:13:26,500 --> 00:13:30,900 least in a physical sense. Too many these details come 234 00:13:30,900 --> 00:13:34,900 across as banal or trivial. But that continues to be my 235 00:13:34,900 --> 00:13:37,500 motivation for asking, for answers from Phoenix. 236 00:13:38,400 --> 00:13:41,800 This group of companies, has over 10 billion in assets, as of 237 00:13:41,800 --> 00:13:44,900 writing this piece, yet. No, one can provide a location 238 00:13:44,900 --> 00:13:47,900 where you can find Executives or even a receptionist. 239 00:13:48,600 --> 00:13:51,000 There's no one to answer. If the money were to go missing. 240 00:13:51,400 --> 00:13:54,800 There's nowhere to go voice a complaint and there's no one and 241 00:13:54,800 --> 00:13:59,400 nothing to hold responsible. But most disconcerting of all is 242 00:13:59,400 --> 00:14:02,000 that the cryptocurrency community, the community that 243 00:14:02,000 --> 00:14:05,800 Prides itself on advocating for trustless and verification of 244 00:14:05,800 --> 00:14:09,900 facts refuses at every turn to demand that same level of 245 00:14:09,900 --> 00:14:13,300 transparency from a company that's repeatedly promised it 246 00:14:13,400 --> 00:14:20,100 and lied. Again, everyone that was just a 247 00:14:20,100 --> 00:14:22,700 test. If you didn't like it, let me 248 00:14:22,700 --> 00:14:26,500 know reach out on Twitter and or are Discord. 249 00:14:26,700 --> 00:14:30,700 And tell me if you did enjoy it. Let me know. 250 00:14:30,700 --> 00:14:35,100 Or if you have any critiques that you think would be good for 251 00:14:35,100 --> 00:14:37,000 making content like this in the future. 252 00:14:37,000 --> 00:14:39,100 I just want to give you guys something a little bit different 253 00:14:39,100 --> 00:14:41,500 offer something a little bit different than our normal stuff 254 00:14:41,800 --> 00:14:44,800 may be something we could do on a more regular basis if you 255 00:14:45,100 --> 00:14:46,500 enjoyed it. Let me know if you hated it. 256 00:14:46,500 --> 00:14:49,000 Let me know again. Thank you for listening.