Welcome back everyone. I am Cass PNC.
I'm joined, as usual, after a long time by my partner in
crime, Mr. Bennett Tomlin. How are you today?
I'm glad to be here. How are you, Cass?
Hanging in there, it's we picked a hell of a day to record.
It's possibly the worst storm of the of the year.
So that's had power outages and all that.
But for now we're good and we're just going to try to get through
this. Today.
We're talking about what is known as essentially our
favorite topic or our least favorite topic depending on how
you view it. We are talking about Tether and
we're talking about Tether. I think more just to review how
far we've come or how little we've actually gone since the
very beginning because Tether is nearing or has surpassed roughly
100 billion at market cap. I guess we'll say that there are
100 billion tethers which are you know equivalent to $100
billion. So yeah, we're talking about
that and we're talking about how we got here.
So, so Bennett, I think it's important the Q4 attestations
just came out. Can we kind of talk about that
before we even delve into the 100 billion number?
The quarter for attestation shows that Tether is one of the
most systemically important financial firms in the entire
globe, making billions of profit every single quarter.
Going directly into their control, they are making massive
investments across a wide variety of industries.
Energy, Mining, payment, Tron staking through Luganodes, tons
of these different ventures. All of which they expect to
pretty immediately drive financial results for this firm
and the overall ecosystem as a whole.
Besides that, they've been able to direct hundreds of millions
of dollars directly into Bitcoin.
It's it's it's the perfect storm.
Crypto grows, Tether grows, Tether buys Bitcoin.
Bitcoin grows. Crypto grows, Tether grows.
Tether buys Bitcoin. It's a virtuous cycle.
It is the Super cycle maybe? Well they they just lost their
shirts again so. So I don't know, I don't know or
I guess not. They didn't really lose their
shirts, but they're they are shutting down the you're talking
about Suzu and Kyle Davies, obviously A3 AC who got caught
up in the Super cycle, which is pretty much what Bennett was
just describing, however. Suzu wasn't wrong.
He was just early. Early, yeah.
OK, well, what is it? Isn't the isn't the others the
second part of that phrase that if you're early you might as
well be wrong. Anyway, there was a tweet that I
saw that had stated that Tether had earned more in quarter four
than Goldman Sachs, which is just such an interesting.
Categorical here. It's such an interesting
categorical air. Is that what you were about to
say? It's such an interesting example
of fallacious reasoning. Is is that where you?
Can you get in? Let's get into that.
Can you talk about why? Why you're saying that?
These types of firms like Goldman Sachs, generally, when
they're discussing their profits, they're discussing the
corporate profits accrued to Goldman Sachs itself, not the
appreciation of whatever funds or activities Goldman Sachs has
their hands in. When Tether says profits, they
mean our money market fund. That's not a money market fund
went up by this many dollars, their assets under management
effectively kind of increase that much Goldman Sachs.
When they say profits, they mean the Goldman Sachs shareholder
entity earned this much money. So the right metric really
wouldn't be to look at Goldman or something.
The real metric would be to look at like money market.
And to be clear, Tether by that categorization is still fucking
massive. A $100 billion money market fund
is a fucking massive money market fund.
And we've talked about on here before back in like 2865 billion
was systemically important for the reserve primary fund when
Lehman Brothers was unable to roll their commercial paper,
right. And so that was 65% of the size
Tether is currently. So even in the categories that
Tether exists and Tether is massive and important, I just
think that there's a bit of a categorical error categorization
error when people try to compare what Tether calls profits to
what some audited and recognized firms call profits.
I think that's that that is a really fair acknowledgement and
and important I think also when you reflect on like just the
numbers of employees that I'd like, Goldman has I think like
70,000 employees and Heather has like 11 or something.
So yeah, there's just really they're not the same kind of
business. You're right.
And that was an unfair comparison.
But it is still a comparison that was made and one that kind
of gave everyone pause, I think. It does show that Tether is
massive, Tether is important, and Tether is a new type of
financial firm. And I was being a little bit
glib and I was quickly summarizing Tether's recent
assurance results and some of their investments and stuff like
that. But there's a little bit of
stuff there that's worth digging into.
A little bit like Tether's more recent investment activities.
Tether has been investing in doing venture type investing for
years, right? They were one of the investors
in Samson Mao's Exhortium token sale for the developers of the
Infinite Fleet video game. They led the Series A round for
Celsius and if you believe Jason Stone would later step in to try
to bail it out as well. What's new is now Tether is much
more public about announcing when they're doing various
investments, and they claimed in their newest blog post that
there is a new segregated VC umbrella that they're doing this
under. They didn't disclose the name,
the executives, the structure or anything about that structure,
but we were told it exists. So that's one of the things
Tethers doing recently and they're also still playing games
with words like one of Tethers commitments was that in 2023
they were going to remove secured loans from their
reserves. Now you may look at their most
recent assurance and say, wait a second, there's still over $4
billion in secured loans and Tether would say 5.
Billion, yeah. Yeah.
Tether would say, aha, you've fallen for our trick.
You see, because we don't call those reserves anymore.
Those are excess reserves, a whole new thing.
They don't count anymore. Now you may say tether excess
reserves has reserves right there in the name, but alas,
here we are. It's funny how our first
episodes were about Tether and the issues that we saw with
Tether at the time. People have made points about
these, you know, auditors reports, which I think that's
another thing we should point out, like these are called
independent auditors reports. They're not audits.
They don't say audit, They're not an audit.
They're not. They're not even like an
attestation really. Like these are auditors reports.
It's a completely different categorization.
We've talked about this before, but it's probably been over a
year since we've talked about Tether audits and things like
that. And they're still not audits and
they still fall to the same criticism then, which is Tether
management provides a set of documents to the auditors which
are tasked with a relatively narrow question.
Are there assets in these accounts that seem to match up
at this time with the number of tethers in circulation?
And the auditors say, according to the documents we got, yes.
Right. And that's that's what those
assurances have been since the New York Attorney General
settlement and before that too. But.
And so there's still pretty big limitations to that.
We still haven't gotten the audit that Stew was promising in
2021. And Paolo, the new CEO of
Tether, has kind of stopped promising that as much.
They're still working on it, but in the kind of ambiguous way
that involves not mentioning who's doing it, when they're
doing it, or what's it going to look like.
I mean would you say it's fair to say that at least we have I
guess not right because we don't, this is not an audit,
this is not an actual attestation.
This is just these auditors taking their taking the word of
management at tether. So do we have more insight than
we used to have, or is this just us feeling like we do because
they're saying this is what they have?
I think we do have more insight than when we started this
podcast. We started this podcast like
shortly after the New York Attorney General settlement is
when we started it. We didn't know at that time who
Tethers Partners were beyond Deltech.
We hadn't gotten any of the assurances they started issuing
after that settlement. Really.
Now Cantor Fitzgerald is willing to make statements that suggest
they hold lots of Tethers reserves.
We know some of their banking partners.
We have a better idea of some of their structure and there is a
plausible mechanism now by which Tether would be making the money
they claim to be making, right? And so some of that part makes
more sense now than it did when we started this podcast.
However, there are still a bunch of outstanding questions that
were issues when we started this that are still issues, right?
There's still no audit. There's still like the open
question of at what times did Tether have what assets and how
did that like, how did those assets arrive under tethers
general control. Since we started this podcast,
some of the statements that were still questions then later
resolved as us being right like the CTC settlement illustrated
that Tether was backed only one day out of four in the 26 month
period that they looked like according to like tethers own
statements and stuff and we gained greater insight into like
to be. To be clear, fully backed.
Like they they're. Backed as there.
Were there were assets there but they they?
Were backed as fully. Backed one to one.
Yeah, yeah, yeah. The tension for me with Tether
now is that I think it is plausible to say that Tether and
Tether related entities control somewhere close to 100 billion
in assets valued somewhere close to fairly.
Which means the outstanding questions are how did those
assets get there? Like why are those assets there?
And is the core business being run in a way where it can
continue to operate? Meaning have they found a way to
avoid regulator and law enforcement pressures?
Avoid or comply with right when we started this.
I think a lot of the the pushing from people like us and you know
others bit Fenix and other others who were trying to be
pretty precise with what they wanted to see from Tether and
Bitfinex largely centered around audits.
And one of the things I keep thinking about is how they've
repeatedly promised those those audits.
So they promised them, I think they promised them ultimately
like six or seven times over all these years.
What I think is really interesting about that is the
the constant excuse that they use when they can't get the
audits is auditors just won't do it.
They won't work with us to get these audits done.
They're being too, I think you you've mentioned recently about
the Friedman LLP audit that was going to happen where they they
were like they're being just they're digging in way too much.
They're they're checking too much stuff out, which is like
that doesn't make sense, right. That's how an audit works.
They keep saying they're going to get the audits.
Then when the audits don't happen, they keep saying it's
the auditor's fault. It's not our fault.
But then I keep thinking, why are you promising the audits
over and over again then? And, like, it gets even more
frustrating than that when you pay attention to the specifics
of what Tether executives will promise, right?
Let's go to Let's talk about Stuart Hogner for a second.
Everyone's favorite bald lawyer. In 2021, Stuart Hogner took to
Twitter to again assure everyone that they were working on audits
and that they would be coming soon, although he could not
provide an exact timeline. And what angers me the most is
that he said that the audits would start with the 2018
financial year. And the reason this makes me so
mad and again go back to those early episodes to really
understand this is that 2018 would be a year in which
Bitfinex would take hundreds of millions of dollars from tethers
reserves in undisclosed related party transactions in order to
cover up their own effective insolvency.
After giving over $1 billion to an unlicensed money transmitter
operated operated out of Panama and Colombia.
After this undisclosed transaction to cover up
Bitfinexes, insolvency left Tether unpacked.
The New York Attorney General would begin investigating and
when the New York Attorney General reached out, Bitfenix
and Tether would then enter into a revolving line of credit
agreement where Tether would extend almost a billion dollars
of of credit to Bitfenix to cover up this effective
insolvency. And the same executives signed
this loan agreement for both sides.
And Stuart Hogner in 2021, after the New York Attorney General
settlement took to Twitter to assure people that this that
specific year is the year in which their audits would start.
That they would be able to provide full financial audits
for that year that would definitively show Tether was
continually backed. During a year when we already
objectively know Tether was 100% not backed.
That is a offensive that the lawyer thought that that was a
believable line to tell in public and that no one fucking
cares. Yeah, well, that's the part that
I think is the most interesting is that they've actually been
able to repeat the same lie, right.
And and or maybe it isn't a lie. Well, like, one part of this is
absolutely a lie. The the idea that the audit is
always months away for about seven years or whatever is
clearly a lie, right? Like clearly that is simply not
true. Sure.
And the. Truth.
But then the alternative. Like when I think about it, I'm
like okay if the auditors really cuz they're well, I guess
There's Coinbase, but Coinbase doesn't operate a business like
Tether does. Certainly.
I think everyone will admit that that is at least true and that a
lot of what Tether has done, whether you like them or not,
because I'm sure there's plenty of people out there who listen
to us and feel like, you know, tether's not so bad.
I think it's worth noting that a lot of the stuff they've done is
unsavory at best and even illegal at best, right?
Because they've been fined and slapped down for the for the
stuff that they've done. They were monitored by the New
York Attorney General for years because of how they behaved.
So whether you like them or not, you can admit that they're
unsavory characters doing illegal things and the reason
they can't get these audits isn't because they're trying
desperately to get them. And the auditors are just like
oh, sorry, can't do it. I I really don't.
I we haven't seen any proof that they've been seeking out
auditors in any realistic way whatsoever to get an audit.
And I I don't think they have ever.
I think that is the reality. I don't think they want to get
an audit. I don't think they've tried to
get an audit really. And I wish they would.
I like these are the lies that they utilize to just fool
people. They gaslight like the entire
public and it works. You know where they're just like
we're we're trying desperately to get an audit and it's like,
how could you be trying desperately for seven years and
it doesn't happen? What especially makes me angry,
going back to that, like Stew thing I just said, is he could
have simply stated, having resolved these previous issues,
we intend to, like, start an engagement going forward from
this date covering this period or whatever that was like, deal
with the future, right? Let the past be past.
I say discussing 2014 on a podcast in 2024, let the past be
past. And but instead he didn't.
He said no. Actually, you know that year
where you just heard we were doing all that unsavory stuff we
had to pay millions of dollars to settle lawsuits about yet.
No, actually, the lawsuit's going to cover that period.
Cool, huh? You recently discussed how it's
not even just tether, right? It's Bitfinex as well, which by
the way, I don't know. There's really no separation
between these entities. I think it's fair to say that
while they conduct themselves differently, they're different
businesses. This gets back into the Friedman
audit that you were kind of talking about in a way that I
think is really compelling. Because back in 2017, Bitfinex
had been promising an audit after the 2016 hack because they
had come up with this cockamamie scam to give everyone a bunch of
BFX tokens instead of the money they were actually owed.
And you can go back again to our early episodes to really get
into the weeds on that. But as a byproduct to this
process, there was a bunch of Bitfenix users who accused
Bitfenix of either keeping back some corporate funds or not
giving everyone the same haircut.
In order to assuage these fears, Bitfenix agreed to a full
financial audit and that they would publish their haircut
methodology to prove that every user got the same haircut.
Initially. They would retain Ledger Labs to
do this analysis. Ledger Labs is not a financial
auditing firm and never could have done a financial audit, but
did seem to do a security report that would leak I think last
year and would show that it was Juan Carlo Davassini's keys that
seem to be responsible for the hack.
Sorry, we don't technically know that it was just a key named
Juan Carlo. It could have been a different
Juan Carlo working there maybe. Can't say it was the Davassini
Juan Carlo, but there was also, around the same time, reporting
from Nathaniel Popper that showed that not everyone got the
same haircut, but Bitfinex couldn't get their financial
audit from Ledger Labs. Tether announced that they had
retained Friedman LLP to do an audit for them and then Bitfinex
announced that they had retained Friedman LLP to do an audit of
them. Cass, you were talking about how
there was no separation between the firms and I think that was
especially true back here in this period in 2017.
We've talked about before Tethers redemption window was
not open from April 2017 until November 2018.
All redemptions and issuances of Tether were primarily done
through Bitfinex. And so, especially in this
period, I think if Tether wanted to get an audit, they was going
to need to be an audit of Bitfinex for the auditor to feel
confident that they had adequately audited Tether, you
know, And So what we eventually get to is the manipulated
Friedman report, where Tether moves a bunch of money into a
bank account, has Friedman check it, money comes back out.
And the eventual news that the Tether relationship with this
auditor dissolved because of the excruciatingly detailed
procedures they wanted to do. My intuition is that the
excruciatingly detailed procedures they insisted on was
auditing the sister firms of Tether that were holding Tether
assets in order to make sure that there was no other, like,
encumbrances or liens against those assets.
And the reason we've never seen audits of either of these firms
is there has not been a period where their financial situations
have been disentangled enough that they've been able to
cleanly get an audit on either firm.
That's my intuition about what happened then, and one of the
barriers that still prevents them from getting it.
I mean, we're getting into the weeds of the auditing and the
not auditing and the attestations and what they
promised and what they haven't done.
Earlier you said or collaborating with law
enforcement and I or. Yeah, complying, Complying with.
Complying and I thought that was an interesting direction.
Do you have any thoughts in recent complying they've done?
You and I had a discussion recently where I people forget
about this, but there was a gentleman named Peter Warwick
who came from the Bank of Montreal bank, Bank of Montreal
or I I don't remember which Bank of Canada something some
Canadian banks that he had worked at when he went in as the
Chief of Compliance. I think there were 222 mindsets
when that occurred and one was this is BS.
They're just getting this guy there to make it look like
they're trying to do some sort of compliance.
And then there was the other end of that which was, oh, it's so
over for Tether because if there actually is a compliance officer
who's doing his job, no one will want to use Tether anymore.
I don't think that made a huge difference necessarily.
I, I, I tend to side with the, he certainly was a big name to
bring in and that looked good side.
But also, as you're kind of alluding to here, is that
throughout the past year or two, Tether has really been pushing
this narrative that they're constantly complying with any
law enforcement request. They're complying with them,
they're working with law enforcement hand in hand.
They're suggesting that they're freezing addresses that are
being asked to be frozen, the sanctioned, any OFAC sanctioned
addresses they're now complying with.
There's a bunch of things that they're moving towards, but at
least to make it sound like they're trying to comply with
U.S. Federal laws to a degree.
What do you think though? I think that back in 2021, it
was reported that Tether executives received target
letters from the Department of Justice related to possible
indictments for bank fraud. Since that time, there's been
additional reporting. Specifically, I'm thinking of
like the Wall Street Journal piece that targeted Harbourne's
activity, its signature for Tether.
That gave further credence to the idea that Bitfenix, Tether,
and Friends of Bitfenix and Tether were engaged in a
conspiracy to defraud the banks. But it's also been 2 1/2 years
since those Target letters were initially reported, and no
indictments have been revealed publicly.
There's also, in somewhat of a different track, always been
this false perception that Tether was less likely to freeze
your tethers than like Circle would be to freeze your USDC.
That Tether was in some sense more censorship resistance
because they were more aligned with the ideals of the type of
individuals needing censorship resistance would be using stable
coins. However, that was always false.
Tether always froze more addresses and more coins than
Circle at any point during their existence.
More recently, in like November of 2023, Tether onboarded the
Secret Service and the FBI onto their platform, and since then
we've seen even more of an acceleration in the rate of
Tether freezing. I think that if Tether was
previously useful for less than legal activities ranging from
money laundering to capital flight to gambling to
speculation that some of those activities are going to become
meaningfully harder going forward as the as Tether finds
it harder and harder to say no to various U.S. government
fixtures. What I'm curious about is
whether there was like a formal agreement that will eventually
be revealed in which this access was provided as part of like a
good faith negotiation, as part of like a deferred settlement
agreement, or if it was more informal, whereas, like a
response to growing regulator and law enforcement pressure.
Tether thought this collaboration would serve as
like a relief valve, because it's been a long time since the
target letters and no one's been indicted.
This word, I think is a loaded word that I'm going to say.
So I don't want to, I don't want to propose it like I believe it
in any meaningful sense. But I think for a long time the
word honeypot has been thrown around when it comes to tether.
And this idea that criminals have utilized Tether because
they think that it's safe and it's it has that has that, oh,
we don't give a shit what authorities say to us, kind of
executives who seem like they're like Wild West figures.
But maybe that has been a misperception on all of our
parts. And perhaps they really, as as
you're pointing out, especially in the past few years, have been
doing everything they can to work with authorities not only
to save themselves, but to get rich doing it at the same time.
And not and not lose that money either.
I mean, all of these executives could now walk away from this
project probably I had like 100 sent a millionaires like they
could have. They could have hundreds of
millions of dollars walk away forever at this point, I would
suspect. Wasn't it Zeke that reported
that Phil Potter's buyout from Tether in 2018 was worth 300
million? Yes.
And that was when Tether was, what, $3 billion?
Yes. OK.
Right. Yes.
So you're absolutely right. Like there's a lot of money in
there. The other thing to remember is
the Sam Bankman freed of it all. He's now been found guilty of
seven different felony charges. His firm, Alameda Research, was
the single largest issuer of Tether.
One of the primary things they used with those tethers is
directed them into like the, I'm going to call it, the Chinese
market, but that's that market through like Genesis blocking
entities like that. And so now there's also a lot of
additional attention on some of those parts of Tether's use
case. And if you want to give Tether
the very most benefit of the doubt, or at least want to allow
them to preserve that benefit of the doubt in public, perhaps you
say, well, Tether was an unwitting tool.
This was a company of unwitting tools.
And now we have the opportunity for them to come in and help us.
They can be productive tools instead.
And so Tether potentially has this opportunity under this
pressure to be like to begin collaborating, sharing, pointing
out addresses they know and don't know, and in doing so,
perhaps avoid their own prosecution.
Another thing I want to mention here as well is that I think a
lot of people discuss us and others who criticize Tether.
We have this kind of blanket name that we've been given,
which is Tether truthers with the idea being that we're
conspiracy theorists the same way that the people who say, you
know, Bush did 9/11 are or whatever Jeff you.
Can't melt commercial paper. Right, right.
Yeah, There you go. That's true.
Actually, I just want to say that we've been right on most of
the criticisms that we've given. Like almost all of them, I think
were fair and accurate. Tether being unbacked, it was
unbacked. I mean, that's provably the
case. The idea that there was a
solvency issue and that they were saved and bailed out by the
cryptocurrency community, I mean, that is provable.
They work with money launderers, people like Jiao Dong who've
been arrested. All of this is provable.
None of this is something that we're making up.
There's no conspiracy needed for most of the statements that
we've ever claimed. As time has gone forward, we've
also shifted our perspectives. For instance, I think you and
me, there might be others that disagree with this, but you and
me generally think that Tether is likely fully backed like
that. They have all the assets that
they need to cover the tethers that they have minted.
I used to think there's a chance there's some encumbrance or
other rehypothecation going on at the edges, but broadly they
have lots of assets. They have many many assets.
Realistically, they could probably cover nearly any kind
of near. I'm saying nearly.
There's always exceptions to every rule, but nearly any kind
of major withdrawal? I suspect they could meet most
of those withdrawals, I suspect. At least 24.
Hours worth the question. The questions remain for a lot
of things like how did they, how did they get all this money in
those years, how did they, how did they make things work when
they when they had a much riskier portfolio and markets
would go down or whatever. Like the when they got hacked.
When all these things have happened that have thrown their
business model up in the air and thrown the ability for them to
continue up in the air and they have had some really strange
ways of maneuvering through those moments, all of that is
real. There is no conspiracy.
And I I guess I'm like, I'm tired of being gaslit by the
public who love to be like, see, tether's fine.
It was fine all along. They're like, well, no, that's
not true. And I don't appreciate that
moving of the goal posts where I do I our our criticisms were not
only valid, but good. They were good criticisms and
our concerns and are concerns that remain for Tether.
Things like the fact that they cannot get an audit, they cannot
get an attestation, they won't share their real data with
anyone about any of this stuff. Those are real concerns to have.
There's nothing wrong with feeling concerned about those
things, especially when it's $100 billion supposedly asset
that everything in cryptocurrency relies on.
Like you should be looking at it very, very closely.
And if you think it's conspiratorial to do that, I
would say you're not reflecting enough on how important Tether
is. And at the most basic level, you
go back to one of our least popular episodes.
Stable coins can fork your chain if they want to fork.
Layout the argument that basically these stable coins
being this powerful effects every single cryptocurrency that
these stable coins like have an interaction with.
Stable coins like Tether can be the arbiter of an Ethereum fork,
a Bitcoin fork, all of these different things because of how
important its role is. And they just onboarded the
Secret Service and the FBI. You crypto folks are giving a
lot of power to the US Secret Service and the FBI, and none of
you seem to care. That's weird.
As we as we approach 100 billion tethers, it has been a real
learning experience following this for so long.
I guess this is going on going on six years now that we've been
following the tether saga 6-7 years which is yeah like a it's
actually like a significant portion of my life.
So I I I have learned a lot of things and I part of my
disappointment over the past few months where we we haven't been
we haven't been doing we haven't been doing episodes and I I was
kind of Mia. And I think part of that had to
do with the fact that I, I, I saw FTX and SBF, you know, in a
sense, get crucified, rightfully so.
Not like they they deserved what they deserved that they deserved
their comeuppance. But I think when you reflect on
like finance and and CZ and how many laws they've broken, I mean
you'd probably be it'd be easier to list the financial rules and
regulations they've complied with than the ones that they've
broken. Like they've probably broken
every fucking financial law in the books.
They didn't trade onion futures. That's the important.
One, that's where Casquin comes in.
I think when I saw that CZ was going to walk away from that
with a slap on the wrist. We've seen this before like EOS
offering like acquiring so many billions of dollars and being
again a slap on the wrist of what was it like a, a $55
million fine or something crazy $80 million, whatever it was.
But you like what? So you're going to, you're not
going to stop any criminal from illegally raising funds if
you're going to just take a percentage, a tiny percentage of
what they raised. And if you think CZ getting
sentenced, he's not even going to, he's not even going to go to
prison. Probably he might.
Yeah, I'm. I'm not holding my breath.
He can appeal if. If he does get sentenced, he can
appeal. To over 18 months, he can
appeal. Right.
He can appeal, which that tells you everything you need to know.
He's going to do probably almost no time in prison.
This is my that's what I'm trying to say.
And he's like if you think SPF broke laws and was a not
necessarily yeah a pretty bad guy.
The only thing that CZ maybe didn't do or probably did do,
but just was smarter about it is utilize customer funds in the
same way. And he he didn't have to deal
with a bank run. So he which again shouldn't
happen at a cryptocurrency exchange.
But he's not going to do much time.
I think you and I, after all these years of following tether,
I I don't think they're going to.
I don't think anything is going to.
If it does ever go away, it will be just because it's not it's a
honeypot and it's not useful anymore.
But if if it doesn't go away, I'm not going to be surprised.
And if all these billionaires or these executives are
billionaires at the end of it and they get to be rich and
influential, that also won't surprise me.
So I guess I'm disappointed in regulators.
I'm disappointed in the way the government has handled this
stuff. I understand the wheels of
justice grind slowly but always increasingly fine or whatever
the phrase is. But I don't think that's always
necessarily true. Sometimes they let certain
people go just because they think they can get bigger fish
or they can catch more fish and you just never know.
You never, ever know what the government is going to do.
And the other thing we should remind people, and I know we've
talked about this before in the context of Tether, but these
international finance cases are not easy for the United States
to prosecute. Like even FTX where it had more
obvious next side to the United States than some of these other
cases still represented in some respects some challenging
jurisdictional issues. Firms and executives who spend
more and more time outside the United States makes that more
difficult, makes the calculus look a little bit different.
If they can get cooperation and we talked about this like a
little bit, I think that's kind of what happened with Arthur
Hayes and Bitmex, right, is not that there weren't wasn't rule
breaking, but that eventually they got to a point where
they're like, well, we can definitely get them on this rule
breaking and they'll cooperate and we can record a win.
And then you see by Nance and they do the same thing again.
There was definitely other rule breaking, but we can prove this.
We get the win, we get the cooperation, we get insight into
their business going forward. I could see a point in the next
year where the where SDNY or EDNY, whoever is leading it at
this point comes out and says we negotiated A deferred settlement
agreement with Tether Holdings Limited, Juan Carlo Davisini and
Paulo Arduino as long as they agreed to our monitor these
terms, whatever, no one goes to prison, right?
I I think that's a logical end point for this still.
And part of that comes from issues with like political will
in the prosecution. Part of it is these are just
hard cases, and part of it is just like they want to get a lot
of people And so if you can find out how a whole bunch of people
are moving their money, maybe you let those 3 go.
And also just to to drive one other point home, with FTX you
had a ton of American citizens running the the exchange for bit
Max, you had two, you had one UK citizen, one American citizen
and one Bermudan citizen for Binance.
I think maybe part of the reason they were able to feel Get CZ is
that he's. Canadian and Well and Catherine
Coley gave up the game. And Catherine Coley?
Yeah, yeah. Spoke up very loudly to people
that she needed to, I guess. Speculating, of course we're
speculating that she's the one who did that, and that's why we
haven't earned it from her could.
Have been, could have been anybody good.
If anyone, who was Chief Executive Officer of Finance US
during the exact period she was Chief Executive Officer.
Even though it certainly wasn't Brian Brooks Anyway, there's
reasons that certain people are able to be apprehended by US
authorities ultimately. Like even do Quan, where South
Korea is the one that are they want the US.
They want to ship him to the US. So I I think those ones all have
reasons I can't necessarily fathom.
Which government or why would give up the executives for
Tether and why they would ever be shipped to America?
These people are not in any way, you know they're not coming to
America, right? These people are not making
their way over here. Ever.
On that point, not to interrupt you, but going back to Phil
Potter's buyout, it happens during a period where if you
believe John Betts, Juan Carlo came to John Betts at Noble and
says, how do we take all this money we have now and start
making more money with it? And Phil Potter and John Betts
were like, I don't think we can do that, especially with what
we've been telling people. And Juan Carlo's like, yeah, but
I bet we can do it. And then Phil Potter gets bought
out. They leave Noble.
Noble shuts down. They end up at Deltec, and they
start more aggressively investing their reserves.
Right. And so Phil Potter during this
period was like the executive, like you're talking about with
the strongest ties to the United States, the tether executive who
most definitely wants to be able to come to the United States at
some point during the remainder of his life.
The others? That's perhaps less true.
Right. I don't think Paolo or Juan
Carlo or even maybe Stewart, maybe Stewart comes to the US
regularly. I don't, I, I don't know.
But also, he's a lawyer, so it's a little bit different.
Yeah. Just in general, the major
executives that we know, they have no reason to come here and
they have no reason for the countries they reside in.
I think a lot of them reside in places like Switzerland where
like why would the Swiss government?
Send these people to America. They wouldn't.
And I've seen personally how like Ravid and Oz Yosef, these
two criminals who were associated with Crypto Capital
Corp, which, yeah, again, we've discussed you.
You did mention this company already today.
Reggie Fowler was also a part of this.
But regardless, these two Ravid and Oz made their way back to
Israel after stealing all this money.
And well, like, I don't even know if the US bothers to ask to
extradite these criminals. But if they do Israel says
couldn't possibly care less. These guys have hundreds of
millions of dollars and they live in Israel now and they're
spending their money. So why would we extradite them?
And I think that's how most countries operate when it comes
to financial. I'm not suggesting Israel is
particularly like the worst country about this.
I think Switzerland does things like this and France and the UK
like financial crimes are lower on the totem pole for some
reason. So you know, I I just wouldn't
expect anything from the US in regards to these guys.
But as you said, you never know. And maybe there's going to be
some backdoor deal that we find out about later.
Who knows not. Me.
Yeah, until the $200 billion mark.
Then I guess that's that's our our summary of seven long years
of following Tether. Unfortunately, thankfully
though, I do want to announce that with my return, Cast Coin
is starting up again and obviously we're looking forward
to working with Tether to get Tether on Cast Coin.
I think it's going to be a huge boon to our ecosystem and that
way you can stake your Cast Coin or stake your Tether on Cast
Coin, which I think is going to be really huge for just for the
whole ecosystem in Cast X, the Exchange.
Again, sorry about the bankruptcy, I know I'm sending
out new tokens to for old token holders and I appreciate all of
your patience everybody. You know we're Cast Coins back.