
Bitfinex, Tether Seek Subpoenas Across US in Hunt for Missing $800M - aspenmayer
https://www.coindesk.com/bitfinex-tether-seek-subpoenas-across-us-in-hunt-for-missing-800m
======
seibelj
Tether (USDT) is similar to fiat currency in the blockchain world. Bitfinex is
the central bank. How they operate is a bit of a black box. I know for a fact
that major firms indeed conduct fiat conversions through them, but you need a
Hong Kong bank account.

Tether is less sketchy than people say, but the fact it _seems_ sketchy is
actually a benefit for a lot of traders who worry about coins such as USDC
being seized on court order (USDC retains functions in the contract to freeze
funds, and maintain US physical presence). The theory that USDT is printed to
pump up the BTC price is not accurate.

------
mtnGoat
Articles like this sure don't help drive adoption of crypto... At this point I
think more has been stolen over the years then actually spent.

~~~
godzillabrennus
Reminds me of this shared on Facebook by Kumar Thangudu:

“A long form on Cryptocurrency...here we go...It took me a few years to wrap
my head around this..... and I'm always learning more.....

If anyone tries to explain cryptocurrency to you without talking explicitly
about money laundering or capital controls, it might cause you to miss out on
the purpose of cryptocurrencies and why 2017 had a meteoric rise in value of
them.

This has to start with an explanation of the world's global systems......

Planet Earth: 195 countries 180 currencies Fiatmarketcap.com 5% of cash is
paper, the rest is not.

You can visualize the macro financial world as 32,220 unidirectional money
pipes between countries.

Roughly speaking, there's rules assigned to each pipe that regulate: \-
Frequency \- Magnitude \- Coordinates (dirty money) \- Speed

Governments don't want you to be able to seamlessly transfer and convert money
between countries and convert between them because of a long litany of money
laundering laws.

European banking is speedy because their governments are perfectly fine with
money laundering for terrorists, cartels, and more...not because they are more
sophisticated....

There's all sorts of acronyms for this and organizations centered around it.

FinCEN - financial crimes enforcement network AML - anti money laundering FATF
- Financial action task force

Complying with money laundering laws for financial institutions can be so
complicated that many of them pay $150K/year for an entire almanac on the
subject.

It's called bankersalmanac.com which has:

625K documents 22K banking institutions worldwide represented in it.

Globally, many foreigners look at the USA as a great way to launder money
because of asymmetric reporting duties to foreign governments.

If you're American and you have money in a foreign bank account, they'll
report it to the IRS, the vice versa doesn't apply.

\---okay---now that you're somewhat familliar with US laws and how the banking
system works---let's talk about fungible assets---and their evolution----

Now let's evaluate the last 30 years of hyped fungible assets --- these are
goods that have been traded for speculative values, are globally liquid, and
can overcome capital controls with ease.

\- Pokemon Cards - Counterfeiting was their demise, but it had its hype cycle
stateside

\- Magic the Gathering- hard to counterfeit, easy to move

\- Second Life - there's 500M USD of in-game assets on secondlife and 60M USD
moves through it annually from what I've been told.

\- Persian Rugs -- hard to transfer but one way to convert Iranian Rials to
USD is via persian rugs. Persian rug dealers are actually just sophisticated
money converters.

\- Art - 1T USD worth of art moved from China to the USA over the last 20
years. If you house it in a public gallery and play with antics....you can
avoid taxes forever with like-kind exchanges, just don't hold the cash for
longer than 180 days.

\- Luxury goods - Breitling watches etc... there's online platforms where you
can trade watches that cost millions of dollars etc...

The list can go on and on, you get the point.

All of a sudden, cryptocurrency comes along.

Zero physical Globally fungible and verifiable Converts to fiat Bitcoin even
has ATMs There are OTC brokers (Both shadow and compliant) which means you can
convert between currencies outside of an exchange.

So then, the question is, what caused bitcoin to become so valuable in October
2017?

Xi Jinping gave a 205 minute address to the Chinese Congress that outlined his
future vision of increased censorship, autocracy, and military might.

The Chinese wealthy wanted to get their money out but they could only take out
$100K USD per a year.

So what did they add to the arsenal of money laundering tools?

Cryptocurrencies.

Lots of dumb retail investors like you and me are fine taking the profits.

For many of China's wealthy, if they wanted to convert 100M USD of RMB, they
didn't mind taking a haircut on their wealth to get it to cold hard US
dollars.

Also, once they get it to the freedom bearing USA --- it's very easy to just
pay off the IRS and keep the money and wealth here.

Bitcoin and the 2K+ cryptocurrencies were a giant money laundering substrate,
the catalyst was Xi Jinping.

Bitcoin leads the way because it has the most anti-money laundering, KYC, and
money service business licensures. There are no mainstream alt-coin OTC
desks(Over the counter.) where you can get your dogecoin converted to US.

The thing that caused the market to be toppled from the top was the
implementation of anti-money laundering and identification enforcement laws on
cryptocurrency exchanges.

Shapeshift.io lost ~95% of its trading volume the moment KYC and AML were
implemented.

Anytime cryptocurrency rises, the only questions I ask myself are about who's
trying to move money and from where.

I will always HODL a bit of it because I believe capital flight is a normal
part of human behavior, and I'd like to capture the upside.”

~~~
seibelj
> _There are no mainstream alt-coin OTC desks_

That’s completely false. Circle Trade did like 30 alts including DOGE. That’s
where all the money is for OTC as BTC has razor thin margins.

