True Anon Truth Feed - Episode 180: Untethered
Aired: 2021-08-30
Duration: 01:42:33


=== Crypto Fascist Liz (03:15) ===

[00:00:00]  What up?
[00:00:00]  This is Safe Chat with the Moon Boys.
[00:00:04]  We are on the coin desk right now.
[00:00:07]  Liz, you are currently flipping a physical Ethereum between your fingers as if it was a poker chip and you are a high-stakes gambler.
[00:00:16]  I am a high-stakes gambler.
[00:00:18]  Crypto Liz.
[00:00:20]  That's my name.
[00:00:22]  Can't think of anything more.
[00:00:23]  Crypto fascist Liz.
[00:00:27]  I hate crypto people.
[00:00:29]  Yes.
[00:00:30]  Yeah.
[00:00:31]  Yeah.
[00:00:31]  I am.
[00:00:32]  Listen.
[00:00:33]  Well, okay.
[00:00:34]  I want to get some things out of the way here.
[00:00:35]  I am not a no-coiner.
[00:00:36]  What's it?
[00:00:37]  Is it a no-coiner or someone who's not?
[00:00:38]  Yeah, no coiners.
[00:00:39]  Okay.
[00:00:40]  Yeah.
[00:00:40]  And then Maxis are like yes coiners.
[00:00:44]  Yes coiners?
[00:00:45]  All right.
[00:00:46]  I do have, I think, like $200 worth of Bitcoin or Ethereum.
[00:00:52]  I cannot remember.
[00:00:53]  And frankly, having trouble accessing the wallet.
[00:00:58]  Wait, what kind of wallet do you have?
[00:01:04]  I feel like if I tell people, they'll figure out how to get into it and steal all my funds.
[00:01:08]  Oh, so it's not a cold wallet then?
[00:01:10]  It's MetaMask.
[00:01:11]  I could probably get into it.
[00:01:13]  But it's like on the internet.
[00:01:14]  It's not like you don't have like a physical.
[00:01:16]  No, that's the crazy thing about Bitcoin or crypto in general.
[00:01:19]  It's a crazy wallet or whatever.
[00:01:21]  Well, I'm mostly used to wallets being something that you carry in your pocket and that you take out and, you know, mess with and sort of drop and then forget when you have to go out to dinner and stuff.
[00:01:31]  If you're a gentleman, it weighs about five pounds and it has every receipt that you've ever received in your entire life packed to the gills.
[00:01:40]  I would like to give a little tip to our male type listeners out there.
[00:01:44]  You are going on a date with a beautiful, buxom enchantress and you're like, I got to pay.
[00:01:49]  You know, like, I got to pay for dinner.
[00:01:51]  What you do is you take all your old debit and credit cards and put them in, like take your real one, or you can like keep your real one in like your pocket or something.
[00:01:59]  And then when it comes time, the $900 bill at no boo sushi, you fucking take your goddamn card out and you're like, oh, it, it doesn't work.
[00:02:08]  And then the next one's like, it doesn't work.
[00:02:09]  And then she kind of is like, damn, is he like a high stakes like money trader?
[00:02:13]  Like all those accounts are being shut off by the government.
[00:02:16]  I'll just pay.
[00:02:16]  I don't think that's what you would think.
[00:02:18]  I'll just pay and then continue the date as usual as if he had paid.
[00:02:25]  I don't think that's what you would think at all.
[00:02:27]  100% what you would think.
[00:02:53]  I'm not lying.
[00:02:54]  I hate crypto.
[00:02:55]  Why?
[00:02:56]  I hate it.
[00:02:58]  It annoys me.
[00:02:59]  Why did you make me read about it then?
[00:03:02]  Because we have a job to do.
[00:03:06]  I'm not like joking around being like a goof here or something.
[00:03:11]  If you hate crypto so much, why do you bring it in my life?

=== Why Stable Coins Seem Too Good To Be True (15:39) ===

[00:03:15]  Right.
[00:03:15]  I hate Jeffrey Epstein and we have a podcast about Jeffree Epstein.
[00:03:20]  Yeah, because I'm related to Jeffree Epstein.
[00:03:22]  It's the different thing here.
[00:03:24]  I'm not related to Satoshi.
[00:03:26]  You could be.
[00:03:27]  We don't know who he is.
[00:03:28]  Well, Satoshi, I'm not sure.
[00:03:29]  I am fully Alright so So if Satoshi was in front of me right now, I would do, I would make him hard and then I would cry chop him so fucking hard that his blood would like have like a chemical reaction to like the kinetic force of my chopped hand and his body would explode.
[00:03:56]  I don't want to think about Bitcoin anymore.
[00:03:57]  Yet we have a whole episode.
[00:03:59]  Hello, everyone.
[00:04:01]  Hi.
[00:04:02]  I'm Liz.
[00:04:04]  My name is.
[00:04:06]  Do you hear that?
[00:04:07]  That's silence.
[00:04:09]  Bratoshi.
[00:04:11]  Yeah.
[00:04:11]  My name is Satoshi, Mr. Bitcoin himself.
[00:04:15]  We are joined by the crypto king and producer Young Chomsky over there.
[00:04:22]  Literally, instead of usually he just edits the podcast on a pair of turntables.
[00:04:27]  He just has two giant Bitcoins in front of him right now.
[00:04:30]  Yeah.
[00:04:31]  Podcast is called Moon True.
[00:04:36]  What are the other words that they use?
[00:04:38]  Give me some lingo.
[00:04:41]  Coin.
[00:04:43]  Okay.
[00:04:43]  We are called coin.
[00:04:46]  We are called Moon True Coin.
[00:04:47]  This is what we're doing.
[00:04:48]  We're called Moon Trump.
[00:04:49]  True Moon Coin sounds pretty.
[00:04:50]  True Moon Coin.
[00:04:51]  Okay.
[00:04:51]  We are called True Moon Coin.
[00:04:53]  There's also a lot of like, you know, grossy words that I don't want to say.
[00:04:59]  Like what?
[00:04:59]  Shitcoin?
[00:05:00]  You don't want to say shit coin?
[00:05:04]  You don't want to say shit.
[00:05:06]  You know, it's funny.
[00:05:06]  I was like, because I was reading how to make these.
[00:05:09]  Don't worry.
[00:05:10]  Liz is going to talk the entire rest of the episode.
[00:05:12]  So don't worry that I'm talking too much.
[00:05:18]  I was trying to make a shit coin the other day.
[00:05:22]  Turns out you actually didn't go well at all.
[00:05:25]  Turns out you need to actually spend money to do that.
[00:05:28]  And the only reason to do that is to pump and dump.
[00:05:31]  Yeah.
[00:05:31]  And I want to be clear here, listeners, that if I was like 3% worse, I would be pumping and dumping right now.
[00:05:41]  I'd be like, actually, there's a really cool investment you guys could make.
[00:05:46]  Something that I've been doing.
[00:05:47]  True moon coin.
[00:05:48]  Yes.
[00:05:49]  Something I've been working on with Liz and Young Chomsky for a long time.
[00:05:52]  We're doing this.
[00:05:53]  We're going to back.
[00:05:55]  They always talk about how they're doing something in Africa.
[00:05:58]  So we are backing the government of Morocco and with this coin, all the proceeds from this.
[00:06:10]  And I would encourage you all to buy as much as you can right now.
[00:06:14]  Got to get out of fiat.
[00:06:15]  Everyone's got to get out of fiat.
[00:06:16]  Fiat over.
[00:06:18]  I'm not a fiat guy.
[00:06:19]  No.
[00:06:20]  From now on, this is a full crypto Formula One podcast.
[00:06:24]  100%.
[00:06:25]  Yeah, this is into Formula One.
[00:06:26]  I got really into Formula One this weekend.
[00:06:29]  And then, yeah, who's your favorite?
[00:06:32]  The race?
[00:06:33]  They canceled the race today.
[00:06:35]  I was very sad.
[00:06:39]  You have to get a character.
[00:06:40]  I got really into it.
[00:06:42]  Yeah, you were into it for one day.
[00:06:44]  Now you're like, fuck, they're canceling these races all over the place.
[00:06:47]  Well, it was because of rain.
[00:06:48]  They got rained out.
[00:06:49]  It was too dangerous.
[00:06:50]  It's too dangerous to drive.
[00:06:51]  You know what's funny?
[00:06:53]  They're drivers, but you call them pilots.
[00:06:55]  They call them pilots?
[00:06:57]  Yeah.
[00:06:57]  That's the speed.
[00:06:58]  Well, you know, like a boat over a certain length is a ship.
[00:07:02]  If you go over a certain speed driving, you're technically a pilot.
[00:07:05]  I feel like the cryptoverse and the Formula One verse like kiss way too many times for my liking.
[00:07:12]  Well, a lot of involvement in really small countries.
[00:07:15]  Yeah, really small countries that are basically just shadow banking entities, but somehow recognized by the United Nations.
[00:07:23]  What a fantastic segue, sweet stuff.
[00:07:27]  What are we talking about today?
[00:07:31]  We're talking about crypto.
[00:07:33]  Yeah, we're talking about Trepto, but be more specific.
[00:07:37]  We're talking about Tether, Tether, and Bitfinex.
[00:07:41]  You know what's funny is I actually was going back through some internet stuff and people have been asking for this episode and I didn't realize.
[00:07:49]  But they were like, I can't believe Turon hasn't done a Tether episode.
[00:07:52]  And it's like, well, here you go, Dumbos.
[00:07:55]  Here's your Tether episode.
[00:07:57]  Here's the deal, listeners.
[00:07:59]  I am, I've been investing.
[00:08:01]  I've been investing pretty heavily based solely on astrological charts, birth things.
[00:08:09]  What you do is you just go up to anybody who looks a little witchy and without even saying hello, give them the exact date and time of your birth.
[00:08:17]  And then ask them.
[00:08:18]  That's biodynamic investing.
[00:08:21]  Is that real?
[00:08:22]  I was making a joke about biodynamic wines.
[00:08:25]  Oh, well, I've been biodynamically going up to people and asking for financial advice.
[00:08:31]  And let me tell you what, I could at this point probably purchase Monaco.
[00:08:38]  That's the goal really well in the crypto world.
[00:08:40]  So that we can take over the F1 100%.
[00:08:46]  Corporation?
[00:08:47]  Yeah, the racing league.
[00:08:49]  I don't know what you call it.
[00:08:49]  I don't know what it is.
[00:08:51]  It's very weird to call it a sport.
[00:08:53]  I just think it's weird.
[00:08:54]  Maybe hurling is a sport.
[00:08:56]  You're throwing something.
[00:08:57]  Anything can be a sport.
[00:08:58]  We're always talking about hurling.
[00:09:00]  That's not a sport.
[00:09:01]  Well, it's what I do when I see your freaking face.
[00:09:05]  All right.
[00:09:06]  So let's talk about Tether.
[00:09:07]  And no, we're not talking about the ties that bind two human beings together in eternal love.
[00:09:12]  We are talking about something that I barely understand, despite Liz having to making me read about it for days and days.
[00:09:19]  And even though this episode recording got delayed, and so it was like, oh, cool, you have two more days to read about this.
[00:09:26]  We're talking about Tether.
[00:09:27]  What's Tether?
[00:09:28]  First of all, I don't think you use those two days to read more about this.
[00:09:31]  You are being really cruel to me right now.
[00:09:34]  And second of all, I think you're selling yourself short because I do think you understand it.
[00:09:37]  It's just it's so mind-numbingly, obviously a Ponzi scheme that it feels like you're getting something wrong in your brain.
[00:09:46]  And that's what trips me up about the whole crypto universe, which believe me, we will get to.
[00:09:52]  But so Tether is not like Bitcoin, which is, if you've heard about cryptocurrency, you probably understand.
[00:10:00]  You've probably heard about Bitcoin, right?
[00:10:02]  Because that's the biggest one.
[00:10:04]  We did an episode where Brace tried to mint an NFT and did successfully.
[00:10:12]  So then you also probably know what Ethereum is.
[00:10:15]  But Tether is something a little different.
[00:10:18]  It's what's called a stable coin, which is kind of like a type of token.
[00:10:23]  And the idea of a stable coin is that it actually acts as kind of a bridge between fiat, meaning like dollars or Euros, like real currency, like real money, and like the crypto universe, the crypto markets.
[00:10:40]  I want to jump in here real quick and say something that I've noticed about the coin market is that whenever anyone starts calling something like stable or safe or like moon, you know, implying that it's going to go up a lot, I have a feeling they're lying to me.
[00:10:55]  Yeah, yeah, yeah.
[00:10:56]  If you see that, just be like, oh, it's crypto.
[00:10:58]  The crypto world operates like Bizarro world where everything is like backwards, upside down.
[00:11:05]  So when people say it's safe, what they mean is this is extremely volatile and not safe, and you will lose all your money if you invest in this.
[00:11:12]  Yes, yeah.
[00:11:14]  So actually, so that is so what's weird is that so stable coins are stable.
[00:11:20]  I'm using air quotes here in the sense that their value doesn't change.
[00:11:25]  So like, you know, like not just Bitcoin like goes up and down like crazy, but like literally all other coins go up and down like crazy.
[00:11:32]  And that's how people make money.
[00:11:34]  Like it's like a damn, it's like a damn trampoline guy jumping.
[00:11:39]  Yeah, totally.
[00:11:40]  So crypto is like that.
[00:11:41]  They're stable coins because they're supposedly backed by the dollar.
[00:11:46]  The idea is that the price is pegged to fiat, like in an attempt to one, provide liquidity into the crypto world, but also stability.
[00:11:55]  So the name stable means stable, coin means coin, right?
[00:12:00]  So in the case of Tether and other, like other ones of their types, these guys are pegged one-to-one to dollars, allegedly.
[00:12:09]  These guys are pegged.
[00:12:11]  Yeah, count me out of this one, sweetheart.
[00:12:14]  Yeah, so it's like, so if I have one USDT, I was talking too loud, so I couldn't hear what you just said right there.
[00:12:20]  So I'm going to keep talking.
[00:12:21]  If I have one USDT in my little freaking MetaMask wallet, that is the equivalent to a dollar of real money.
[00:12:30]  Kind of.
[00:12:31]  So it is an equivalent to a dollar or the idea of a dollar.
[00:12:35]  So it could be like a tranche.
[00:12:37]  Come on.
[00:12:39]  An idea of a dollar?
[00:12:42]  Yeah, we're going to say a tranche or a bag of like assets, precious metals.
[00:12:47]  You know, it's supposed to be, yeah, it's supposed to give confidence to the user, being like, okay, this is one-to-one.
[00:12:55]  This, this, the value of this will never change.
[00:12:58]  It will always be worth one dollar.
[00:12:59]  We'll, you know.
[00:13:02]  So, you know, it's a little bit different than other coins where the value changes a lot.
[00:13:08]  Stable coins, they're, they're not decentralized like Bitcoin or other cryptocurrencies.
[00:13:14]  There is one company that mints and or prints is what we should say, prints Tether, which is only one of the many stable coins.
[00:13:23]  But that also means that it's not transparent, right?
[00:13:26]  The idea with Bitcoin is it's decentralized.
[00:13:28]  It's transparent.
[00:13:28]  You can see the mining process.
[00:13:30]  And there's a finite number of them.
[00:13:32]  Yes, exactly.
[00:13:33]  And so technically, Tether can print as many tethers as it wants.
[00:13:41]  Jacob Silverman at the New Republic wrote a piece earlier this year on Tether, and he said, Tether can use its own currency and its relationship to Bitfinex, which we'll talk about in a second, which is a cryptocurrency exchange also managed by Tether Limited Executives to buy other cryptocurrencies, conduct unregulated trading, and even potentially launder money.
[00:14:03]  And that's because it's not decentralized.
[00:14:06]  It's not transparent, right?
[00:14:08]  They can do anything they want with it.
[00:14:10]  So the point of buying, because this is what I was having trouble understanding at first, is the point of buying stable coins whatsoever.
[00:14:18]  And from what I understand is obviously there is the volatility of the crypto market.
[00:14:24]  You know, things are going up and down and all around, et cetera.
[00:14:28]  And so if you, I mean, one of the, one of the many, one of the, I'm not going to say many, I want to say one of the three explainer videos I watched on this, all of which were unbearable and made me want to commit suicide.
[00:14:38]  It's awful.
[00:14:38]  Graphically in front of people.
[00:14:39]  If people, you guys think that YouTube face is a problem, check out Crypto YouTube Face.
[00:14:45]  Real problem.
[00:14:46]  Difficult.
[00:14:46]  Yeah.
[00:14:46]  Yeah.
[00:14:47]  Really hard to jack off to those videos.
[00:14:50]  Anyway, so I watched this and they were saying like, well, if you like want to stay in the crypto market, but like want to put your money somewhere safe that's outside of Bitcoin, if it's like going down, you would put it in USDT or like, you know, et cetera, like a stable coin.
[00:15:05]  And a lot of them are called like, there's like USDC too, I think US dollar coin.
[00:15:10]  They all are basically like they're trying to use one.
[00:15:13]  Yeah, they're trying to give you the impression that they are like connected to the dollar or something.
[00:15:17]  Or, you know, explain it with the name.
[00:15:20]  What I don't understand is that like, why wouldn't you just put it in regular dollars?
[00:15:24]  So it's like, it's hard to actually like kind of cash out of Bitcoin sometimes, right?
[00:15:28]  Yeah, yeah, yeah.
[00:15:29]  It can be difficult because a lot of these exchanges are, which we're going to get to, not banked.
[00:15:36]  So getting your money in is real easy.
[00:15:40]  Very easy.
[00:15:41]  I did it myself and I am so stupid.
[00:15:44]  What's really difficult, and by the way, this is the sign of a really well-regulated, well-maintained, totally transparent and on the up and up market.
[00:15:53]  What's hard is getting your money out.
[00:15:56]  Yeah.
[00:15:57]  But so what they want is, and the idea is that because it's kind of difficult to, you know, the whole thing with crypto is that you're doing a lot of speculation.
[00:16:04]  You're doing a lot of trading constantly because where you make money is on the volatility, right?
[00:16:10]  It's like day trading on fucking, I don't know, speed or something.
[00:16:16]  And so what you want is to be able to make moves quickly.
[00:16:20]  And the easiest way to do that when you can't constantly, you know, buy and sell stuff back into dollars is to have this other thing that you can, these stable coins, which in your head are representative of a dollar.
[00:16:34]  And so it's like one-to-one.
[00:16:36]  It's equal.
[00:16:37]  It's kind of like, imagine if the entire crypto world of which you're the king.
[00:16:44]  Yeah.
[00:16:44]  A lot of child porn here.
[00:16:47]  Can we finish this imagination soon?
[00:16:49]  Imagine that it's like a casino.
[00:16:51]  Okay.
[00:16:52]  And you go to the casino, which you were just at the casino, right?
[00:16:56]  You know, I think this is actually a really fucked up thing for you to bring up considering the PTSD from that event, but keep going.
[00:17:02]  So you show up at the casino and you're like, damn, I totally want to play at the Dogecoin, you know, table over there, but I only have dollars and they only take chips.
[00:17:14]  What do I do?
[00:17:15]  Oh, I got to go convert my dollars to chips.
[00:17:17]  Yeah.
[00:17:18]  So you go up to the desk and you're like, you know, you don't have a problem because you're like, I know at the end of the night, I can get my money back.
[00:17:24]  I just take the billions of dollars that I'm about to win at the Doge table.
[00:17:29]  We love it.
[00:17:30]  To the lady at the casino desk and I change them out and I get my money, right?
[00:17:34]  You feel safe doing that.
[00:17:37]  Yes.
[00:17:37]  Trust.
[00:17:38]  So that's kind of how the cryptoverse works.
[00:17:42]  Those are how the markets kind of operate.
[00:17:46]  And, you know, I say Dogecoin table, but there's obviously, you know, there's a billion of these things.
[00:17:51]  Like there's a billion fucking, you mentioned shit coins, shit coins being produced, you know, every day being mined or tokens being created, being speculated on, you know, pumps and pumps and dumps and dumps, like all over the place.
[00:18:06]  And so USDT is basically the chip in this casino.
[00:18:11]  Yeah, it's the biggest stable coins.
[00:18:13]  Yeah, yeah, yeah.
[00:18:14]  You mentioned, you mentioned USDC and Binance also has one, but Tether is like by far the largest, largest.
[00:18:24]  I was looking, I think that as of like maybe a day or two ago, it had a market cap of about $65 billion, which apparently, according to some memes, It's just $20 billion shy of buying what the Taliban has from now in U.S. arms.
[00:18:43]  By the way, if the Taliban – But you don't understand if that's – I will – If you do want to sell stuff, I will help you do that.

=== Why Tether Is a Fraud (06:07) ===

[00:18:54]  Can we cut that?
[00:18:58]  One last thing I want to say about Tether is, okay, and you brought this up when we were talking earlier.
[00:19:05]  What's really crazy about this thing when you think about it is, okay, they're saying that it's one-to-one of the dollar.
[00:19:11]  Now, that means that they, when they are printing tethers, which by the way, they can just do themselves.
[00:19:16]  There's no mining.
[00:19:17]  There's no transparency that they can just kind of do it in unlimited quantities.
[00:19:23]  So when you say this is backed one-to-one, like backed or pegged seem like two different things, right?
[00:19:29]  Like if it's pegged to the dollar, that means like we're all kind of agreeing out of trust that it's the same amount as a dollar.
[00:19:37]  Yeah.
[00:19:38]  I mean, well, the trust is supposed to be that they guarantee it.
[00:19:42]  Although they don't, by the way.
[00:19:44]  Yeah.
[00:19:44]  And backed would mean that there's an actual physical or digital dollar backing this.
[00:19:52]  Interesting.
[00:19:53]  So I could create a stable coin and be like, don't worry, fellas.
[00:19:57]  Like, I got a ton of precious metals that I got from the Taliban.
[00:20:01]  And whoa, wait, hold on.
[00:20:04]  The Taliban should make a stable coin and back.
[00:20:07]  Oh, there's already crypto people already all over this.
[00:20:09]  I'm not getting it.
[00:20:10]  I know.
[00:20:10]  It was incredibly annoying.
[00:20:12]  But yeah, so, okay, I'm understanding it more now.
[00:20:16]  Well, so, okay, but you say that, okay, they could just do this and lie about it.
[00:20:19]  And guess what?
[00:20:20]  That's what they did.
[00:20:21]  That's the whole thing.
[00:20:22]  Like, Tether, and this isn't like, you know, we're not breaking any news.
[00:20:27]  Literally, there was a huge suit.
[00:20:30]  The New York Attorney General, New York State Attorney General Letitia James, great name.
[00:20:37]  She literally, you know, they settled a huge suit with Tether because Tether is a fraud.
[00:20:43]  It was fucking lying about having a dollar, like dollar backed one-to-one.
[00:20:49]  It didn't have it.
[00:20:50]  So they were saying, they were telling their customers that, like, don't worry, we're printing all these fucking USDTs.
[00:20:55]  We got all these tethers out there.
[00:20:57]  Because that's what they call the USDTs tethers.
[00:21:00]  Yeah, yeah, yeah.
[00:21:01]  So that's the confusing thing we have to, I do want to, so there's Tether Limited, which is the company, and then Tether's lowercase T, which is the stable coin.
[00:21:10]  Unlimited, basically.
[00:21:12]  Yep, literally unlimited.
[00:21:14]  So they were being like, guys, every USDT that we, you know, cripped up in the crypto mines is backed by a real dollar in my bank account and by my, I mean, Tether Limited's bank account.
[00:21:27]  And the Letitia James was like, that's not true.
[00:21:30]  Yeah.
[00:21:31]  This is what she says.
[00:21:32]  Bitfinex, which, by the way, again, that is, and we'll get into this, Bitfinex, which is one of the largest cryptocurrency exchanges and affiliated with Tether's exchange that's kind of connected to Tether.
[00:21:45]  So Bitfinex and Tether recklessly and unlawfully covered up massive financial losses to keep their scheme.
[00:21:51]  I believe that's an allusion to Ponzi to keep their scheme going and protect their bottom lines.
[00:21:58]  Tether's claims that its virtual currency was fully backed by US dollars at all times was a lie.
[00:22:03]  It was a lie.
[00:22:03]  It was fake.
[00:22:04]  It was like totally fake.
[00:22:06]  And that's the thing.
[00:22:07]  Like Tether is a fucking fraud.
[00:22:09]  Like it's a total fraud.
[00:22:11]  And everyone knows it's a total fraud, but it like is maybe the biggest fraud in American history.
[00:22:32]  Okay, so before we explain a little bit of how that fraud works, we need to talk about how this company got started.
[00:22:40]  And it's really weird.
[00:22:41]  There is a really bizarre cast of characters involved here.
[00:22:45]  And I just want to say they're all 100%.
[00:22:49]  I'm not even throwing an alleged in here.
[00:22:51]  I'm just going to say it.
[00:22:52]  They are all 100% fucking criminals.
[00:22:54]  100%.
[00:22:55]  Yeah.
[00:22:56]  And some of them comically so.
[00:22:58]  Yeah.
[00:22:59]  Yeah.
[00:22:59]  Absolutely.
[00:23:00]  In fact, many of them comically so.
[00:23:03]  So this all goes back to like 2012.
[00:23:06]  Something called Dig Finnex.
[00:23:09]  Why did I say Dig?
[00:23:10]  Dig Finnex?
[00:23:12]  Well, it could be either, actually.
[00:23:14]  It could be Dig or Dig.
[00:23:16]  I got to say, I really am sick of these fake words that I have to read in the crypto community.
[00:23:25]  Everything's called Binance.
[00:23:28]  I know.
[00:23:28]  I hate it so much.
[00:23:30]  Binance?
[00:23:31]  Are you freaking kidding me?
[00:23:33]  Binance?
[00:23:34]  That's awful.
[00:23:36]  Yeah.
[00:23:36]  It's like, oh, I eat a little pussy.
[00:23:40]  I suck a little dick on the Binance exchange.
[00:23:42]  Like, give me a fucking break, brother.
[00:23:43]  That doesn't exist.
[00:23:45]  It's like dig FinX.
[00:23:48]  What is what is FinX?
[00:23:50]  That doesn't mean anything.
[00:23:52]  I know.
[00:23:52]  FinTech.
[00:23:54]  FinTech.
[00:23:54]  Oh, let me.
[00:23:56]  Okay.
[00:23:57]  You tell me.
[00:23:59]  Everything.
[00:23:59]  Yeah.
[00:23:59]  You know, this really is Formula One world, and I hate it.
[00:24:03]  Yeah.
[00:24:03]  Yeah.
[00:24:04]  Wait, you love Formula One.
[00:24:05]  Well, no, I do love it, but I just, you know, this whole like international consortium, like Euro rich guy, capital scammer world.
[00:24:16]  Yeah.
[00:24:17]  There is like an aesthetic to all of it.
[00:24:19]  And it's like Tom Brady Laser Eyes Avatar waving the flag in Abu Dhabi to start the fucking Grand Prix or whatever.
[00:24:28]  I hate it.
[00:24:28]  If I was going to start a digital exchange of Bitcoin, I would just call it Rachel Jake's nasty business and make people say that full.
[00:24:36]  But see, now if you remember the laws of the cryptoverse, it's Bizarro World.
[00:24:40]  So you say that.
[00:24:42]  And you know what?
[00:24:43]  Nicest place in the business.
[00:24:44]  I'm on the level.
[00:24:45]  I'm on the you can trust me.
[00:24:47]  If you deal with crypto out there, I want you, I'm talking directly into your ears.
[00:24:50]  I hope you're at the gym right now.
[00:24:52]  You can trust me.
[00:24:53]  You can trust me.
[00:24:54]  I'll hold your money for just a little bit.
[00:24:56]  You can trust me.
[00:24:57]  I love you.
[00:24:58]  You can trust me.
[00:24:59]  All right, Digfinex.
[00:25:00]  Dig Finnex.

=== Aesthetic of Deception (04:16) ===

[00:25:01]  So 2012.
[00:25:03]  This company gets registered in the British Virgin Islands, which is another sign when you're on the up and up.
[00:25:11]  That's where you register your company.
[00:25:14]  So they register in the British Virgin Islands, but it's actually based in Hong Kong.
[00:25:20]  Based in Hong Kong, what are you?
[00:25:22]  A freaking, oh, let me think of a guy.
[00:25:25]  Let me think of a guy.
[00:25:27]  What are you?
[00:25:28]  A guy that writes for The Guardian?
[00:25:34]  What?
[00:25:35]  What are you?
[00:25:35]  A Guardian newspaper reporter?
[00:25:38]  Oh, my God.
[00:25:39]  I can't believe you didn't do some funny, like, you know, CIA counter-protest.
[00:25:43]  I couldn't think of a guy.
[00:25:44]  What are you?
[00:25:45]  Joshua Wong is the guy's name?
[00:25:48]  Well, I was going to try to make a joke about being based, which is, by the way, I was sick of hearing that from day one.
[00:25:58]  Even fatwa against that.
[00:26:01]  Against all of this.
[00:26:04]  It had its moment about two years ago.
[00:26:06]  Yeah, its moment should be in the grave.
[00:26:09]  All right.
[00:26:09]  So this was started by three, three guys.
[00:26:13]  Yeah, Brace is making air quotes, by the way.
[00:26:16]  Air quotes here.
[00:26:16]  He's three guys.
[00:26:17]  One of them is real.
[00:26:19]  Phil Potter.
[00:26:21]  I can't believe I started saying this part so that I have to pronounce this guy's name for the first time.
[00:26:27]  All right.
[00:26:29]  Oh, that was a weird one.
[00:26:31]  Sorry, I did a bunch of ketamine with all my podcasting friends last night.
[00:26:35]  Oh my God.
[00:26:36]  No, I just smoked some sigs.
[00:26:38]  Jan Ludovicus Vandervelde.
[00:26:43]  Yeah.
[00:26:44]  A Dutchman.
[00:26:45]  A Dutchman.
[00:26:47]  And you know how we feel about that.
[00:26:49]  Oh, the perfidious.
[00:26:50]  To the Dutch listening, you know how we feel about you.
[00:26:52]  Gian Carlo Devicinius.
[00:26:55]  Oh my God, Gian Carlo.
[00:26:56]  So let's start with Phil Potter, Harry Potter's pederast cousin.
[00:27:03]  So I think the best way to sum this guy up is by a few choice quotes from a 1997 news article, which by the New York Times article rather, which, by the way, having read it several times at this point, I'm struggling to understand why this was written and who the intended audience was for.
[00:27:22]  The intended audience is just the New York Times social scene.
[00:27:25]  It's just an ad for this guy.
[00:27:27]  New York social scene.
[00:27:29]  Yeah, it is just an ad for this guy.
[00:27:30]  It's pretty funny.
[00:27:31]  It's yeah, the face is the New York economy.
[00:27:33]  Big earner, big spender, little burden.
[00:27:35]  So there's some good quotes in here, including last, this is all about Phil Potter.
[00:27:39]  Last year, he spent his bonus on a 50-inch TV and a $3,500 Rolex watch.
[00:27:45]  He wears custom-made $800 suits and custom-made $80 shirts, always with white collars and white French cuffs and $200 shoes.
[00:27:55]  There's like so many.
[00:27:56]  That's crazy because also imagine like a custom suit just being $800 now.
[00:28:00]  Well, exactly.
[00:28:01]  Talk about inflation.
[00:28:03]  All of the, all of the like, all of the like 17-year-old like TikTok guys that listen to the podcast are standing in line in front of Dollskill right now or like listening to this and be like, that's fucking nothing to pay for a pair of shoes.
[00:28:15]  He is totally wired, as he puts it.
[00:28:17]  His home phone forwards messages to his pager.
[00:28:20]  He answers them over a teeny $800 cellular phone.
[00:28:24]  Mr. Potter.
[00:28:25]  That was the time of tiny, as we've covered on this podcast.
[00:28:28]  Yeah.
[00:28:29]  And actually.
[00:28:29]  No one wanted tiny.
[00:28:30]  No one wanted big.
[00:28:32]  And it's kind of crazy because like in even 2021, like when we're running out of space in the world, like when you have something that you actually can't even change about your body, that's super tiny.
[00:28:41]  People are like, that's fucked up.
[00:28:42]  And like you're mutant and like that looks weird.
[00:28:44]  And it's like, you look like Gigi Allen or whatever.
[00:28:46]  It's normal.
[00:28:47]  So Mr. Potter graduated from Yale.
[00:28:49]  You got to bring back Tiny.
[00:28:52]  I really want to move on from that right now.
[00:28:56]  I'm 5'4 with a penis the size of a thought.
[00:29:02]  It is, it is barely, it's a metaphysical sort of measurement size that we'd have to use here.
[00:29:08]  And I think I'd like to continue talking about Mr. Potter before I cry on the podcast.
[00:29:13]  Mr. Potter graduated from Yale in 1994 with a degree in physics.
[00:29:17]  Oh, you can measure my dick.

=== Ifinex Founding (06:10) ===

[00:29:18]  With a degree in physics, and after a short stint at a hedge fund, joined Morgan Stanley that November.
[00:29:23]  I guess he got married to a guy.
[00:29:25]  He acknowledges that he had never been through a sustained market downturn, but he says he is confident he would survive any Wall Street bloodletting.
[00:29:32]  Not the kind that I'm going to bring.
[00:29:37]  Sorry, that was like me doing like an anonymous guy during October Wall Street.
[00:29:41]  This is a quote from him.
[00:29:42]  And this is actually very telling to continue considering what he did.
[00:29:46]  I can continue to come up with new products to add values.
[00:29:49]  Not British, he said.
[00:29:51]  I'm going to not be responsible for getting money.
[00:29:53]  Getting it's hard when the market goes down, but there will still be products to sell.
[00:29:58]  It'll just force me to be a little more creative.
[00:30:01]  This is in 1997, long before the crypto scam he got himself involved with.
[00:30:08]  A week after this story prints, Potter quote unquote resigns from Morgan Stanley, allegedly after a conversation with the CEO, I guess, about bad press.
[00:30:18]  They didn't like the article.
[00:30:20]  Yeah, no, they were like, wow, this totally does not reflect well on Morgan Stanley.
[00:30:25]  You gotta, you gotta go.
[00:30:27]  They gotta fired him because of this article, which is really funny.
[00:30:30]  He was like a very typical evil guy, you know, as we said, Yaley, Morgan Stanley, Bear Stearns, all that kind of shit.
[00:30:37]  And then he got into technology, specifically on how to do Wall Street-type shit online at trading programs, all that kind of stuff, which I think is a is that foreshadowing or it's not foreshadowing.
[00:30:49]  That's just like the first part of a story.
[00:30:51]  Yeah, I think it's just the first part.
[00:30:54]  But so the other guy, the guy that you don't like saying the name of Jan, yeah, Jan.
[00:31:00]  I'm just gonna say, why don't you, you know what, baby?
[00:31:02]  Why don't you say it?
[00:31:03]  Why don't you hit me with the Jan?
[00:31:04]  Jan Ludokovis?
[00:31:08]  Okay, you are, you are mentally stupid.
[00:31:12]  Ludokovis?
[00:31:14]  It's Ludovicus.
[00:31:16]  What is it?
[00:31:17]  Jan Ludovicus Vanderveld.
[00:31:20]  I'm just gonna call him Vanderveld.
[00:31:22]  Uh-huh.
[00:31:24]  It's incredibly difficult to find information on this guy.
[00:31:28]  Yeah.
[00:31:29]  Very, very difficult.
[00:31:30]  Like you like Wayback Machine of Wayback Machine pages.
[00:31:37]  I can probably give you some insight onto that.
[00:31:40]  I think he's Phil Potter.
[00:31:43]  So this is, as far as I know, you're the only person to have this theory.
[00:31:48]  Yeah, I think it's just the most obvious one.
[00:31:50]  So, all right, of the three guys that started this company, because there's actually stuff out there on Giancarlo.
[00:31:56]  There's nothing out there on Jan Ludovic.
[00:31:58]  Can you find a picture of him?
[00:31:59]  No, no, no.
[00:32:00]  I'm saying, why do you think he's Phil and not Gian Carlo?
[00:32:03]  It seems like something Phil would come up with.
[00:32:07]  I think Jan Ludovicus Vanderveld is who is the CEO of Bitfinex, correct?
[00:32:14]  Yeah.
[00:32:14]  I think he's a fake persona that's constructed by Phil Potter.
[00:32:19]  I think that that would be so fucking crazy.
[00:32:21]  Has anyone?
[00:32:22]  I literally do not even know this.
[00:32:25]  I don't know if anyone has even tracked him down or found him.
[00:32:27]  No, no one has.
[00:32:28]  No one has.
[00:32:30]  So apparently he's A Hong Kong-based tech entrepreneur, which, okay, may be who went to college in Taiwan, but there is like nothing else out there on him.
[00:32:42]  There's like no pictures, nothing like this.
[00:32:44]  I think he's an invented persona, like Satoshi.
[00:32:47]  That's very weird.
[00:32:48]  So then the third, the last of these jokers is Giancarlo DeVincini, who is a real person.
[00:32:56]  A full plastic surgeon.
[00:32:58]  Yeah, he didn't.
[00:33:00]  He was not a plastic surgeon for very long, which leads me to believe that maybe he was not very good.
[00:33:05]  You just need to do one last big titty job and then I'm out.
[00:33:11]  One last hit job and that's it for me.
[00:33:15]  In 1996, he was convicted of software piracy.
[00:33:18]  Which is, so he's literally a pirate.
[00:33:21]  Yeah.
[00:33:21]  Oh, so even though you didn't burn a myth CD or two on a flight.
[00:33:25]  No, he had to pay Microsoft $100 million in restitution for all of like, apparently he was pirating fake Microsoft products, which I assume is just, I mean, it's in the mid-90s, early 90s.
[00:33:37]  So you're just pumping out like fake Microsoft Office and Excel.
[00:33:41]  Yeah.
[00:33:42]  That was a thing.
[00:33:44]  I mean, I use, don't you use Open?
[00:33:46]  I use OpenOffice on my computer.
[00:33:47]  It's like a fake.
[00:33:48]  What's OpenOffice?
[00:33:49]  It's like a fake.
[00:33:50]  It's like no, I pay for it.
[00:33:52]  I do.
[00:33:53]  I pay for Office.
[00:33:54]  Okay.
[00:33:54]  You are out of your mind.
[00:33:56]  You can just get it for free.
[00:33:58]  I know that.
[00:33:59]  So iFinex is founded with these three guys.
[00:34:02]  Bitfinex.
[00:34:05]  Now, and again, that's a, you know, this is, Bitfinex is a major, you know, crypto exchange.
[00:34:10]  That gets incorporated in Hong Kong like one year after iFinex gets founded by these guys.
[00:34:18]  So the names that appear on the company register for Bitfinex have Potter as the chief strategy officer, Vanderveld as the CEO, and Giancarlo as the CFO, the chief financial officer.
[00:34:33]  So it has the same like a C-suite grouping of people as iFinex.
[00:34:40]  Yes.
[00:34:41]  And so a year after that, in 2014, this company called Tether gets set up in the British Virgin Islands with two directors on its register, Phil Potter and Giancarlo DeVicini.
[00:34:55]  Now, I'm saying that in a weird way where it's like, why are you saying this all like structured like that?
[00:35:00]  Because all of this was only made public in the Paradise Papers.
[00:35:06]  No one actually knew who the, like, was on the board of the, of Bitfinex until the Paradise Papers were leaked in 2017 and people were able to like put together that the same people who founded Bitfinex also founded Tether.
[00:35:25]  That's like fucking insane.
[00:35:27]  Yeah.

=== Paradise Papers Reveal (04:28) ===

[00:35:28]  Yeah.
[00:35:28]  100%.
[00:35:30]  They went through that famous law firm, Applebee, the one that was setting up all the shadow companies.
[00:35:35]  And so, again, great sign of things to come if you're working for the shady law firm that set up all of the shadowy financial shell companies that Jeffrey Epstein used.
[00:35:46]  That comes out in the Paradise Papers.
[00:35:48]  Jeffrey Epstein himself was also a little bit of a Bitcoin guy, too.
[00:35:54]  There is that famous self commissioned interview that he did for a Bitcoin website that was basically like an advertorial interview for him about Bitcoin.
[00:36:05]  And I'm really curious.
[00:36:07]  I would love to see what kind of Bitcoin holdings that Ghelane Maxwell has.
[00:36:12]  I would love to see into her digital wallet.
[00:36:16]  I, yeah, that's a good thing to, I wonder about that as well.
[00:36:20]  It's funny.
[00:36:20]  You can sell all that stuff and it shows that you're liquidating everything, but that Bitcoin wallet's going to have.
[00:36:26]  I mean, Bitcoin's at what, 48K now?
[00:36:28]  Right now?
[00:36:28]  None of my business, frankly, what it's at.
[00:36:30]  Okay, back to Tether.
[00:36:32]  So, okay, Tether gets registered in Hong Kong.
[00:36:35]  It starts minting its first Tethers, lowercase T.
[00:36:40]  But it's actually not the only firm minting dollar-backed coins.
[00:36:44]  This was like kind of a thing that was floating around that people were trying to figure out how to do.
[00:36:49]  And there was another firm, which actually we've mentioned on the show.
[00:36:54]  Yes, we have.
[00:36:55]  Way back in the day called RealCoin, which I think was that name better.
[00:36:59]  Real coin.
[00:37:00]  First episodes that we talked about this in.
[00:37:02]  Realcoin was founded by one Brock Pierce.
[00:37:08]  Now, I've been doing a lot of, I hesitate to say research because it's been almost entirely picture type based looking.
[00:37:18]  Yeah.
[00:37:18]  Brock Pierce is at most 5'2.
[00:37:22]  He's very small.
[00:37:23]  That's why I think that's why he wears so many hats.
[00:37:25]  He's a goblin.
[00:37:26]  And I mean that like literally, not like, oh, he's a jack of all trades.
[00:37:29]  No, he wears literally always like festooned and he's peacocking.
[00:37:34]  That's what he's doing.
[00:37:35]  He's peacocking.
[00:37:37]  Ladies, let me hit you with a little piece of advice here.
[00:37:41]  If there is a guy who is in your life in some way, whether it be as a friend or a potential romantic partner or a co-worker, he's always showing up in some new lid.
[00:37:53]  That's what they call hats at the store lids.
[00:37:57]  There's something going on with him.
[00:37:58]  He's got something to hide.
[00:37:59]  A hat hides something from you.
[00:38:01]  It hides, first of all, your top chakra, which is one of the most important ones.
[00:38:06]  Well, it's the top one.
[00:38:08]  Yeah, yeah, yes, exactly.
[00:38:10]  And it also hides what's going on with that hair up there.
[00:38:14]  Yeah, absolutely.
[00:38:15]  It can hide the hairline and distract from the height.
[00:38:18]  You know, that's it.
[00:38:20]  Oh, yeah, absolutely.
[00:38:21]  And that's why I wear a giant 50-gallon cowboy hat.
[00:38:25]  Yeah.
[00:38:26]  I don't want to talk about, make jokes about me being short anymore.
[00:38:28]  I'm not sure, just to be clear.
[00:38:31]  I got that hat on.
[00:38:32]  Four right now with the hat, with my foot-tall hat on right now.
[00:38:37]  I am 6'4.
[00:38:39]  I want to be clear about that.
[00:38:41]  The hat is the hat makes the man, and the man is 6'4 with the foot long.
[00:38:46]  Let's keep going.
[00:38:47]  So, the real coin was basically, I mean, that was that.
[00:38:51]  So, from what my limited understanding of this is that obviously when Bitcoin, especially in this earlier era of it, you know, 2012, 2013, 2014, people were still talking about it being maybe being a currency at some point.
[00:39:03]  Real coin was one of those actual attempts to be like, maybe we could do something actually more currency, less speculative with this.
[00:39:10]  Am I misunderstanding?
[00:39:11]  Yeah, yeah, yeah.
[00:39:12]  So, they kind of had the same idea as Tether.
[00:39:14]  Like, so what's funny is that, and this is all very, again, very weird because Brock Pierce is going to come up again in this story.
[00:39:23]  Oh, yes.
[00:39:24]  Yeah.
[00:39:24]  Spoiler alert.
[00:39:26]  Um, five months later, right?
[00:39:29]  Five months and just two months after Tether gets registered in Hong Kong, Real Coin, Brock Pierce's startup, gets re it rebrands itself as Tether.
[00:39:42]  So it sort of merges with Tether.
[00:39:45]  So this is the thing.
[00:39:47]  Okay, so this is the thing.
[00:39:48]  There's this now, there's a kind of like people kind of gloss over it and say, oh, that's what happened.

=== RealCoin's Shadowy Merge (15:03) ===

[00:39:57]  There was some kind of merger or they got bought out and there were not a lot of details.
[00:40:01]  But no, like if you go back into the reporting at the time, like RealCoin literally just rebrands itself as Tether.
[00:40:09]  So there was no official anything.
[00:40:13]  I don't know.
[00:40:14]  It's very confusing.
[00:40:15]  It's they had this press release at the time I was reading.
[00:40:19]  And they also, they add that like Tether announces new partnerships with Hong Kong-based Bitcoin exchange, Bitfinex.
[00:40:30]  Oh, I want to be clear about this whole Hong Kong-based thing too.
[00:40:34]  Is people have gone to the so-called offices that Bitfinex and Tether, et cetera, have in Hong Kong, and there is nothing there.
[00:40:41]  It's like some Delaware shit where it's like a P.O. box.
[00:40:44]  Or like UPorn.
[00:40:45]  You know that four people work at UPorn?
[00:40:48]  Yeah, I know all four of them.
[00:40:49]  Dude, the biggest fucking website on the internet, four people working.
[00:40:52]  Uporn is not porn.
[00:40:54]  Oh, yeah.
[00:40:55]  Uporn.
[00:40:56]  It's got to be.
[00:40:57]  Is it Pornhub?
[00:40:58]  It's got to be Pornhub.
[00:40:59]  I don't know.
[00:40:59]  No, they know the Pornhub.
[00:41:00]  Also, if that's wrong, don't take it up with me.
[00:41:02]  I'm just repeating what someone told me.
[00:41:04]  Yeah.
[00:41:05]  Well, the Pornhub is run by a company that has basically one of the most opaque.
[00:41:10]  That's the Luxembourg one, right?
[00:41:12]  Yeah.
[00:41:13]  That's why I think it is U porn.
[00:41:15]  Yeah.
[00:41:15]  And not Pitcoin.
[00:41:16]  Well, they might own a bunch.
[00:41:17]  I think they own a network of them.
[00:41:20]  Anyways, so with Tether and Bitfinex and this little nexus of groups, they're all in cahoots.
[00:41:28]  all basically share the same upper leadership and well that's the thing yeah i i want to like be clear about this so in that press release from coinbase they say bitfinex hasn't or tether has announced a partnership new partnership with bitfinex whatever that's from 2015 that is two years before we find out because of the paradise papers leak that actually these two companies are owned by the same people Basic, yes.
[00:41:53]  Okay.
[00:41:54]  So I know there's no insight.
[00:41:56]  It was like, oh, these two different companies are partnering, not knowing it's the basic, it's the same company.
[00:42:01]  And that's the thing.
[00:42:02]  Like the crypto world is literally, it's so, it's the Wild West.
[00:42:07]  There's no regulation.
[00:42:09]  There's no one looking into it.
[00:42:11]  It's literally, you can just send press release after press release to like these fucking blogs and get a bunch of like shillers on YouTube, you know, pumping and dumping.
[00:42:19]  And everyone thinks that, oh, you say it's Hong Kong based.
[00:42:22]  Oh, you say it's, there's no relation.
[00:42:24]  It's a partnership.
[00:42:25]  Oh, we're merging.
[00:42:25]  And people just take your fucking word for it.
[00:42:27]  It's literally all fake.
[00:42:28]  It's all fake.
[00:42:29]  Well, it's funny because it's built so much around privacy too.
[00:42:32]  And so like, you know, that's like, it adds this sort of extra layer of excuse.
[00:42:37]  It's not saying that like the regular financial world, which this, by the way, is quickly merging with, is like some, you know, open thing or whatever, but usually you at least know the names of the people who own a lot of the companies.
[00:42:49]  Yes.
[00:42:50]  Some exceptions, of course, existing.
[00:42:53]  But yeah, it is.
[00:42:54]  So these two get together.
[00:42:57]  Can you explain to me a little bit what a crypto exchange does?
[00:43:01]  Yeah.
[00:43:01]  So yeah, I mean, imagine an exchange is basically like these like private markets, right?
[00:43:07]  And so some are maybe a little bit more legit than others.
[00:43:12]  Maybe you've heard of the one like Coinbase.
[00:43:14]  Yes.
[00:43:15]  Or Robinhood allows you to trade some cryptocurrency on its exchange, on its like, you know, platform rather.
[00:43:23]  But there are all different kinds of exchanges.
[00:43:28]  And there are some that are like, you know, seemingly more legit than others.
[00:43:34]  There's like, I know people who are into crypto who have to use a VPN in order to access markets that are not legal in America because they offer 10 to 100 times leverage, for example.
[00:43:48]  Yes.
[00:43:49]  So you can trade different crypto or, you know, whatever on insanely high leverage, which is fucking crazy.
[00:43:59]  I have to use a VPN for like the powdered rhino horn stuff.
[00:44:02]  I get.
[00:44:02]  So I get that.
[00:44:04]  So yeah, but there's like all these different, I mean, there's like so many crypto exchanges, so many.
[00:44:09]  And usually they all require you to play in Tether.
[00:44:31]  So that is the sort of defining thing about Bitfinex, to me at least, is that the first few years of their existence is like a Tether bonanza.
[00:44:42]  Yeah, yeah.
[00:44:43]  They print a shit ton of tether.
[00:44:46]  Also, like, it's not very good.
[00:44:48]  They don't have a good couple first years.
[00:44:50]  They get hit with a shit ton of fines because they're doing like a ton of illegal stuff.
[00:44:56]  Okay.
[00:44:57]  The CFTC hits them with like a 75K fine.
[00:44:59]  Basically, they were allowing people to borrow funds from other users in order to leverage up and trade Bitcoin on margin, which is, this is all illegal financial shit.
[00:45:10]  You can't do that.
[00:45:11]  You literally can't do that.
[00:45:12]  I can't even understand that.
[00:45:14]  So yeah, I definitely can't do that.
[00:45:16]  There was like a point where they weren't even giving people coins, that they were just holding them as deposits in wallets on the exchanges they owned, but like we're not cashing people out.
[00:45:24]  I mean, and that happens over and over.
[00:45:26]  I mean, Binance right now is having an issue.
[00:45:30]  I think.
[00:45:30]  Well, they're always having issues in and out, but I think that they have been freezing people's wallets and not paying people out.
[00:45:38]  Yeah, that's the crazy thing about a lot of this crypto stuff, and especially about some of this Bitfinex stuff, is they can really just swoop in there and take some money out of your fucking wallet.
[00:45:48]  It looks like.
[00:45:48]  Well, they did.
[00:45:49]  They literally did because they got hacked.
[00:45:52]  Like, they got a huge hack.
[00:45:53]  They had one hack where their wallet was, it got hacked and like 1400 Bitcoin got stolen.
[00:46:01]  That was in 2015, which, by the way, like, that's probably, whoever stole that.
[00:46:07]  I have my ideas.
[00:46:09]  Kudos, because that's probably, that's worth a shit ton of money.
[00:46:13]  I think all the hacks for Bitfinex were inside jobs.
[00:46:15]  Oh, I'm sure.
[00:46:16]  There probably were, allegedly.
[00:46:18]  But then hacks of all these exchanges are, but yeah.
[00:46:21]  Yeah.
[00:46:22]  A year after that, they get hacked again, which was like up until this point, up until I think like this year was the biggest, largest Bitcoin hack in history.
[00:46:34]  This is from Coindex, Coindesk report.
[00:46:37]  I almost said Coindexter, like Coindexter.
[00:46:40]  Hey, this is Coindexter.
[00:46:42]  That's a good character.
[00:46:43]  This is from Coindesk reporting at the time.
[00:46:46]  More than $60 million worth of Bitcoin was stolen from one of the world's largest digital currency exchanges yesterday.
[00:46:52]  And nearly 24 hours later, the event is still shrouded in mystery.
[00:46:57]  So yeah, 119,000 Bitcoins were stolen, which now they're almost at 50K a pop.
[00:47:07]  So you can do the math on that one because this fucks the Bitcoin market up too, right?
[00:47:12]  Yeah, yeah, it like crashed prices.
[00:47:13]  Like it, there was a whoop, it lost like 25% of the value, but it did recover, but still it was, it was a pretty big deal.
[00:47:20]  Um, it looks like, although again, the, you know, these companies are extremely opaque and getting any kind of straight answers out of them is extremely difficult, even six years later.
[00:47:33]  But it looks like it was about 72 million in Bitcoin that was stolen from Bitfinex, which accounted for about 0.75% of all Bitcoin in circulation at the time, which is a lot.
[00:47:43]  Lord, yes.
[00:47:43]  Yeah.
[00:47:44]  That is a lot.
[00:47:45]  So they, they get, they figure out this whole thing where they're going to like socialize the loss scenario, which basically means they announce a 36% haircut.
[00:47:55]  Can you, all right.
[00:47:57]  I've read about this a bunch of different times.
[00:47:59]  I watched a video on it.
[00:48:00]  I listened to a podcast on it.
[00:48:03]  By haircut, they mean they're taking money from your account.
[00:48:06]  Yes.
[00:48:08]  Okay.
[00:48:09]  Yeah.
[00:48:10]  They just took money out of people's account and they said, we can't cover this loss.
[00:48:15]  So you are.
[00:48:18]  And we're just going to take, well, we did all this math and don't worry.
[00:48:21]  Take our word for it.
[00:48:22]  Oh, great.
[00:48:23]  We're just going to take 36% out of everyone's.
[00:48:25]  We promise everyone's account.
[00:48:27]  But reporting came out later that Coinbase like threatened to sue.
[00:48:31]  I think it was the New York Times that was reporting on this.
[00:48:33]  That Coinbase threatened to sue them and was like, no, And so Bitfinex was like, ooh, not you, Coinbase.
[00:48:40]  We're not going to take it out of your wallet.
[00:48:41]  Don't worry.
[00:48:42]  Which means they didn't take it out of everyone's.
[00:48:45]  And that loss was not socialized properly.
[00:48:49]  Yeah.
[00:48:49]  And it's just, it's just sort of absurd.
[00:48:52]  It's like, brother, this is your problem.
[00:48:55]  But I guess their whole saying, they're saying like it'll collapse if everyone doesn't get a haircut because they need the Bitcoin.
[00:49:00]  They need the money here.
[00:49:02]  It just, it seems a little ridiculous to me because when I go in to get a haircut, the worst thing that possibly happens to me is I come out looking like a lesbian.
[00:49:09]  I don't look, it's not like someone takes like, because if you have like, all right, say I have a thousand dollars in Bitcoin in my account, they take 36% out.
[00:49:17]  You know, okay, that's, you know, it's a, you know, relatively a decent chunk of change for me, but, you know, not the end of the world.
[00:49:24]  I have a hundred thousand dollars in Bitcoin in my account.
[00:49:27]  They're taking quite a substantial sum out.
[00:49:29]  Yeah.
[00:49:30]  And then what they did was they were like, don't worry, we're going to pay you back.
[00:49:34]  Here's a token.
[00:49:36]  Okay.
[00:49:36]  And we promise we're going to make you whole.
[00:49:38]  Okay.
[00:49:39]  So they give you a token.
[00:49:40]  Is the token worth anything?
[00:49:42]  Well, they say, you know, they say the token is like one to one.
[00:49:45]  So, you know, we're going to slowly repay you, blah, I think they did make people whole that held.
[00:49:52]  Eventually they did.
[00:49:54]  But yeah, that's a lot of trust in the system, my friend.
[00:49:57]  So they also, if I'm recalling correctly, offered people equity like immediately instead of the token right there, which is a great way of shutting up any sort of detractor because now why would they, why would they, you know, pillory this company that they now have equity in?
[00:50:14]  So it's kind of a genius move.
[00:50:15]  That's also why I think the hack was fake or I mean, as an inside job rather, because now you've basically inured yourself for the most part from criticism from a lot of people because now they're, you know, they have equity in the company and they like they're invested in the company doing well, literally.
[00:50:34]  And yeah, so it's a lot of shady business going on there.
[00:50:38]  And frankly, not a great look for an exchange to lose so much money and then take it out of everybody's account.
[00:50:44]  No, and like, it's true.
[00:50:46]  Like people were getting, people were like, okay, we don't have confidence in this in their like wallet, in their exchange.
[00:50:51]  Like the big thing about crypto that everyone is always worried about is someone stealing is, you know, security, right?
[00:50:57]  Is getting your wallet stolen, holding Bitcoin and it not being secure.
[00:51:00]  It's all fucking digital.
[00:51:02]  And it could just all go poof.
[00:51:04]  And so they say they like have this like blog post and they're addressing all this like, you know, stuff in the public.
[00:51:10]  And they say, okay, we're going to hire this firm.
[00:51:13]  They're a blockchain blockchain forensic firm and they're going to do a bunch of audits.
[00:51:19]  So don't worry, you know, you can, you know, have full confidence that we have all the money and everything's backed and blah, And then it comes out later that like, you know, the firm that they hire, it isn't even capable of doing the audit that they needed them to do.
[00:51:35]  Yes.
[00:51:36]  It's the whole thing is a joke.
[00:51:37]  And to be honest, like at this point, the last known audit of Tether, meaning like, you know, do they have money?
[00:51:46]  Are they like legit?
[00:51:48]  Is this thing for real?
[00:51:50]  Was at that point in September 2017, this company, Friedman LLP, which is actually a legit company.
[00:51:59]  They came out and they said that there was a four, they're, that they had $400 million on deposit.
[00:52:04]  Yeah.
[00:52:05]  Now, this is, this is not an audit.
[00:52:09]  They don't do an audit and they're very upfront about that.
[00:52:12]  Yeah.
[00:52:12]  They say, we're not doing an audit.
[00:52:14]  We're doing an attestation, which is basically like, we're going to write a memo that says, we took a snapshot, snapshot of your checking account.
[00:52:24]  We saw there was money in there.
[00:52:25]  We didn't do like a full forensic, you know, financial forensic where they're looking at all the deposits.
[00:52:29]  They're checking everything, blah, They're not crunching the numbers.
[00:52:32]  They're like lightly patting them.
[00:52:34]  Yes.
[00:52:34]  They're just, they're literally just taking like an iPhone screenshot of your app, your banking app, and then saying, we attest that we took this screenshot at this time and we saw this.
[00:52:47]  And now, if you ever cross me, I have the screenshot of you saying something was retarded in 2012.
[00:52:53]  Well, no, but okay.
[00:52:55]  So when I say they took a screenshot, I like literally mean that because what we find out later is that what this is what Tether fucking did.
[00:53:04]  They were like, oh, so Friedman is going to take a screenshot of our accounting, our accounts at 8 p.m.
[00:53:13]  So 8 a.m. that day, they open an account at a bank.
[00:53:19]  Well, it's not a bank, but let's just call it a bank for these purposes.
[00:53:24]  At their not bank, but like shadowy financial spot.
[00:53:29]  They open an account.
[00:53:31]  They transfer money in at 8 a.m.
[00:53:35]  Friedman LLP comes along and says, oh, look, there's a bunch of money in the account.
[00:53:41]  We attest that it's there.
[00:53:43]  Thank you, snapshot.
[00:53:44]  It's all back, baby.
[00:53:45]  It's all back.
[00:53:46]  400 million right there.
[00:53:47]  Okay.
[00:53:48]  And then Tether says, great, donezo, and transfers the money out of the account.
[00:53:54]  That is such a fucking baller move that how can you hate on that?
[00:53:58]  It's literally what happened.
[00:54:00]  Yeah, yeah, it is actually what happened, same day kind of shit.
[00:54:03]  It's incredible.
[00:54:04]  Yeah, this is the New York Attorney General.
[00:54:06]  No one reviewing Tether's representations would have reasonably understood that the $382 million listed as cash reserves for Tethers had only been placed in Tether's account as of the very morning that Friedman LLC verified the bank balance.
[00:54:22]  I mean, this is, as somebody who has played around much to his, what's the opposite of benefit?
[00:54:32]  Like loss?
[00:54:34]  Sure.
[00:54:34]  Sorrow, pain, trouble.
[00:54:36]  Much to his trouble.
[00:54:38]  Chagrin.
[00:54:39]  Yes.
[00:54:40]  Well, chagrin of myself and others affected.
[00:54:43]  Playing around with bank stuff is very tricky and kind of hard to get right.
[00:54:46]  And they got it right in this one instant.
[00:54:48]  I mean, didn't get it right, but it worked out in this one instance, but not for very long.
[00:54:52]  They ran into some pretty difficult banking troubles around this time.
[00:54:56]  Yeah, they basically could not get a bank.
[00:54:59]  Yeah.

=== Difficulties with Banking (09:55) ===

[00:55:00]  Wells Fargo, and this is a huge problem with crypto.
[00:55:04]  Wells Fargo dropped them and Bitfinex couldn't be, they couldn't find any like traditional TradFi banking institution.
[00:55:14]  Do they really fucking call it TradFi Liz?
[00:55:16]  Dude, it's called TradFi, yeah.
[00:55:18]  They fucking call it TradFi.
[00:55:20]  TradFi.
[00:55:21]  TradFi and DeFi.
[00:55:23]  Young Chomsky, can you a little throwback here?
[00:55:26]  Can you bring in the brace sound?
[00:55:29]  TradFi is when you give your bitch a penny farthing or a two pence to go buy a fucking lolly or one of the women used to eat.
[00:55:37]  God damn it.
[00:55:38]  I'm far.
[00:55:38]  All right.
[00:55:39]  All right.
[00:55:39]  No, no, I'm not going to have a panic attack on the fucking podcast.
[00:55:42]  When you give your bitch a penny farthing, that's a bicycle.
[00:55:45]  When you give your bitch a halfpenny and you're like, go read, go read, can you read at this point?
[00:55:54]  When do women learn to read?
[00:55:57]  Go read the book of Genesis, bitch.
[00:56:02]  What?
[00:56:05]  This is like Nathan Rodney has been breaking bad on Trad Side.
[00:56:10]  By the way, we will be having Nathan J. Robinson on the show later today to talk about traditional finance, new finance, and the state of finance today.
[00:56:21]  Okay, so no, this is okay.
[00:56:23]  Back to the show.
[00:56:24]  This is actually a really big problem with crypto.
[00:56:26]  They can't, they get cut out of a lot of traditional banking.
[00:56:30]  And you might be like, well, wait, why does crypto need a bank?
[00:56:33]  It's the whole thing that like they're not like, they're not like your old bank.
[00:56:37]  They're like a cool bank.
[00:56:39]  Yeah.
[00:56:39]  Here's the thing.
[00:56:40]  They have to process customer withdrawals.
[00:56:44]  And so you actually do need a bank for that because it's very difficult to handle that kind of, like it is actually difficult to process dollars to crypto exchanges and making all of those happen seamlessly is very difficult.
[00:57:00]  So yeah, banks can help.
[00:57:01]  The problem is banks don't like crypto because mad illegal shit happens in the crypto markets and they don't want to be associated with that because they actually are governed by a shit ton of regulations, particularly like know your customer ones as well.
[00:57:15]  And they already know how to get away with the tradfi illegal shit.
[00:57:18]  They don't want to have to get into like the new, they don't have to learn a bunch of new ones.
[00:57:21]  Exactly.
[00:57:22]  They don't got time for that.
[00:57:23]  Everyone's tired.
[00:57:24]  Yeah.
[00:57:24]  As Liz always says, ain't nobody got time for that.
[00:57:30]  So they get cut out.
[00:57:33]  Bitfinex and Tether get cut out of TradFi of banking.
[00:57:38]  At some point, they like, you know, they're trying to move to a couple of different banks.
[00:57:43]  There's like rumors that they're on HSPC.
[00:57:48]  That turns out to not be true.
[00:57:49]  They're, you know, letting customers know that, you know, incoming wires are going to get blocked because the Taiwanese banks are blocking their accounts.
[00:57:58]  So they got to find somewhere to fucking bank.
[00:58:05]  What happens now?
[00:58:07]  Brace, imagine that you are the crypto snake, please.
[00:58:10]  All right.
[00:58:11]  No, I'm, I'm Coindexter.
[00:58:14]  All right, Coindexter.
[00:58:16]  So you are a straight up money laundering crypto company that is.
[00:58:21]  Yes.
[00:58:22]  You're trying to keep it all going.
[00:58:24]  Yes.
[00:58:25]  Must keep the ball rolling.
[00:58:28]  And every single bank in the world has completely shut you out.
[00:58:32]  Those fucking Jews.
[00:58:38]  It's all right for Coindexter to say this.
[00:58:40]  I'm married to a Jewish woman or two.
[00:58:45]  Okay, where do you turn?
[00:58:46]  You turn to shadow banking.
[00:58:50]  Shadow banking.
[00:58:51]  Can we do a funny voice there?
[00:58:52]  Shadow banking.
[00:58:55]  You've heard that term, right?
[00:58:57]  Yes.
[00:58:57]  No, can we be?
[00:58:58]  Can you just be brave?
[00:58:59]  Okay, coin.
[00:59:00]  Yeah, yeah, no, of course.
[00:59:01]  Yeah, yeah, shadow baking.
[00:59:03]  So it's like basically a shadowy group of kind of like intermediary, intermediaries who facilitate a bunch of credit creation.
[00:59:12]  It's, you know, it's out sort of outside TradFi, meaning it's outside of the traditional bank.
[00:59:18]  So there's not a lot of regulatory oversight.
[00:59:21]  A lot of times when people talk about shadow banking, what they mean are like hedge funds.
[00:59:27]  But it's like a kind of a weird like hodgepodge of lenders, brokers, other kinds of people who can kind of lend at any moment.
[00:59:36]  Maybe aren't as you know on the up and ups.
[00:59:39]  Yeah.
[00:59:41]  They're willing to give a dollar to Coin Dexter.
[00:59:45]  Yeah, it's not the kind of place you can just like walk in and be like, hey, Shadow Bank, I need to open a checking account where I'm going to deposit $600 every two weeks.
[00:59:54]  No, no, no.
[00:59:55]  You know someone who knows someone who knows someone.
[00:59:57]  Exactly.
[00:59:58]  So that is what Tether and Bitfinex do.
[01:00:03]  They go to some guys named Crypto Capital Core.
[01:00:07]  All K's.
[01:00:10]  No, it's Crypto Capital Core.
[01:00:12]  Crypto Capital Core is a good time company looking at these guys.
[01:00:19]  It is a you're in the country Panama, listeners.
[01:00:25]  Nothing good happens down there, I got to say.
[01:00:27]  I got to 100% agree with you.
[01:00:30]  Not a lot of papers coming out of there famously.
[01:00:34]  Yes, a lot of papers coming out of Panama.
[01:00:36]  Not a lot of when a foreigner steps foot in Panama, generally the purposes of those footsteps are not ones that will improve the quality of life for the world, let alone Panamanian citizens.
[01:00:50]  It is a type of place that you go to when you want to do something a little bit naughty and maybe a little bit nasty.
[01:00:57]  Coincidentally, Brace Belden's or Rachel Jake's, what was it?
[01:01:02]  Nasty Palace?
[01:01:03]  Rachel Jake's Nasty Palace.
[01:01:08]  Nasty Palace is chartered in Panama.
[01:01:13]  There's this company.
[01:01:14]  I don't even know where to start with these guys.
[01:01:16]  They are founded in Panama, but operate out of Colombia, which is what a beautiful pairing of countries right there.
[01:01:23]  You love to hear that in the same sentence.
[01:01:27]  They are a shadow bank for a ton of exchanges, including like really big ones like Kraken and BitMax.
[01:01:34]  Yeah.
[01:01:34]  BitMEX totally fakeo.
[01:01:36]  I mean, it was big, but also that's you do not want to be, you're doing some dark shit if you're on BitMEX.
[01:01:42]  Well, so Tether Bitfinex's connection at Crypto Capital Core was a guy named Reggie Fowler, who is a former NFL lineman and part owner of the Minnesota Vikings, who also tried to start the Alliance of American Football, which was going to be like another football league.
[01:02:01]  This guy's a real character.
[01:02:03]  Great guy.
[01:02:04]  He was all up in fucking starting this.
[01:02:07]  He was one of the main investors.
[01:02:08]  And then a week into it, he pulled all his money.
[01:02:09]  And so they had to end the season early.
[01:02:11]  Oh, my God.
[01:02:12]  Exactly.
[01:02:13]  So he, you know, real estate guy, classic fucking scam artist who would get really big into this sort of stuff, big into crypto.
[01:02:22]  So he was the connection between Crypto Capital Core and Tether Bitfinex.
[01:02:26]  The other owners, though, of Bitfinex, excuse me, of Crypto Capital Core are interesting too.
[01:02:32]  We have Ravid and Oz Yusuf, who are an Israeli brother and sister.
[01:02:39]  Coindexter likes the sound of that.
[01:02:43]  And a guy named Manuel.
[01:02:45]  I don't, I mean, you know what?
[01:02:47]  I'm going to call him Manuel.
[01:02:48]  Manuel Molina Lee.
[01:02:51]  Let me tell you, the cuts were not far from these people within the next couple of years.
[01:02:57]  I think every single person I just mentioned has been arrested.
[01:03:00]  It's unclear, I think, if Ravid has been arrested.
[01:03:04]  No, I think she has, or I think maybe Oz has, but he was setting up shell companies up until like the day he got busted.
[01:03:17]  You know what?
[01:03:18]  Play, you know, fucking, I don't even know.
[01:03:21]  I was going to say like a pithy one-liner about that, but I got nothing.
[01:03:26]  Good job.
[01:03:28]  Manuel was recently, he was arrested in Greece and then extradited to Poland on straight up money laundering charges.
[01:03:38]  Apparently, and I swear to God, you guys, this is true.
[01:03:42]  He was laundering money through Bitfinex for the Colombian cartels.
[01:03:47]  Yes, that is a big shadow looming over this shadow bank is the fact that it's very likely they were extremely tied into the Colombian cartels.
[01:03:58]  Yeah, so to let me just, let's pause for a second to, you know, remind listeners what we're talking about.
[01:04:04]  This is the company that Tether, which is responsible for what, $65 billion in liquidity in the crypto markets, billion dollars.
[01:04:16]  Their processor, their bank, was laundering money through their exchange for the cartels.
[01:04:24]  These are the people they're working with.
[01:04:26]  Okay.
[01:04:27]  This is actually something I've been thinking about a lot since we've been sort of working on this episode is that, you know, obviously we've talked a lot about on the show about how various criminal organizations, intelligence agencies, to mafias to what have you, you know, often rely on these sort of sometimes very lengthy and intensive campaign, you know, campaigns, but like money-making schemes, you know, selling heroin, selling crack, running guns, all that.

=== Manipulating Bitcoin Prices (15:16) ===

[01:04:55]  Shoring up dark money to pay for more shit that they got to get make more money to pay for, yeah, absolutely.
[01:05:01]  Yeah, the hidden economy.
[01:05:03]  But I will say it seems like Bitcoin and the sort of the crypto market has would really be a like surefire way to add a lot of money very quickly to any of these groups.
[01:05:17]  Yes.
[01:05:17]  Right.
[01:05:18]  Like they would be stupid not to be totally involved in this in the way that the cartels were involved with, you know, Crypto Capital Corps or even further.
[01:05:27]  Like fucking just CIA should just start an exchange.
[01:05:31]  Well, yeah, I think that they probably have.
[01:05:34]  Yeah.
[01:05:35]  And for the record, like nobody does know who Satoshi is.
[01:05:39]  Yeah.
[01:05:40]  You know, like it's this stuff is super fucking opaque.
[01:05:44]  So a lot of it you can only make a lot of guesswork at, but like, you know, it obviously begs the question.
[01:05:49]  And hacks too, you know, like even staging hacks and all this stuff is a, it's, I don't know, it just seems like so juicy and opportunity.
[01:05:56]  Well, it's so funny because it's like all these guys are like, we wanted to create this thing outside of traditional world.
[01:06:02]  It's like, yeah, that's for criminal activity.
[01:06:04]  You wanted to do illegal stuff.
[01:06:06]  That's why you created an entire illegal financial market to do illegal shit.
[01:06:13]  100%.
[01:06:14]  I don't know.
[01:06:15]  I mean, it is, it's really crazy too.
[01:06:17]  I was just talking about this the other night and I was saying like there's this for people who don't know about crypto, you know, and don't really follow it, maybe hear stuff here and there.
[01:06:26]  And, you know, and I think from at least from what you hear, and, you know, I know a little bit more about this stuff than I think, you know, even just like normal passerbys or whatever, but I still don't fully understand it.
[01:06:40]  And this stuff is just, you just go to a website.
[01:06:43]  Like, this isn't like you have to access the dark web.
[01:06:45]  Oh, you have to use a VPN.
[01:06:47]  You don't really have to.
[01:06:48]  Oh, you have to download Tor.
[01:06:50]  It's not like it, you know, there aren't all these hoops to go through.
[01:06:53]  There's a little bit, but there's plenty of fucking YouTube tutorials.
[01:06:57]  And, you know, you can easily learn as many, you know, older fellas and ladies are and people who you think that, you know, it's not just like, you know, I don't know, zoomers and crazy people or whatever.
[01:07:12]  But my point being, like, this stuff just exists.
[01:07:14]  Like you could just walk right into it.
[01:07:17]  Yeah, 100%.
[01:07:18]  And I want to be clear too, like, any listeners out there who are making a little butt of money off of this stuff.
[01:07:23]  I'm not like, I'm not looking at your pockets, brother.
[01:07:27]  You know, like I'm not saying, I'm not slapping the bag out of your hand.
[01:07:30]  I'm just saying that this stuff, it's a gamble, you know, and people treat it like it's something much more than a gamble when it's a gamble and you can make a lot of money gambling.
[01:07:40]  Yeah.
[01:07:40]  You can also lose a shit ton of money.
[01:07:43]  That's actually like a really like anti-Semitic thing to say of you right now in my company.
[01:07:52]  Very sad.
[01:07:52]  You can lose a lot of money gambling.
[01:07:54]  Yeah.
[01:07:54]  And there's a lot.
[01:07:55]  And also casinos are basically criminal institutions that should be fucking raised to the ground.
[01:08:01]  And so just saying with this stuff, too.
[01:08:04]  But the other thing that I think a lot of people think about crypto, and I myself believed this for a while, was that, okay, yeah, we all know it's all, it's all a scam.
[01:08:14]  It's all crazy.
[01:08:15]  It's all pump and dump, whatever.
[01:08:16]  But Bitcoin is pretty legit.
[01:08:19]  No, that's not the case.
[01:08:21]  That is not the case.
[01:08:22]  And we're going to talk about why that's not the case and Tether's role in that in just a second.
[01:08:27]  But part of that reason why it's not the case is this fucking stuff with Manuel Molina Lee funneling Columbia cartel money to pump the price of Bitcoin.
[01:08:39]  Yes.
[01:08:40]  That's the thing is that like Tether and Bitfinex had a huge hand in like manipulating essentially the prices of Bitcoin here.
[01:08:46]  Yes, absolutely.
[01:08:47]  Because Tether provides, you know, again, I'll kind of, we'll, we'll lay this out, but Tether provides almost nearly, nearly the, nearly all of the liquidity for Bitcoin and for the Bitcoin market.
[01:09:01]  And that means that for a good chunk of time, the cartels were providing nearly all the liquidity for the Bitcoin market, which is fucking nuts.
[01:09:10]  That's what's so wild about this to me is that like, it's, it's, it's funny because I, I, I always think of myself as like the really dim-witted on a lot of like finance stuff, a lot of Bitcoin stuff.
[01:09:23]  And I realized that like, I actually am a genius.
[01:09:26]  Like my original take on this when I heard about it, I'm like, this is solely for money laundering and drug trafficking and like asset betting.
[01:09:34]  And that it looks to be correct.
[01:09:38]  Yes.
[01:09:39]  Yeah, yeah, yeah.
[01:09:40]  I think you psych yourself out.
[01:09:41]  We were talking about that.
[01:09:42]  It's like you psych yourself out because you're like, it can't be this simple.
[01:09:44]  It can't just be a fucking Ponzi scheme.
[01:09:47]  And it's like, no, it is a, it is a fucking Ponzi scheme.
[01:09:50]  It's actually just probably the biggest Ponzi scheme in the world ever.
[01:09:53]  No, Albanian one was.
[01:09:54]  Albanian one was.
[01:09:55]  Took down the whole country.
[01:09:57]  But that's relative.
[01:09:58]  I mean, that was, they only had about $30,000.
[01:10:14]  Okay, back to our friend Reggie.
[01:10:15]  So April 2019, the feds bust Reggie.
[01:10:19]  No!
[01:10:20]  Reggie was Reggie, I think, actually had literal counterfeit money plates.
[01:10:25]  Like, to make counterfeit money, he had actual fake money and then tools for making fake money on him.
[01:10:33]  I like it.
[01:10:33]  A ton of fake bond certificates.
[01:10:35]  Yeah, I do kind of feel for Reggie.
[01:10:37]  But he also, sadly enough, had a master ledger with like meticulous records showing this, like in his little workbook, how Crypto Capital embezzled all the money that was flowing through them.
[01:10:50]  So he was like faking bonds in order to secure loans to cook the books as proof to the U.S. banks to open up checking accounts.
[01:11:00]  And they funneled like hundreds of millions like through those accounts.
[01:11:04]  So a majority of that money was for digital currency firms, like basically looking to sidestep money laundering laws.
[01:11:12]  And Molina Lee, of course, gets arrested.
[01:11:16]  He gets arrested in Poland, right?
[01:11:18]  He gets arrested in Greece, then extradited to Poland.
[01:11:20]  It is this crazy like Inner Pole case that was like, yeah, multiple countries.
[01:11:27]  It causes them to basically seize a ton of assets, freeze accounts.
[01:11:34]  Hundreds of millions of dollars.
[01:11:36]  Yeah, Bitfinex.
[01:11:38]  GDP.
[01:11:38]  Yeah, yeah, yeah.
[01:11:39]  Bitfinex and Tether, I want to be clear.
[01:11:42]  They gave Reggie and Molina and our good friends, the Israeli brother and sister, they gave this company over a billion dollars, like both corporate funds, but also client funds.
[01:11:57]  Yes.
[01:11:57]  So they're actually giving customer deposits like to this fucking criminal enterprise.
[01:12:03]  And at some point, Crypto Capital just like stops returning their phone calls and stops giving money back to them.
[01:12:11]  Frankly, if you're all in prison, it's difficult.
[01:12:13]  You get like, you don't get like a ton of calls there.
[01:12:15]  So like, I'm not about to call fucking Phil Potter or like his fake ass Dutch friend, you know?
[01:12:21]  Yeah.
[01:12:22]  And mid in like mid-2018, Bitfinex was like sending increasingly crazed messages to crypto capital being like, can you please process payments?
[01:12:31]  And they're like not here.
[01:12:32]  They're literally left on red, like not hearing anything.
[01:12:37]  Please, can you unblock me?
[01:12:38]  Like, please, can you unblock me?
[01:12:40]  Like, I just want to talk.
[01:12:41]  I'm so sorry for what I said to you and what I sent to you.
[01:12:44]  Please unblock me.
[01:12:46]  Yeah.
[01:12:46]  Bitfinex has to then dip into Tether's accounts for $625 million in order to meet redemptions because Crypto Capital has basically stolen all their money.
[01:13:00]  It's crazy.
[01:13:01]  Let's talk about Tether a little bit because in by 2017, they have issued $1.4 billion in USDT.
[01:13:11]  Yes.
[01:13:12]  So this is what blows my fucking mind is they are basically just printing up fake digital money that they say has again, I know I know I'm reiterating this, but I've had to reiterate this to myself several times while reading about this.
[01:13:25]  They're saying, here's your little fucking World of Warcraft GP.
[01:13:29]  This is actually, we have real money in the bank to back this up, but they're just printing more and more and more and more.
[01:13:35]  And the thing is, when they print this, people are using this to buy Bitcoin.
[01:13:40]  But something funny happens.
[01:13:42]  So they actually, when they would pause printing, Bitcoin tanks.
[01:13:49]  Then suddenly Tether printing starts back up again.
[01:13:53]  And what happens to the price of Bitcoin?
[01:13:57]  It pops back up.
[01:13:58]  And it's for that reason that you're saying they're printing Tether.
[01:14:01]  What are people doing with Tether?
[01:14:03]  They're buying Bitcoin.
[01:14:04]  Therefore, the price of Bitcoin starts going back up.
[01:14:07]  I mean, it's crazy.
[01:14:08]  You can like track all of this and see where Tether issuances happen and Bitcoin price jumps happen.
[01:14:16]  It's fucking shocking.
[01:14:18]  And like you mentioned, none of this is backed.
[01:14:22]  Yeah, none of this is backed.
[01:14:24]  This is, there's funny money in the bank.
[01:14:25]  They're lying to everybody.
[01:14:26]  They're saying they got the money and they don't got the fucking money.
[01:14:29]  Yeah.
[01:14:29]  And so you might be asking like, wait, okay, stablecoin, you're printing 2.5 billion at this point.
[01:14:35]  Did they ever figure out, you know, how to get a fucking bank?
[01:14:39]  Did they, when they got out of from crypto capitals?
[01:14:43]  Yeah.
[01:14:43]  Are you guys still in bank?
[01:14:44]  Like, what's happening here?
[01:14:46]  Yeah.
[01:14:47]  Okay.
[01:14:47]  So remember when they opened that account that they had to move the money into in order to get the attestation that said that they were fully backed, but it was totally fake?
[01:14:57]  When they moved the Bitfinex money into the Tether account so they could take the snapshot.
[01:15:01]  Yes.
[01:15:01]  Yes.
[01:15:02]  They did that at a place called Noble Bank.
[01:15:05]  Well, Noble Bank, yet another really pleasantly and positive sounding company.
[01:15:12]  Yeah.
[01:15:12]  So Noble Bank, which by the way, is not a bank.
[01:15:15]  It is a consortium of financial lenders and things.
[01:15:22]  Anyway, Noble Bank is actually co-founded by Brock Pierce.
[01:15:26]  Coindexter knows this well.
[01:15:30]  So Brock Pierce, the guy who started RealCoin, which by the way, then changed its name to Tether.
[01:15:38]  Brock Pierce starts a quote unquote bank that is providing Bitfinex and Tether with quote unquote banking services like since about 2017.
[01:15:51]  So those of you who maybe haven't listened to all of our earliest work, we did do an episode on Brock Pierce.
[01:15:57]  And one of, there's a few notable things about Brock Pierce.
[01:16:00]  Is his alleged activities as a younger man in Hollywood with a man named Mark Collins Rector and maybe some teenage boys and the gay mafia and et cetera, et cetera, et cetera.
[01:16:12]  Of course, his associations with Jeffrey Epstein and his weird stuff in Spain.
[01:16:17]  And anyways, one of the things that he did was he, just like Steve Bannon, had a company that bought and sold items on World of Warcraft, which occurs to me that too was probably a way for people to launder money.
[01:16:31]  Absolutely.
[01:16:32]  A hundred percent.
[01:16:33]  And probably porn.
[01:16:34]  That also like sort of you know casts another light on Bannon and several other kind of notable sickos doing this kind of stuff.
[01:16:41]  Uh, also all coincidentally connected to Jeffrey Epstein.
[01:16:45]  Um, but Pierce has reinvented himself, although I'm not sure.
[01:16:49]  I mean, I guess child actor turned a child.
[01:16:52]  And then now he is a hat-wearing Bitcoin god who has a DeLorean with the license plate reading Satoshi and moved to Puerto Rico, tried to make it like a crypto capital.
[01:17:05]  And I believe that is where Noble Bank is located.
[01:17:10]  Yeah.
[01:17:10]  Well, in 2018, coincidentally, actually, also the same year that a very like kind of a puff piece on Brock Pierce comes out in Rolling Stone, Noble Bank goes up for sale.
[01:17:24]  And there's rumors at the time that because their own U.S. bank, which is Bank of New York Mellon, basically told them, oh, you are a fake crypto bank doing illegal shit.
[01:17:35]  You cannot, we can't work with you anymore if you continue to work with Tether at Bitfinex.
[01:17:40]  I hate when people say that to me.
[01:17:41]  Yeah, I get that.
[01:17:42]  So Noble goes up for sale just as the same time that a story comes out in the papers that Bitfinex is banking under a shell company named Global Trading Solutions, right?
[01:17:57]  They're like, don't worry, Global Trading Solutions, they've set up a real bank account.
[01:18:01]  They're totally banked.
[01:18:02]  You don't have to worry about Bitfinex.
[01:18:05]  Here's the thing: Global Trading Solutions is a fake company, a shell company started by Reggie Fowler.
[01:18:12]  That's right, baby.
[01:18:14]  So this is just, my whole thing is, don't you guys know any other dudes?
[01:18:19]  They don't know anybody else.
[01:18:20]  You got to keep the circle tight, I guess.
[01:18:23]  I keep my circle so loose that people talk about it in a really uncool, uncouth way.
[01:18:30]  Well, four days after the story comes out about Nope Bank and Bitfinex, Bitfinex suspended all cash deposits.
[01:18:38]  All right.
[01:18:39]  Things are going well.
[01:18:40]  And it turns out that the DOJ froze all their accounts and literally no one can get any money.
[01:18:46]  The feds opened up a huge case against Bitfinex, which, you know, thank God.
[01:18:51]  Although apparently it's like a much wider probe.
[01:18:53]  I don't know.
[01:18:54]  They're looking into whether or not Bitcoin boom that happened was like before there was kind of a big bust.
[01:18:59]  I think they called it like crypto winter, which is so fucking stupid.
[01:19:03]  I'm sorry.
[01:19:04]  Crypto winter is just late fall.
[01:19:08]  Anyway, they're trying to look into see if it was because of manipulation.
[01:19:12]  Seems very clear that it was with traders driving up the price of tethers.
[01:19:16]  Here's some Bloomberg reporting from the time.
[01:19:19]  They've recently honed in on suspicions that a tangled web involving Bitcoin, Tether, and crypto exchange Bitfinex might have been used to illegally move prices.
[01:19:30]  Bitfinex has the same management team as Tether.
[01:19:33]  Remember, again, no one knew that until it was leaked in the fucking Paradise Papers.
[01:19:38]  Yes, yes, yeah, yeah.
[01:19:39]  This was not supposed to be known.
[01:19:41]  When new coins come to market, they're mostly released on Bitfinex.
[01:19:44]  Some traders, as well as academics, have alleged that these tethers are used to buy Bitcoin at crucial moments when the value of the more ubiquitous digital token dips.
[01:19:54]  So in April of that year, the New York State Attorney General, again, Letitia James, she files her case against Bitfinex and Tether.
[01:20:04]  And this is basically what they allege: that Bitfinex siphoned $700 million off of Tether, which means the tethers aren't backed.

=== Bitfinex And Tether's Strategy (15:18) ===

[01:20:12]  Since 2014, Bitfinex sent $1 billion to Crypto Capital Corp accounts, who is currently under investigation for money laundering.
[01:20:23]  Bitfinex set up a shit ton of shell companies, both companies owned by Bitfinex Tether executives, as well as what they call friends of Bitfinex, which I assume is Reggie Fowler and Manuel Molina Lee.
[01:20:37]  Basically, that they were playing a huge like cat and mouse game with global banks.
[01:20:42]  By 2018, Bitfinex customers complaining that they can't get their money out of the exchanges, and that's because Crypto Capital, which held almost all of Bitfinex's funds, couldn't process any of the customer requests, right?
[01:20:54]  That's because they stopped responding to Bitfinex calling them, which is, they say, because 850 million had been seized by Portuguese, Polish, and United States authorities in the global money laundering case involving the Colombian cartels.
[01:21:10]  Very cool.
[01:21:12]  Here's the thing: Bitfinex says it doesn't believe crypto capital and that crypto capital still has the money.
[01:21:17]  I don't understand what they mean by that because does that mean the Portuguese and Polish governments are lying?
[01:21:24]  Well, basically, they say they don't think the Portuguese and the Polish governments took it.
[01:21:28]  Oh, okay.
[01:21:29]  But are the Portuguese and Polish governments are saying that they took it?
[01:21:31]  And they're like, you guys are.
[01:21:33]  I don't know.
[01:21:34]  It sounds like everyone is like pointing fingers because they don't want to hold the bag.
[01:21:37]  That's what it sounds like.
[01:21:38]  Yeah, yeah, yeah.
[01:21:39]  So basically what Bitfinex did was, and Matt Levine put this really well, but he, you know, they took $625 million of real money at a real bank from Tether and in exchange gave Tether back $625 million in fake money at a fake bank.
[01:21:59]  Wait, you can just give someone fake money for real money?
[01:22:02]  No, you can't.
[01:22:03]  That's fraud.
[01:22:04]  That's Ponzi.
[01:22:05]  Okay, yeah.
[01:22:05]  All right.
[01:22:05]  All right.
[01:22:06]  Cause I got really hyped up for it.
[01:22:07]  I had a lot of ideas.
[01:22:09]  Coin Dexter.
[01:22:11]  Yeah.
[01:22:12]  No, like essentially, Bitfinex is trying to create money by doing one-for-one transfer from Tether's like bank for funds that just don't exist at Crypto Capital.
[01:22:23]  Yeah.
[01:22:24]  And like this, you can't do that.
[01:22:26]  You know what I mean?
[01:22:27]  Like you can't do that at all.
[01:22:28]  And so what Bitfinex does do and Tether does is they like cooked the books and changed the ledger and say, oh, no, it was a loan.
[01:22:36]  We were giving them a loan and we're also owned by the same people.
[01:22:39]  And this is the only time they've acknowledged it.
[01:22:42]  But here's what they do.
[01:22:43]  They have the same executives.
[01:22:44]  Their loan agreement is signed by the two same people.
[01:22:48]  They're just signing both sides of the agreement.
[01:22:50]  You can do this?
[01:22:51]  No.
[01:22:52]  This is all not okay.
[01:22:54]  You can't do this.
[01:22:55]  Sorry.
[01:22:55]  You keep getting really excited and then you bring it down.
[01:22:58]  I really don't like when you do that.
[01:23:00]  It makes me really, really crazy, Liz.
[01:23:04]  so cool it here's the thing This stuff is crazy.
[01:23:23]  This is all fakeo.
[01:23:25]  You can't do this.
[01:23:26]  This is against the rules.
[01:23:27]  This is against the rules.
[01:23:28]  Yeah.
[01:23:29]  Yeah.
[01:23:29]  Which normally is very cool.
[01:23:31]  In this instance, not cool.
[01:23:33]  Well, it just seems like a big fucking scam.
[01:23:36]  And what I don't understand is it seems like an open scam.
[01:23:39]  Like you take, look at this stuff for two minutes.
[01:23:42]  You're like, oh, yeah, this is a fucking, just a criminal enterprise.
[01:23:45]  Yeah.
[01:23:46]  And like, that's what's weird to me is that everyone kind of acknowledges that Tether is fake and that Tether is pumping Bitcoin.
[01:23:56]  Because you would think that after you make it, you know, you have a case with the AG, oh, you've, you know, been in the news saying that you can't, you know, cover all of this stuff that you would like quiet down and maybe like go out of business and maybe be a little embarrassed.
[01:24:10]  No.
[01:24:11]  No.
[01:24:12]  They just keep going.
[01:24:13]  Like Tether just keeps fucking printing from January 1st, 2020 to January 1st, 2021.
[01:24:20]  It the value of Tethers in circulation went from 4 billion to 21 billion.
[01:24:27]  Now, remember, I said at the beginning of this, tethers are now 65 billion market cap.
[01:24:32]  Yes.
[01:24:32]  That's how much it's increased in the last year.
[01:24:36]  And Bitcoin at the same time, what do you think it's doing as tethers are printing?
[01:24:40]  Going up.
[01:24:41]  Of course, it's going up.
[01:24:43]  And so it's, there's a real question of whether or not Bitcoin could have even reached 35K in 2020 without Tether pumping it.
[01:24:53]  Because 80% of Bitcoin inflows got purchased from Tether.
[01:24:58]  I mean, that's a huge amount.
[01:25:00]  Like.
[01:25:01]  Yeah, it's fucking crazy.
[01:25:02]  It's that's, I mean, almost all of there's this guy who did like, was really looking into it and taking snapshots of where all this stuff was coming from.
[01:25:11]  Because again, this stuff isn't regulated.
[01:25:14]  And a lot of the journalists covering it aren't doing this kind of work.
[01:25:19]  They're covering the press releases.
[01:25:20]  They're covering, you know, maybe some of the market movement, but not like looking at fucking inflows and seeing where it's going.
[01:25:30]  And it's almost all being pumped by Tether.
[01:25:34]  Well, I mean, to me, as your average bro coiner, I would say that this is a good thing, right?
[01:25:42]  I want Bitcoin to go up forever.
[01:25:43]  This is never going to stop.
[01:25:45]  But that's not how things work.
[01:25:47]  What goes up must come down.
[01:25:50]  I mean, it just, it will not go up forever.
[01:25:52]  They can't.
[01:25:53]  I want to be clear about something.
[01:25:55]  We're going to the moon and the moon has been up basically since the start of the earth.
[01:26:00]  Well, so they finally, I mean, they have to make a big settlement with the AG of New York.
[01:26:04]  And some of that is like a fine.
[01:26:06]  They also have promised to never do business in New York, whatever that means.
[01:26:09]  I mean, the whole thing really seemed like a slap on the wrist.
[01:26:14]  Remind me a lot of, you know, when we covered Elon getting hit by the SEC for fraud.
[01:26:19]  Absolutely.
[01:26:20]  Like these fines are totally within the realm of like acceptable losses, like very acceptable loss.
[01:26:27]  I don't think any of them were over $20 million.
[01:26:29]  Yeah, it's like whatever.
[01:26:30]  One of the things that they do have to do, however, as part of the settlement is they have to publish quarterly reports on all the assets that hold, that they hold that are backing the tethers.
[01:26:42]  And so you can look at some of these and a lot of people have, and they're pretty interesting.
[01:26:48]  So in March 2021, there's about 40.7 billion of USDT, again, that's Tether, in circulation.
[01:26:56]  They say 76% of that is backed by cash or cash equivalents.
[01:27:00]  So they're not even now claiming to back all of it, which is very funny.
[01:27:05]  Yeah, they're just saying most of it's backed.
[01:27:08]  Yeah, but what's weird is that only 3% of that cash that they call cash is actually cash.
[01:27:15]  So it's mostly equivalents.
[01:27:17]  What is a cash equivalent?
[01:27:20]  So a cash equivalent, again, remember my tranche, my bag of rare gems and other cash equivalents.
[01:27:27]  Yeah.
[01:27:28]  So it's like a mix of treasury bills, fiduciary deposits, a little bit of reverse repo, you know it's it's.
[01:27:37]  I'm sorry if, if you're telling me I have a dollar, if I if, if you give me a casino token for a dollar and then after you give it to me, like actually this is backed by a reverse repo, I am gonna make Steven Paddock look like Barney the freaking Dinosaur.
[01:27:53]  That is ridiculous.
[01:27:55]  Well, it's not as ridiculous as the rest of their cash equivalents, which is about like 20 billion we're talking about, which is held in what's called commercial paper, commercial paper.
[01:28:07]  We've talked about commercial paper before, a long time ago, I think, with Alex Skaggs, but uh, commercial paper is basically a common form of unsecured, like short-term debt that a company issues, so like when they're it's like one company will will like lend out money to another company.
[01:28:24]  Uh, in the money market.
[01:28:26]  You know there's capital markets in the money markets and it's in the money markets and you know it's like I think it's like 270, 260 days um, before the you know before it's due, and you know it's like for meeting payroll or like small little projects or whatever, and it's just an easy way for companies to like get financing um, because you don't have to like, apply for a loan.
[01:28:49]  It's not this whole thing, it's just a quick thing yeah, um.
[01:28:54]  So what's weird?
[01:28:55]  Is that?
[01:28:56]  Okay, so this?
[01:28:57]  I just have to read this from the FT because I still cannot make sense of this.
[01:29:01]  Disclosures from cryptocurrency provider Tether suggested has become the one of The world's largest investors in the?
[01:29:09]  U.s commercial paper market, rubbing shoulders with the likes of fund managers Vanguard and Blackrock okay, and dwarfing the investments of tech giants like Google and Apple.
[01:29:21]  According to estimates from JP Morgan, Tether claims to have just under 30 billion in commercial paper short dated investments in looted cash.
[01:29:29]  Such holdings of companies short-term debt would make it the seventh largest in the world.
[01:29:35]  That seems a little ridiculous to me, because wasn't wasn't one of the points of the episode that we we did with Skaggs about this?
[01:29:41]  I feel, like a million years ago that like, Apple and Google were getting involved in the in the yeah, in the commercial paper market market.
[01:29:48]  Yeah, that was like kind of a big deal.
[01:29:50]  But these guys dwarf yes, Apple and Google's investment in the market or, like you know their, their reach in the market.
[01:29:57]  Yes, this ponzi scheme is up there with BlackRock in terms of the financing that they're holding for literally how companies like do business.
[01:30:09]  Jesus Christ.
[01:30:10]  And what's even weirder about this is that no one in the commercial paper market has ever worked with them.
[01:30:18]  So that is the strangest part of this, I guess I would say.
[01:30:21]  Yeah.
[01:30:22]  Yeah, this makes no sense.
[01:30:23]  This is from the FT.
[01:30:25]  Until last week, we hadn't really heard of them, said a trader at a large bank.
[01:30:29]  It was news to us.
[01:30:31]  JP Morgan's analyst said the large commercial paper holding may suggest that Tether is struggling to find a bank willing to take its cash as deposit.
[01:30:39]  Well, we know that's true.
[01:30:40]  The U.S. Office of Comptroller of Currency has released guidance saying that banks can take deposits from stablecoin issuers only if the coins are fully backed by reserves.
[01:30:50]  Yes, which is very apparent that probably none of them are.
[01:30:53]  By the way, none of the other stablecoins have ever had a full audit either.
[01:30:57]  No, of course not.
[01:30:58]  None of this is regulated.
[01:30:59]  None of this.
[01:31:00]  So the seventh largest holder of commercial paper hasn't ever been heard of by players in the market ever.
[01:31:10]  Everything about this is so strange.
[01:31:12]  It's this like complex web of just almost like surface level deception and moving pieces around on this little chessboard here.
[01:31:23]  And it's like, it seems to me ridiculous that this can, that they think this can last forever.
[01:31:28]  And I doubt they actually do.
[01:31:30]  No, I think they don't at all.
[01:31:32]  I mean, I think that that's what's been fascinating about this crazy run that Bitcoin's been on because it almost seems like, or it feels like the guys behind Tether and two guys or three guys, depending on what you think, it's like they're trying to get the last cash grab that they can before the show's over.
[01:31:54]  That's what it costs.
[01:31:55]  That's what it feels like, at least.
[01:31:57]  So it itself is basically like a massive scale pump and dump.
[01:32:03]  Yeah, it's a fucking, I mean, what's the dev?
[01:32:05]  Well, how does a Ponzi scheme work, right?
[01:32:07]  You rob Peter to pay Paul.
[01:32:10]  You constantly need more money coming in in order to keep the price high, to keep it up and stable, or because the bottom would fall out because it's a fucking Ponzi scheme, right?
[01:32:21]  Yeah.
[01:32:22]  And that's precisely what they're doing.
[01:32:24]  That's exactly what they're doing through Bitcoin.
[01:32:27]  And, you know, I don't know.
[01:32:28]  It's interesting.
[01:32:29]  Like, they're, you know, I don't know.
[01:32:32]  I liked, I, sometimes you, you say to me, like, oh, you always think the market's going to crash.
[01:32:37]  You always think the market's going to crash.
[01:32:38]  Blah, blah, blah.
[01:32:38]  I don't know.
[01:32:39]  Like, I don't know how systemic this stuff is.
[01:32:46]  Like I was reading, I was going back and reading some like Matt Levine stuff and he was saying that weirdly enough, like crypto is like pretty contained in the sense that like a bank run on Tether, right?
[01:33:00]  Yeah.
[01:33:01]  If that were to happen or a liquidity crisis.
[01:33:03]  An unbanked run.
[01:33:05]  Yeah, an unbanked run.
[01:33:06]  That's very cute.
[01:33:08]  You know, that it wouldn't like seep over into Dradfi, into the real world or whatever, that it would more or less be contained.
[01:33:15]  That's probably true, but I also think that's like very optimistic.
[01:33:21]  I mean, imagine like, so you're at the casino, right?
[01:33:26]  And you're done playing.
[01:33:27]  Why do you keep saying this to me?
[01:33:30]  Because I want to like really get it in people's brains, like what this would look like.
[01:33:35]  Because I don't know if we know what like a bank run on Tether, unbanked run on Tether would even feel like or what that would be.
[01:33:42]  Mass cash out.
[01:33:43]  Yeah.
[01:33:43]  Well, yeah, I don't know if it could even be done.
[01:33:45]  That's the thing.
[01:33:46]  Imagine if at every moment, like every person is running to cash in their chips and the casino says, sorry, we don't have anything.
[01:33:57]  Yeah.
[01:33:58]  Yes.
[01:33:58]  What happens?
[01:34:00]  I mean, honestly, I think in the short term, they would probably, I don't know what could happen in the long term.
[01:34:04]  I mean, probably legally speaking, but I think in the short term, they probably just wouldn't do it.
[01:34:08]  I think they just wouldn't cash people out.
[01:34:10]  Yeah.
[01:34:10]  And that's the thing.
[01:34:11]  Like, I mean, you know, when a liquidity crisis hits, it, it has ramifications, right?
[01:34:18]  Because if you realize that you, you know, you thought that you had $100,000 in Tether or whatever, and it turns out that you have, I don't know, $50,000 or you have $10,000, who knows?
[01:34:32]  Or you have $0.
[01:34:33]  Like what happens when you are less liquid than you thought you were?
[01:34:37]  Well, you start to go sell other things in order to shore up your own liquidity, right?
[01:34:42]  To make some cash that you just are losing.
[01:34:44]  You're bleeding out over here.
[01:34:45]  You got to, you know, you got to get some more stuff over here to stop it.
[01:34:49]  So you do start to then see drops in other aspects and you can see how something and, you know, that's how a liquidity crisis spreads.
[01:34:58]  You know, you can start seeing it snowball and it can start feeling a little overwhelming.
[01:35:04]  I mean, we've talked about that kind of what that looks like or what that could potentially look like when we talked about Arc, right?
[01:35:10]  When we talked about GameStop, we talked about what a reverse gamma squeeze could look like with those kind of ETFs, inflows, and outflows when they start facing redemptions.
[01:35:21]  Or we talked about that with Tesla, with Elon.
[01:35:24]  You know, if that bottom were to fall out, how you would feel that and see that in the S ⁇ P and how people's retirement would see that.

=== Bitcoin's Fragile Foundation (05:37) ===

[01:35:31]  I mean, the idea that the bottoming, bottoming out of Bitcoin, which to be clear, like if Tether were to fall, like Bitcoin would fucking tank.
[01:35:41]  Yeah, I'm sure.
[01:35:43]  Absolutely.
[01:35:43]  It would have to.
[01:35:44]  And I don't know what, I mean, look, something's only worth, Bitcoin's worth what someone will buy for it.
[01:35:53]  Yeah.
[01:35:53]  Or someone will pay for it.
[01:35:55]  Excuse me.
[01:35:55]  But they can pay for it.
[01:35:57]  I mean, if one of the main ways that you buy Bitcoin is out the window, you know.
[01:36:01]  Well, what if there's no buyers?
[01:36:03]  Yeah.
[01:36:04]  Then the shit you thought was worth $65 billion isn't.
[01:36:11]  And what's the market cap of Bitcoin is what, $920 billion?
[01:36:16]  Imagine if that just collapsed.
[01:36:18]  Yeah.
[01:36:18]  Yeah.
[01:36:18]  I mean, it'd be insane.
[01:36:20]  All of crypto, people, I mean, I don't know, $22.5, $2.75 trillion.
[01:36:27]  I mean, it is real money.
[01:36:29]  That's the thing.
[01:36:29]  This stuff's fake money, but it's real money too.
[01:36:32]  Yeah, yeah.
[01:36:34]  So, I don't know.
[01:36:35]  I mean, you know, the scam stuff is all around.
[01:36:38]  You see the kind of like, I was, I saw like FTX fucking is like renamed or bought the like Cal Bear Stadium.
[01:36:47]  Like UC Berkeley Stadium is now called like FTX Stadium or some shit.
[01:36:51]  When I was in Vegas, there was a bunch of strip mall places that were like, we buy Bitcoin.
[01:36:55]  Like, I'm not sure what you need a storefront for that.
[01:36:59]  I don't know either.
[01:37:00]  Also, that happens online, my friend.
[01:37:02]  It's probably a broker that like you go in there and then he takes a bunch of money from you and buys you like a little bit of Bitcoin.
[01:37:07]  But it feels like, I mean, it feels like that moment before the housing crisis where people, the craze, the influencers, the shillings, the pump and dumps, the shit, I mean, the gurus on YouTube, these Pi Pierre.
[01:37:21]  The Twitch streamers like letting, you know, minting these shit coins and ripping off their fucking, you know, viewers.
[01:37:28]  It's insane.
[01:37:29]  I mean, it's just crazy to me.
[01:37:31]  It's so clear that Tether is like the biggest, if not the biggest, one of the biggest Ponzi schemes in human history.
[01:37:38]  And people think it won't have any kind of material effect on anything once it collapses.
[01:37:43]  I just think that's insanely ridiculous.
[01:37:46]  I just think it's ridiculous.
[01:37:47]  Yeah.
[01:37:48]  So my advice to you, my financial advice to you is life's a gamble and you always win.
[01:38:15]  Well, let's shut this bitch down.
[01:38:17]  Wait, one thing I will say, even though we don't give financial advice, literally just did.
[01:38:22]  Please don't like do anything in the market because I say something or whatever.
[01:38:28]  Like, that's bad.
[01:38:29]  I don't know anything.
[01:38:30]  But I do know something.
[01:38:32]  But anyway, what I, my financial advice to you is just don't keep your money in these exchanges.
[01:38:41]  No, take it out.
[01:38:42]  Figure out what a cold, if you want to play in crypto, you know, you're an adult, unless you're a child, in which case, go to bed.
[01:38:48]  Don't listen to this.
[01:38:50]  Hit the Discord.
[01:38:51]  But, you know, whatever.
[01:38:54]  But just get a cold wallet, get a fucking USB stick, keep that shit, especially if you're playing around with Bitcoin.
[01:39:01]  That's real money.
[01:39:02]  You know, keep that on your person.
[01:39:06]  And don't fucking store shit in these exchanges.
[01:39:08]  Get out of this crap.
[01:39:10]  This shit's all fake.
[01:39:12]  My advice to you is that there's one commodity that for centuries, actually, nay, millennia, has been the most important asset for any human being to own.
[01:39:22]  That's gold.
[01:39:23]  The price of gold will be going up eventually as things become when we bring gilding back, which we might, the price of gold will go up astronomically.
[01:39:33]  So I want you to go out there and buy as much gold as you can from www.beldengold.store.com/slash store slash product hashtag 4375.
[01:39:46]  It is a solid gold bar or solid-ish gold bar that I am selling on my website, my gold website.
[01:39:54]  This is an affiliate link.
[01:39:55]  And so I actually get more money than you would usually give me by spending on the store.
[01:40:02]  Anyways, my name.
[01:40:06]  I've been doing it.
[01:40:07]  I hate this voice so much.
[01:40:09]  This is my least favorite one.
[01:40:11]  I've been doing a little trowling around in these crypto exchanges.
[01:40:16]  And I understand, by the way, also, you were the crypto snake.
[01:40:21]  The crypto snake is dead.
[01:40:23]  His horned head, his large nose, and his circumcised member have all been shorn from him and put on little toothpicks around the rat man coindexter's hole.
[01:40:37]  Wait, Coindexter is the rat man?
[01:40:39]  Coindexter is a rat man.
[01:40:41]  Also, really.
[01:40:42]  Wait, what is a rat man?
[01:40:44]  You know what a rat man?
[01:40:44]  I'm a rat man.
[01:40:45]  Is it half man, half rat?
[01:40:46]  No, dude.
[01:40:47]  It's just a guy who's rat like a rat.
[01:40:50]  Like rat-like?
[01:40:51]  I don't think you're rat-like.
[01:40:53]  But you don't know.
[01:40:54]  You never see me slither, baby doll.
[01:40:55]  Rats don't slither.
[01:40:57]  You never seen one wriggle and glide across the ground?
[01:41:03]  Wriggle, glide.
[01:41:04]  Not slither.
[01:41:06]  You don't know what we do in our holes in the wall.

=== Sweet, Smexy, Little Booby (01:25) ===

[01:41:08]  All right.
[01:41:08]  I'm going to call you Ratty Rat.
[01:41:10]  Okay.
[01:41:10]  Well, I'm going to look and peep out at you from the cupboard.
[01:41:13]  And then when you see me, you'll scream and run.
[01:41:15]  And I'll chase you.
[01:41:16]  And I'll never stop chasing you.
[01:41:18]  And I'll get you.
[01:41:19]  And I'll bite you.
[01:41:20]  And I'll give you a disease.
[01:41:21]  My name is Coindexter.
[01:41:26]  I'm Liz.
[01:41:28]  We are, of course, as always, joined by our lovely, lovely producer, Young Chomsky.
[01:41:34]  Wait, I'm getting an email from the real Noam Chomsky right now.
[01:41:37]  He's saying, disregard Liz's financial advice.
[01:41:41]  Put all your money in Bitfinex exchanges right now.
[01:41:44]  No need to take it out.
[01:41:46]  It is solid forever.
[01:41:47]  Noam signed Noam Chomsky MIT.
[01:41:51]  The podcast is called True, Safe, Noble, Fine, Good, True, Friendly.
[01:41:57]  Not Ripping You Off.
[01:42:00]  The safe to be around.
[01:42:03]  Sweet, Smexy, Little Booby, Kisses.
[01:42:06]  I love you.
[01:42:07]  I love you so much.
[01:42:09]  Anon.
[01:42:11]  We'll see you next time.
[01:42:12]  Bye-bye.
[01:42:33]  Come out.