CoinGeek's Crypto Crime Cartel Profile: Tether and Sam Bankman-Fried

Written by :

Jagajeet Chiba

Published on :

17 November, 2021

The ongoing Tether fiasco has revealed that unbacked USDT is likely being printed and then swapped for BTC on exchanges, artificially inflating the price of BTC while exchanges enjoy ballooning commissions from both the processing of USDT and the general rise in speculative activity that these price boosts are inviting, this according to Jordan Atkins of CoinGeek.

Sam Bankman-Fried is the co-founder of FTX, a cryptocurrency exchange which Forbes says currently accounts for 10% of all digital asset derivative trading each month, and Atkins notes that Bankman-Fried and FTX’s ties to Tether go beyond merely enjoying the increased activity that Tether’s constant printing brings to exchanges throughout the ecosystem.

He writes:

Bankman-Fried has been "an outspoken defender of Tether, even at a time when the New York Attorney General’s investigation was proving that the stablecoin wasn’t actually stable at all."

It's sort of funny hearing people claim that you can't create/redeem USDT for $.

Like, I don't know what to tell you, you can, and we do. https://t.co/8XthTsk1xr
— SBF (@SBF_FTX) January 12, 2021

Atkins speculates that "Bankman-Fried was likely well aware at this point that in Tether’s user agreement, they accept no obligation to redeem a single USDT, and he mischaracterizes the concern surrounding Tether by implying that because he has been able to sell his Tether, everyone else holding the some $73 billion worth of USDT will be able to do the same once everyone begins to run for the exit."

He's been sued for market manipulation before. In 2019, Bankman-Fried was accused of running a RICO enterprise.

While the likes of Stuart Hoegner and Sam Bankman-Fried doing their best to pretend there’s totally nothing unusual with Tether stablecoin printing billions of new tethers in single days, the SEC has started to take note.

From CoinGeek:

The SEC is now coming to terms with the Hindenburg-sized problem Tether poses to digital asset markets: VanEck’s proposed Bitcoin ETF was rejected by the securities regulator earlier this month with the regulator listing “manipulative activity involving the purported ‘stablecoin’ Tether (USDT)” as one of the reasons.