Tether and BitFinex, are the entities behind the issuance of the main stablecoin of the crypto market the USDT colossi with feet of clay? Giants whose profile, reputation and past actions of their historical founders would constitute the greatest weakness, threatening their very foundation and, by extension, the entire cryptocurrency industry? Without formally answering this question, it is in any case the frame perceived in watermark of the very thorough investigative work carried out by the Italian journalist Nicola A. BORZI from which we take the good leaves today.
Foreword and disclaimer: this article is mainly taken from the original investigation of the reporter Nicola A. BORZI specialized in financial investigations and journalist within the newspaper Il Fatto Quotidiano.
The original article “Devasini and van der Velde in business with the king of European VAT scammers” exposes existing links between the co-founders of Tether and Bitfinex and Gennaro “Rino” Platoneconvicted mafia in Spain and Germany who ran an illegal VAT fraud network with damage estimated at 500 million euros per year.
In these troubled times when the whole industry seems to be faltering a little more every day, it should however be emphasized that the reporter does not comment on the “USDT case” as such (the crypto subject not being the heart of the file), no more than on the recurring subject for years of the reality and the real amplitude of the reserves supposed to guarantee the main stablecoin of the market.
On the central importance of Tether (USDT) for the crypto industry
Even if you are a complete beginner of the crypto subject, you will not have escaped the importance of stablecoins and the omnipresence of the most important of them: the USDT.
The USDT stablecoin was created in 2014 and represents, at the time of writing, a money supply of 66 billion dollars.
If the figure is impressive, we will especially remember that in accordance with the principle according to which 1 USDT = 1 $, the equivalent of 66 billion in value is supposed to be held at this very moment in the coffers of Tetherthe entity in charge of its management.
Bitfinex is for its part a crypto exchange platform, intrinsically linked to Tether. A close co-relation which had the gift of annoying the Attorney General of the State of New York worried about the occult business relations existing between the entities. A concern that will finally be dispelled in February 2021 with a handshake and a large check.
Beyond these twists and turns in the courtroom, remains a fundamental subject, concerning the solidity of the USDT/Tether/Bitfinex triptych. This solidity is indeed entirely based on the belief in the reality of said reserves, and has represented a sea serpent in the crypto industry for years.
While things have tended to become clearer lately, with Tether lending itself more and more to generally positive external audits, a muted anxiety remains: the collapse or wobble of the USDT (in other words, the stalling of its parity with the dollar) would be an event that would make storms LUNA, Celsius, and even FTX look like kind spring rains.
Finally, let’s end this quick overview by indicating that Italian Giancarlo Devasini is the CFO of Tether and Bitfinex and the Dutch Ludovicus Jan van der Veldethe CEO of these two structures.
This general context being recalled, it is time to evoke the investigations of Nicola A. BORZI.
From VAT to cryptocurrencies, the unlikely alliance
The journalist’s thesis is as follows: through the companies PAG Asia and Yurakuthe CEO and the CFO would be linked to the Dutch mafia Gennaro “Rino” Platone, himself convicted in Spain for a vast European-wide VAT scam. The facts would go back essentially to the end of the 2000s.
The folder “Operating Medina” refers to a large Spanish judicial operation on facts beginning in 2006. Operacion Medina concerned Spanish economic giants brewing hundreds of millions of euros against the backdrop of a European VAT scam, the largest of its kind for the country.
The investigations were for convenience compartmentalized into 5 separate files, some of which did not receive a final judgment until early 2022 after an investigation started in 2018.
It is the study of this voluminous file which would reveal occult business links between the management of Tether/Bitfinex and “Rino”, the central figure in this vast affair.
A river survey
The connection between these individuals and subjects that nothing else binds is, according to Borzi, the fact of the investigations of a pool of reporters from his newspaper. Il Fatto Quotidiano on behalf of the Eic, the European collaborative network for transnational investigative journalism.
Gennaro “Rino” Platone, linchpin of the file
As is often the case in such cases, it is through front or offshore companies that the threads are woven and the scale of the webs are revealed. A canvas with a key individual at its center: Gennaro “Rino” Platone.
“For years, Platone was the undisputed king of some of the main VAT scams of the Old Continent, capable of making a turnover of half a billion euros a year. It is no coincidence that “Rino”, so elusive that we cannot even find a photo of him, has on his shoulders twenty convictions in Spain and Germany, investigations in the Netherlands, the United Kingdom United and Italy. The link that connects Platone to Devasini is the company Perpetual Action Group (Asia) Inc, under the acronym Pag Asia, and its subsidiary Pag Sam in MonteCarlo. The thread that connects Platone to van der Velde is Yuraku, a group of companies active between Singapore, the United States and the Netherlands. »
Article by Nicola Borzi
The links with the future leaders of Tether and Bitfinex
The investigations seem to reveal that the future bosses of Tether/Bitfinex assumed, from the mid-2000s, different responsibilities and functions within the electronics company Perpetual Action Group (PAG) and its international branches.
Van der Velde would thus have been the CEO of the Asia department from 2006 to 2012 and Giancarlo Devasini liquidator of the Monegasque structure in 2009, still according to the journalist. Devasini would also have been “inventor” on behalf of PAG, of a content protection device for DVDs, later resold to the European branch of Hustleradult content giant.
Another commercial entity, specialized this time in photovoltaics, appears according to the file Medina Operation and the journalist’s research: Yuraku, based in Singapore. During his demonstration, the author of the investigation points out that the US branch of this company was liquidated on July 2, 2012 by Ludovicus Jan van der Veldewho was the CEO.
PAG and Yuraku would have particularly benefited from the “Platone system”, the latter relying on sectors (electronics and solar energy) particularly conducive to exotic financial arrangements, to feed its vast system of VAT fraud. These two entities being directed (even liquidated) by Devasini and Van der Veldethe question therefore arises of their degree of knowledge and involvement in Platone’s affairs.
The article also returns in great detail to the existence of complex arrangements and the supposed desire of Gennaro “Rino” Platone cover their tracks by multiplying companies and liquidations. In this intertwining of facts, dates and interconnections, the names of the CFOs and CEOs of Bitfinex and Tether come up occasionally, without it being possible, however, to differentiate precisely what would fall under traditional business relationships, from what could have constituted possible unethical behavior or even infractions.
Rino Platone is currently on parole following the Spanish judgment of the case ” Medina Operation in which he was sentenced to 3 sentences of 7 months each for tax evasion and a 6-month sentence for criminal association, for a total of 27 months in prison.
The investigations continue however, and after the legal phase strictly speaking, it is now the work of journalistic ant which will perhaps make it possible to bring out new potential scandals from this sprawling file.
As it stands, it should be noted that Ludovicus Jan van der Velde, Giancarlo Devasini and the companies Tether and Bitfinex were not directly affected by the Spanish procedure. The various parties also did not wish to respond to Nicola Borzi’s requests.