Paradise Papers Hint at Underlying Connection Between Tether and Bitfinex

There have been some interesting developments in the world of cryptocurrency which shouldn’t go by unnoticed. When the Paradise Papers were released, people initially assumed this would mean big things for cryptocurrency. While it is certainly true this was damning evidence in regards to traditional finance, things are not black and white either. In fact, one very prominent person in cryptocurrency was exposed in the Paradise Papers, which is rather worrisome.

Tether and Bitfinex Get Scrutinized

It is not entirely surprising to see the Paradise Papers expose some potentially malicious activity in the world of cryptocurrency. Nor is it a big surprise to see Bitfinex and Tether-related individuals’ names in regards to what has been going on behind the scenes. In fact, it seems Tether was initially created back in 2014, well before it was even conceived as a digital currency-related project. That’s interesting, especially considering this company is registered in the British Virgin Islands. That location was not chosen by accident whatsoever.

More specifically, Tether was set up as a specialized company to carry capital in tax jurisdictions outside of the country of origin. This leak is a lot bigger than just Bitfinex and Tether, but these two companies certainly stand out among the thousands of others named in the Paradise Papers. This also means any statements regarding Bitfinex and Tether being two separate entities may not reflect the truth, although that remains to be confirmed.

Keeping in mind that Bitfinex lost its banking partner earlier this year, and we have seen a massive influx of USDT tokens out of the blue, it is evident there is a lot more going on than we may think. While Bitfinex claims it is perfectly solvent and all transactions are functioning normally, many people still fear a Mt. Gox 2.0 is just around the corner. Only time will tell if that is true, but there is more-than-valid reason for concern.

Additionally, Tether announced an unfortunate hack of US$31 million worth of funds not that long ago. It forced the company to introduce a fork to prevent the money from being spent or sent to exchanges. It would seem the plans are falling apart for both Bitfinex and Tether, although things have not collapsed just yet. One also has to acknowledge that their connections to the Paradise Papers may not result in negative repercussions for these companies or their users. People are making connections which may or may not be there in the first place.

What makes the Paradise Papers even more interesting is their reference to the name Ludovicus Jan Van Der Velde. Some people may have heard of this individual, as he is the CEO of Tether and one of its directors. As it turns out, he is also the CEO of Bitfinex. This further confirms these companies are not completely separate entities and are controlled by one and the same individual. Whether or not that is something to be worried about remains to be determined. It certainly contradicts most of what both companies have always claimed in this regard.

How things will play out for Bitfinex and Tether remains a big mystery. For now, we have to assume both companies are solvent and not “cooking the books”, so to speak. However, there is a mountain of evidence pointing at things slowly unraveling. Rest assured this is not the last time people will touch upon the connection between these companies. Van Der Velde will have some explaining to do in this regard.

  • tembofly

    Isn’t Reeve Collins the CEO of Tether?
    JP, can you help clarify this?

  • jwymanm

    Another day another hit piece. You jump from just being in a report, the panama papers, to being some corrupt entity. It makes sense that they would start Tether off shore away from gov control first of all. Second of all how do you even imply any wrong doing just because the two are connected? Tether seems like a decent service and for now has worked pretty well. What is your connection to wanting it to be some wrong doing? What if there is one even how has that bothered anyone so far? Multiple exchanges use USDT not just Bitfinex. Just like multiple exchanges use Bitshares which has its own exchange and coin. Who cares?

    • Flaim

      For some reason crypto news wants to keep flogging this drama story. I can’t see any problem with it at all. Even if it blew up, lots of exchanges don’t need to use USDT anymore as banks and countries are becoming more crypto friendly. Tether was a necessary thing of the past because some exchanges were having trouble securing a bank account for fiat deposits.

  • roninmd

    He author intends to spread FUD. Bitcoin is shooting up in value.. almost parabolic and the author wasn’t ready for the climb. Either that or this is part of the government propaganda to prevent a leak of thier fiat. It’s one of the reason’s the non-liberty loving Chinese are preventing their own people from spending thier own hard earned cash on the digital currency. All they got to do is send Bitcoin to a relative in the states to buy a Chinese restaurant and defect to America.