A Tether Update – Crypto Critics' Corner
In this episode Bennett Tomlin and Cas Piancey provide an update on what Tether has been up to for the last several months.
This episode was recorded on July 10th, 2022.
Other episodes mentioned in this episode:
- Episode 1 – Tether: A Stable Discussion
- Episode 2 – Tether: A Stable Discussion Continued
- Episode 79 – Celsius Collapse: Causes, Concern, and Catastrophe (Feat. Dirty Bubble Media)
- Episode 5 – Two Pie Charts and a $60 Billion Stablecoin
- Episode 26 – Cryptocurrency Lending is Too Good to Believe
- Episode 83 – Contagion and Cascading Liquidations in Cryptocurrency
- Episode 19 – Inflation, deflation, and stablecoins with Frances Coppola (Part 1)
- Episode 20 – Algorithmic stablecoins and regulation with Frances Coppola (Part 2)
- Episode 85 – Celsius Network: A Pyramid of Ponzis
Other resources mentioned in this episode:
- Deirdre Bosa Interview with Paolo in 2022
- Paolo and Stuart Hoegner Deirdre Bosa interview in 2021
- Tether post on Celsius liquidation process
- Decrypt article about Babel whisteblower
- Patrick McKenzie thread on Tether assets
- Stuart Hoegner tweet about how first audit will cover 2018
Where to find Crypto Critics’ Corner:
- Bennett’s Twitter
- Cas’ Twitter
- Bennett’s Newsletter
- Cas’ Blog
- Bennett’s Blog
- Asher’s Twitter
This episode was produced and edited by Asher Hirsh.
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We also have a Discord Server you can join here.
00:00:05:12 - 00:00:29:04 Cas Piancey Welcome back, everyone. I am Cas Piancey. I'm joined, as usual, by my partner in crime, Mr. Bennett Tomlin. I know he's good. No, I'm good. We're going to keep moving on. Today, we're doing an episode about our favorite topic, tether. Lately, Tether has, well, been making a lot of noise with all of this contagion going on with all of these companies getting liquidated and going bankrupt. 00:00:29:21 - 00:01:04:13 Cas Piancey Tether has been talking about how they're totally solvent. They're totally fine. And we want to talk about a few things. We want to talk about their loan to Celsius that they supposedly over collateralized by roughly 30%. We want to talk about some discrepancies that we've seen in their transparency reports, their attestations. And we want to talk about a recent interview that the group did that Mr. Paolo Arduino did on CNBC Techcheck with Deirdre Bosa. 00:01:04:20 - 00:01:23:07 Cas Piancey So we're going to link to that. You should watch the whole interview. It's only 7 minutes or so, 8 minutes something like that. But we're going to talk about these three things just to kind of review where Tether is at, what the risks remain to be, and what we expect to see, I guess kind of nothing crazy but a proper review. 00:01:23:07 - 00:01:31:25 Cas Piancey So so let's get started with the the Celsius loan and liquidation process. So Bennett, can you go ahead and get us into that? 00:01:32:03 - 00:01:59:20 Bennett Tomlin Well, sure. Let's start with the most basic parts. Tether was the lead equity investor in Celsius' Series A and so is a part owner of Celsius. Besides this, we knew from the past and have talked about before on this show how tether extended secured loans to various other crypto companies, including Celsius. The way these would work appears to be that Celsius, Babel Finance. 00:02:00:06 - 00:02:41:11 Bennett Tomlin So whoever would put up about say $1.3 billion worth of Bitcoin handed over to tether and tether would then extend them a loan of about a billion tether's at I think it was like a 6% interest rate or something is what Mashinsky said the loan from tether was. And then yeah, that was the loan. What ended up happening is when Celsius was having all of these liquidity issues, they were unable to post additional collateral to tether, and so tether to protect the value of their reserves, which this loan was a part of, supposedly was able to liquidate the collateral above the face value of the loan and still return some of it to Celsius. 00:02:42:14 - 00:03:19:13 Bennett Tomlin This liquidation by tether may have been what ended up putting some of Celsius or other loans in positions into danger. I think it was during the Contagion episode, but it might have been when Dirty Bubble Media was on. We talked about how tether liquidating this loan to Celsius and selling this $1.3 billion worth of Bitcoin into the market may have been one of the things that was really pushing down the price of Bitcoin during that period was Celsius shut off withdrawals and ended up threatening their MakerDAO position because people remember during that period Celsius spent a lot of that threat of having their MakerDAO loan liquidated and that was a wrapped bitcoin position. 00:03:19:20 - 00:03:24:18 Cas Piancey I know we've discussed it before, but can you just go over what MakerDAO is so that everybody is caught up here? 00:03:24:24 - 00:03:52:17 Bennett Tomlin Sure. MakerDAO is a stablecoin. That's basically based entirely around the idea of these same kind of secured loans that tether is giving people you over collateralize a position with cryptocurrency. So in Celsius this case they were using wrapped bitcoin here and so they put up about the same as what tether required about 30% over and then you get extended a loan in DAI which is a stablecoin effectively collateralized by these loans and then you can use that as a stablecoin. 00:03:52:18 - 00:04:15:09 Bennett Tomlin Often it's used to effectively lever up in the cryptocurrency ecosystem, right? You take the crypto you own, you put it up as collateral so you can keep your exposure to that. You get this new stablecoin in this case basically the same, whether it's Tether or Dai, you use that to purchase more crypto or to do other crypto trading and things like that, and in doing so effectively increase your exposure as a whole by increasing the leverage in the system. 00:04:16:01 - 00:04:21:04 Bennett Tomlin So tether supposedly liquidated their loan and Celsius got in trouble because of it? Well. 00:04:21:22 - 00:04:50:28 Cas Piancey I think when most people consider loans now, there's the obvious ones that probably everyone is familiar with is a mortgage which are generally over collateralized. So you'll put down however much the home is worth. Let's say the home is worth $1,000,000. You would put down ten 20%, something like that. And then the bank would extend the rest of the value of that home to you, with the understanding being that you're going to make payments on that for the remainder of the it could be 15 years, 30 years, who knows? 00:04:51:08 - 00:05:09:18 Cas Piancey You're going to pay that out. And if you don't if you stop paying, they're going to take your house from you. And so now they have over collateralize that loan. But normally loans are not necessarily over collateralized. If we're talking about business loans, if we're talking about personal loans, if we're talking about a lot of different loans, they're not actually over collateralized. 00:05:09:18 - 00:05:34:24 Cas Piancey collateralized to some degree. Right. When I think of most loans, either it's unsecured or the individual genuinely does not have the capital necessary to over collateralize alone. So when you're talking to me about all of this over-collateralization, the only other example in my head where over-collateralization is the norm, which is like margin trading, you know, leverage trading, options trading, that kind of thing. 00:05:35:02 - 00:05:53:04 Cas Piancey It's like, oh, this is, these are prime examples of when you need to be over collateralized because the broker might need to call it in and take everything. And so it sounds to me like you're suggesting that's what this over collateralization is all about. It's all about levering up. Levering up. 00:05:53:04 - 00:06:12:08 Bennett Tomlin Yes. So I think you mean a couple of points that I'm going to dissect a little bit like a revolving line of credit extended to a business is not necessarily collateralized, but in many cases will be by, for example, partial ownership, some amount of equity in that business itself. And we're saying over collateralized, but we really shouldn't be. 00:06:12:27 - 00:06:43:02 Bennett Tomlin And we talked about this back when Frances Coppola was on back at like episode 20. The Bank of International Settlements basically says that cryptocurrency is too volatile to be used as loan collateral because you can't be confident that you're going to be able to liquidate it. Right. And like we've seen with a whole bunch of these loan platforms that were exposed to Three Arrows Capital and all these other ones that many of them, despite the loan initially appearing adequately collateralized when they went to liquidate, there was not adequate liquidity for that loan to actually be adequately collateralized. 00:06:43:03 - 00:07:05:01 Bennett Tomlin That even appears to be what's going on with the CoinFlex Roger Ver dispute is that when they finally liquidated the collateral in his futures account, they ended up with a deficit because they had extended too much to him effectively. And so we're saying over collateralized. But these are not really over collateralized. They're collateralized. Hopefully the Bank of International Settlements would say no, but we'll say they are for this. 00:07:05:01 - 00:07:25:11 Bennett Tomlin And the issue with crypto collateralized loans like we kind of talked about in our contagion issue is what you're leading into now is that it is generally used as a way of levering up. It's trying to maintain exposure to your crypto asset and still get an asset you can use to continue to trade, interact and increase your exposure to the crypto ecosystem. 00:07:25:23 - 00:07:43:25 Bennett Tomlin And I think the other example that we do commonly see that looks kind of similar to this is borrowing against your stocks, right? Like we've seen a lot of Elon Musk, for example, put up a bunch of Tesla stock as collateral, have a bank, extend them a loan. And then that is kind of vaguely similar to what we see a lot of these cryptocurrency places doing. 00:07:43:29 - 00:08:11:03 Cas Piancey On that note, I'm going to go ahead and jump into the actual. So Tether released a statement on July 8th and I'm not going to read the whole thing, but I am going to read a part of it. We'll link to it in case you want to feel the full wrath of Tether. And there's a couple of weird things in this statement to me, but first, the Tether loan that was taken out by Celsius was an over collateralized loan denominated in Bitcoin at 130 plus percent. 00:08:11:16 - 00:08:36:28 Cas Piancey And the decision to liquidate the collateral to cover the loan was a part of the original terms of the agreement between the two entities and reconfirmed in writing before the start of the liquidation event. This process was carried out in a way to minimize as much possible and as much possible any impact on the markets. And in fact, once the loan was covered, tether returned the remaining part to Celsius as per its agreement. 00:08:38:21 - 00:09:03:25 Cas Piancey Okay. If I have taken out a short position or a margin loan to buy stock and the bank margin calls me, they take it, they don't send anything back, they take my collateral. That loan is done and I have been liquidated. Never will the brokerage send me anything back. Help me understand why they're sending capital back after they've liquidated a company. 00:09:04:02 - 00:09:29:24 Bennett Tomlin I mean, presumably because it's part of the written agreement they have with Celsius, right. Is that after the liquidation since presumably like their maximum loan to value ratio is at a point well above 1 to 1, they probably include in the agreement that when the liquidation is completed, tether will send the remainder to Celsius. I don't think that part's particularly unbelievable here, but there's a more troubling aspect to this loan that I think we need to touch on here. 00:09:30:21 - 00:10:06:06 Bennett Tomlin And this kind of goes back to tether was one of the lead investors in Celsius tether owns a portion of Celsius. Celsius used customer deposits these bitcoin to get this loan extended in tether and when the time came tether sold customer deposits from a company they own a part of into the market and just liquidated them. Protecting Tether's reserves but selling the customer deposits of a company that tether partially owns. 00:10:06:21 - 00:10:36:25 Bennett Tomlin That is a morally challenging position to be in, and I think that's a detail that hasn't gotten as much attention yet in this story. Is that like the fact that tether extended the loan in the first place and was willing to basically take these customer deposits from Celsius and do this and give them this loan that they knew could be liquidated itself has problems, but then that they actually did liquidate it and sell these customer bitcoins that had been extended to them by Celsius feels real bad. 00:10:37:15 - 00:10:45:14 Cas Piancey Morally, that's pretty ambiguous. But I would say from a business perspective, I am like, okay, well obviously they're going to do that. 00:10:45:25 - 00:11:09:10 Bennett Tomlin Before we move on from this, I do have a couple of other thoughts on this loan before this episode comes out. Another episode we recorded just a couple of days ago will be out in which we discuss a lawsuit filed by Jason Stone against Celsius. In it, he alleges the original loan from tether to Celsius was effectively a bailout for Celsius because they had ended up insolvent by not appropriately accounting for user funds and using user funds to treat. 00:11:09:10 - 00:11:32:00 Bennett Tomlin This is not the only time tether has been accused of doing this in December of 2020, (actually it was September) Decrypt in an article discussing a whistleblower allegation about Babel Finance, another crypto lending platform at the time that was really popular in China. This platform had supposedly taken customer deposits, had begun trying to lever up using them to trade and pay out higher yields. 00:11:32:12 - 00:12:01:14 Bennett Tomlin When they ended up in a position with inadequate liquidity, Tether stepped in, bailed them out and kept them going. And I think this kind of points to something we've discussed for years at this point, which is that tether is not just a dollar pegged token tether is not just its market cap. Tether is like this integral and incestuous part of the crypto industry that gets in and is connected to so many other pieces. 00:12:01:22 - 00:12:19:00 Cas Piancey So we're talking about all this kind of incestual stuff, all of this weird backing, secured loans. And Paolo went on with Deirdre and she asked a lot of these questions directly to him. Let's start talking about some of the main points that stuck out the most to us. 00:12:19:11 - 00:12:44:11 Bennett Tomlin Where do we want to start? I would be nervous going on CNBC, right? Like people get nervous going on major network TV. Let's let's not read too much into his tone and focus more on like his words. Let's start at one specific place I got a starting point is a year ago when Stu and Paolo went on, Stu said when asked for the timeline that the audit would be coming in months, not years. 00:12:44:17 - 00:12:57:14 Bennett Tomlin When Paolo was recently on, he was asked follow up questions about that audit. He said that they currently had a Big 12 auditor performing the audit, which is not a term that. 00:12:58:08 - 00:13:23:02 Cas Piancey Everyone knows is there for big auditing firms. It is called the Big Four. It used to be the Big Five used to be the Big Eight. There have been different moments in time where there were more of these auditors than now, but right now it's four of them. It's Ernst and Young, it's KPMG, it's Deloitte and PricewaterhouseCoopers. So those are your big four. 00:13:23:15 - 00:13:44:22 Cas Piancey Big 12 is not a fucking thing. It's not a real fucking thing. It's totally made up. And I'm mentioning this and I'm so glad Deirdre called this out because he's been repeating it all over the place. He's saying, We've got a Big 12 auditor, we've got a top 12 auditor. There isn't such a thing. There's no such thing. 00:13:44:22 - 00:13:46:29 Cas Piancey Stop saying that. 00:13:47:21 - 00:13:52:08 Bennett Tomlin I'm sure there is some list that this auditor was ranked number 12 on and that's with who. 00:13:52:08 - 00:13:52:23 Cas Piancey Fucking. 00:13:52:23 - 00:14:12:24 Bennett Tomlin Cares. I don't know where the list is, but it probably exists. So yeah, they said they hired a Big 12 auditor, which first of all, let's pause for a second. Even among the Big Four auditors, there is a wide range of quality and diligence among their franchises. Right. Like the U.S. domiciled ones which still have quite a few ethical and other problems. 00:14:12:25 - 00:14:13:26 Cas Piancey This is it. 00:14:13:26 - 00:14:15:08 Bennett Tomlin Their franchise is. 00:14:15:18 - 00:14:25:25 Cas Piancey So important because she asked if they reached out to the Big Four and his response wasn't, Yes, we did. His response was, Yes, in certain jurisdictions, yeah. 00:14:25:25 - 00:14:49:28 Bennett Tomlin And so even across the like different jurisdictions, you'll see a wide variance in the diligence and quality of the audit. The China Hustle, which we've talked about before, kind of gets into how the big four's Chinese franchises were auditing numbers that were completely untethered from reality. Paolo says that they discussed with the Big Four, but did not like ever engage with the Big Four. 00:14:49:28 - 00:14:53:14 Bennett Tomlin The Big Four are not auditing tether in any jurisdiction. 00:14:53:18 - 00:15:16:28 Cas Piancey They're scared. They're scared of auditing cryptocurrencies. That's that was the claim. They're scared of auditing cryptocurrency companies. Not not they're scared of auditing tether in particular, which is probably a lot closer to the truth. But they're scared of auditing cryptocurrencies in general, which again, Deirdre paused on and said, Sorry, what did you say? They're scared. And he was like, Yeah, yeah. 00:15:17:09 - 00:15:42:27 Bennett Tomlin We're like, Well, how's about that? Many auditors were afraid of the reputation risk of working for tether and especially of signing off on their current books. But like, that's another important thing to remember is they're saying top 12, which is already not a thing, already eight below what people actually consider the top. And depending on what jurisdiction that top 12 is operating in, there can still be a massive variation even for that own auditor among their different franchises. 00:15:42:27 - 00:16:04:16 Bennett Tomlin Right? Like if, for example, their London office is generally considered pretty passable there. For example, Cayman Islands office might not have that same reputation, hypothetically just saying not that I'm suggesting that, but they have a top 12 auditor, but they can't tell us who it is because if they tell us, Cas and I are going to call them in annoy the auditor, and then the auditor will start working for Tether, which. 00:16:04:16 - 00:16:14:26 Cas Piancey By the way, I want to make this clear and I don't know, maybe. Bennett You have a different you maybe have a different experience. I never have called any of Tether's auditors, never in my life. I've never planned I've never. 00:16:15:04 - 00:16:25:24 Bennett Tomlin Imagined other journalists have, like as part of writing articles back when Friedman was supposedly auditing them, I imagine journalists have called the auditor to ask, Are you performing an audit? 00:16:26:09 - 00:16:36:17 Cas Piancey And I imagine that's a normal thing that auditors have to deal with is journalist or other people calling and asking about a company. It seems like a pretty normal part of of the job. 00:16:36:25 - 00:16:52:28 Bennett Tomlin I imagine most auditing firms are not going to tell people a bunch of details over the phone. The most they'll probably do if it's already public knowledge is go. Yes, we can confirm so-and-so is one of our clients, but we don't discuss ongoing engagements beyond that. Right? It's not like the auditors are suddenly start going over the phone to a journalist. 00:16:53:06 - 00:16:57:07 Bennett Tomlin Oh, yes, we're auditing them. They have this much of this security. This much of this security thing. 00:16:58:22 - 00:17:00:29 Cas Piancey Yes. Here's the audit. It's right in front of me there. 00:17:01:04 - 00:17:19:11 Bennett Tomlin There is claiming that the reason they can't tell us who is doing the audit is because the auditor will no longer do it. If people know who's doing it, which is like this is Bitfinex and Tether's banking all over again. Right. Tell you where we bank because if we tell you where we bank, the bank accounts will get shut down. 00:17:19:11 - 00:17:33:07 Cas Piancey Right. And I didn't I didn't let you get to the last part of this, which is funny to me that after saying, you know, they're getting audited, they're definitely they're ready. They're all lined up and it's ready to get done. Now. Now, this this audit from a Big 12 auditor, what's that? 00:17:33:16 - 00:17:46:01 Bennett Tomlin Which means they must know who the auditor is. Right? Like, if they're describing them as Big 12, they must exist and be top 12 on a list somewhere. So they it has to like exist as an engagement or they're just flat wrong. 00:17:46:06 - 00:18:07:09 Cas Piancey Right. So, okay, fine. They've engaged with this auditor, but a year ago they said it was a few months away. And this time when asked if if this would be a few months away, years, Paolo said, I don't know. I just don't I don't know what to say about this. It's the blind leading the blind over their tether. 00:18:07:09 - 00:18:16:06 Cas Piancey I don't I don't know how you go on national television. International television, and you're not prepared to answer pretty simple questions like that, you know. 00:18:17:12 - 00:18:20:25 Bennett Tomlin Well and like what keeps your token tethered to the dollar. 00:18:21:08 - 00:18:30:15 Cas Piancey And and and that's so we'll move on from the interview because I think we touched on kind of the most. Is there another part that you think particularly sticks out to you before we move on? 00:18:30:26 - 00:18:57:27 Bennett Tomlin No, not particularly. The the one part that I do want to draw attention to is that Deirdre asked Paolo if there asset management was handled by an external firm that manage their reserves for them. And Paolo said, no, it was entirely internal. So that means our friend Silvio di Stefano, whose name Tether is suing to keep a secret (whoops), must be managing an incredible team of traders who pull off miraculous stunts on a daily basis. 00:18:57:27 - 00:19:24:09 Cas Piancey And this gets us into finally the last part of our update, which is that now, again, you can listen to all of our old episodes about Tether. I think we've done four or five at this point, so quite a few episodes about them specifically, and there's a couple of hours worth of listening there. But lately we've noticed in their transparency, their attestations that were forced upon them. 00:19:24:09 - 00:19:42:21 Cas Piancey By the way, these aren't they're not doing this willingly. They don't like doing it. It was they are forced to quarterly do attestations that they have to show to the public. Don't get confused. Don't let them pretend they're doing this to be the kings of unrivaled transparency. They're doing it because the New York attorney general said, if you don't do this, you're fucking toast. 00:19:44:03 - 00:20:08:06 Cas Piancey So they decided to, you know, play by the rules, at least in that sense. But what we've noticed is that their assets and we're not the only ones who have noticed this. Patrick McKenzie, who you can follow at @patio11 on Twitter. Patrick McKenzie has repeatedly pointed out that their assets over liabilities are essentially like less than 1%. 00:20:08:11 - 00:20:33:17 Cas Piancey If you're a stablecoin, if your assets over liabilities dip below like one, if you if you got below a dollar of assets over liabilities, if you go to zero or negative one, that makes you insolvent. The interesting part here is that tether has gone from a market cap of roughly 80 billion to 66 billion. Tether has apparently sold all of their commercial paper for some reason. 00:20:33:17 - 00:20:56:06 Cas Piancey I mean, it was all great apologies. They've sold a bunch of their commercial paper, which they shouldn't even be doing because it was such perfect, beautiful commercial paper and it was hardly even a risk, they said. But to get critics like us to shut up, apparently just because of people like us, they're going to move away from this, this really beautiful commercial paper that's giving them this great yield, and they're going to move it all into U.S. Treasuries. 00:20:56:14 - 00:21:18:00 Cas Piancey So they're selling off all of this essentially riskier asset class with higher yield and selling it into a lower yielding, less risky asset class. Meanwhile, their market cap is dropping precipitously. Also, let's not forget they have equity in Celsius, which has now pretty much gone belly up. I think we can all agree it's seems like it's going to go bankrupt here. 00:21:18:10 - 00:21:44:08 Cas Piancey So they have equity in companies going bust. They've lent out to Three AC, they've went out to Celsius, they've went out to X, Y and Z Company. That's probably dead in the water already. And yet and yet this this Di Stefano guy has managed to keep their assets over liabilities almost exactly the same throughout all of this. It's unreal. 00:21:44:08 - 00:21:47:11 Cas Piancey It's unbelievable. It is amazing. Amazing. 00:21:47:14 - 00:22:06:13 Bennett Tomlin It is literally unbelievable. You're right. And there's a few different things there should be a cost for them rolling these assets, right. The commercial paper they've rolled over, which we can see because the duration and the attestation suggests that they are still purchasing new commercial paper. They're rolling some portion of it and not just taking the cash and moving it into Treasuries. 00:22:06:21 - 00:22:26:18 Bennett Tomlin So there's a cost associated with that. There's also the changing rates environment that has been occurring like underneath the bonds, commercial paper and treasuries they own. As rates have gone up, the face value of the things they own, we would expect, would go down and their long term position will improve as they roll into the new higher yielding stuff because their overall yield would go up. 00:22:26:27 - 00:22:49:25 Bennett Tomlin But the stuff they're holding as the rates go, it's face value goes down and they're in potentially a more challenging position to roll it. And so like there's several of these factors that contribute to and like the bond market has gotten hammered because of the rising rates and a bond ETFs back part of. Tether You mentioned Celsius equity, infinite fleet equity from Samson Mow's Little Game. 00:22:50:12 - 00:23:06:19 Bennett Tomlin You mentioned the loans to Celsius. We don't actually know if they loaned to Three AC, we just know Three AC was getting a bunch of tethers issued to them. We do know that they had in the past at least issued loans to Babel finance, which is another lending platform that shut off withdrawals. And we have not heard that tether liquidated that loan. 00:23:08:04 - 00:23:40:16 Bennett Tomlin And so, like, you're right, there's a bunch of things in here that seem like we would expect their value to sometimes change. Yet Tether, who says the update the transparency page every single day shows basically the exact same shareholder capital cushion. This isn't the only problem with Tether's transparency page, by the way. We've been pointing out for years and one of our auditor friends also pointed this out for years, that the number of quarantine tethers described on the tether transparency page does not match the number on the blockchain. 00:23:40:29 - 00:24:04:04 Bennett Tomlin I've added up the ones on the Omni blockchain before and it is millions more than they list on their transparency page, which gets it something we discussed back when we talked about the tether CFTC settlement. Right, which revealed that Tether's record keeping was inadequate. They were not keeping good track of their reserves. They were not keeping careful track of the tether's issued and redeemed against those reserves. 00:24:04:13 - 00:24:28:15 Bennett Tomlin And so Tether has a long history of inadequate bookkeeping, of suspicious numbers and these statements. And I think that kind of takes us back to why they've had so much trouble finding an auditor and like they had hired an auditor who supposedly had agreed to do a full financial audit way back in 2017. Right. They had announced to the world the name of the auditor. 00:24:28:25 - 00:24:43:00 Bennett Tomlin Then when they separated from the auditor, their excuse was not that people were calling this auditor and annoying them. Their excuse was this auditor wanted to do excruciatingly detailed procedures and because of that we weren't going to go forward with it. 00:24:43:08 - 00:25:04:19 Cas Piancey That's how an audit works, by the way. Yeah, that's how a fucking audit works. Guys, I don't know what to tell you. When you get audited, they go through your financials and, like, excruciating, especially if you're, you know, you're a bank with a dollar derivative, essentially. If that's your if that is your company. Yeah. Expect a rough audit to see what you're doing with your dollar derivative. 00:25:04:29 - 00:25:31:06 Bennett Tomlin Yeah, well, just to double down on that last year when they went on Deirdre show and promised the audit, Stu ended up tweeting out something that was very strange, which said the audit would be coming soon, that the 2018 fiscal year audit would be coming first, and that there would be no pineapple pizza in their statements, which is a really weird statement for several reasons. 00:25:31:06 - 00:25:55:10 Bennett Tomlin One, the first auditor they engaged was for the 2017 financial year, not 2018. During 2018, they were engaging in a series of conflicted transactions with Bitfinex involving hundreds of millions of dollars moving between the two companies without documentation or contracts. And like why in 2021 were they promising that the first thing they were going to provide was the audit for 2018? 00:25:55:19 - 00:26:13:01 Bennett Tomlin And then finally, why was that promised a year ago? And now they're going on TV and saying, there's no timeline and they can't even tell us who the auditor is. What happened to whoever was supposedly doing the 2018 audit a year ago? Why is that a question that they can't answer? Why? Why in 2018? Oh, I'm going mad. 00:26:13:15 - 00:26:37:28 Cas Piancey Yeah, well, for all this posturing that they consistently do, this is not new to us. We've been following this space long enough that we've seen them do this a million times before. But I do want to say this, that I think they have the same cocky bullshit attitude as Su Zhu at 3AC, Kyle Davies at 3AC, Alex Mashinsky at Celsius. 00:26:38:21 - 00:27:11:21 Cas Piancey These people are broke now and no one knows where they are. No one knows what's going on with them. Nobody's heard from these people in weeks because as cocky and annoying as they were, they lost it all real fast. And that cocky attitude is gone. They're gone and who knows, maybe tether is being cocky because they're totally up to snuff and they're going to prove us so wrong with all these beautiful audits from a Big 12 auditor. 00:27:11:21 - 00:27:34:17 Cas Piancey I don't think so. I just don't believe them anymore. They have lied to us about ten times too many times for me to take a single word. They say as honest. They've they have, if nothing else, proven that they won't be honest unless a government agency forces them to be slightly transparent. They're not going to tell you the truth. 00:27:34:25 - 00:28:01:09 Cas Piancey Don't believe their lies, as my boy in Memento would say. So I, I think that's I wanted to do an update simply because they're posturing a lot lately. They're they're doing press releases, they're going on TV, they're doing the same old song and dance, but it works sometimes. And I just want to make sure people are holding the same space of skepticism that they were holding before they started their song and dancing. 00:28:01:11 - 00:28:01:16 Cas Piancey Yeah. 00:28:02:03 - 00:28:07:21 Bennett Tomlin Tether is a corporation full of liars and is a corporation that itself lies. 00:28:07:21 - 00:28:35:07 Cas Piancey It's simple. I mean, if corporations are people, then there you go. I guess we should take down our tether donation page. We've been accepting donations and tether for Tron Tether, Etherium, tether, Solana Tether on Bitcoin cash. We only do those ones though. We don't do it on any of the other chains. Instead of donating. I guess you can hit the like or subscribe button and thanks for joining us.