There are very few people in this world who know the truth about Tether and among them are the FBI, the US security services, Tether’s founders and previous owners such as Giancarlo Devasini, and Tether’s banker Cantor Fitzgerald. Today, one man is in control of the most important asset in the crypto industry after bitcoin. Maybe, Tether has become even more important than bitcoin itself.
There is surely an exuberant high to experience if you are on cocaine, pumping at will the best performing asset in history. Paolo Ardoino who has the habit of blocking people on Twitter (X.com) for raising questions on whether Tether is pumping bitcoin’s price, is today, in control of what is supposedly a $100 billion asset that provides the liquidity for non US-Dollar holders to the crypto market. Tether has, and still is, an intrinsic part of the bitcoin and crypto markets. Today, Tether can be described as the equivalent of crypto’s central bank. It’s incredible how the young, unassuming Genovese who used to read communist literature and listen to Fabrizio De Andre is now, one of the most powerful people in the world of finance. Or is he?
It depends on whether Tether is telling the truth, but does the truth still matter in Tether’s case? Blackrock’s bitcoin ETF has accumulated more than 200,000 bitcoin to date and is standing at a total value of $15.5 billion. Bitcoin’s price went to all time highs and supposedly, there is now, institutional interest in this “digital gold” after the US state legitmised it with the allowance of its ETF. If bitcoin will be treated just like gold, with institutional investors trading and buying its ETF on a daily basis in large volume as a commodity and “store of value”, then bitcoin’s future seems to be bright. However it also depends on whether Tether is fully liquid, if its reserves are actually true but also on whether it will be allowed to keep existing in the first place. Is Tether a case of “fake it till you make it”? Did Tether print Tethers out of thin air and awaited the ETF for the exit liquidity? Is Tether acting like a bank, creating unbacked Tether against loan certificates? Not to mention those, who can in a way or another, rug Tether itself.
When Changpeng Zhao was arraigned in court by the US authorities last year, critics and investigators like myself who saw CZ’s arrest coming from miles away, were genuinely surprised at the way the US authorities made sure not to rock the boat. Instead of resorting to a full-on assault against the criminal exchange (Binance), which they could have easily done given their authority and legitimacy, CZ was brought to justice with no effects whatsoever on the market, except for the surging meme coins that celebrated him. Authorities took steps to ensure that his case did not crash the crypto markets and cause harm to many people.
Today, Tether is monitored by the FBI and the US security services and Paolo is handing them information over Tether’s illicit activity and the illicit activity with Tether by third parties. He has a lot to give in and Paolo also knows many secrets, some of them very worldly. For a very long time, Tether served as the Dollar liquidity for the Chinese who wanted to siphon their money out of Chine into lush-green US Dollars. There is no coincidence to the fact that Tether secretly held, at one one point time, Chinese commercial paper, instead of actual US Treasuries. The US treasuries came after Tether began disbursing their Chinese paper. That was quite a close call – Tether sold its Chinese paper just before the Chinese economy and the stock market began crashing with no bottom in sight.
Today, Cantor Fitzgerald’s CEO, Howard Lutnick says that Tether are good for the money. We have no way to confirm, however. As of today, Tether still resists in doing and publishing an audit, and its transparency reports, are being published against their will and only after the Attorney-General of the Southern District of New York forced them to do so. This was the work of the same Attorney-General who successfully indicted Donald Trump over financial fraud resulting in a massive $400 million fine: the unstoppable Attorney-General Letitia James. In addition, both Sam Bankman Fried and Changpeng Zhao have been prosecuted by the same office: the Southern District of New York. Prosecutors in New York, surely know much more about Tether than we do and Attorney General Damian Williams would robably have no mercy on gigantic crypro frauds.
There’s a very weird reason why the US authorities have decided to attach themselves to Paolo’s shady operation without taking it down. This time round it’s probably not about preventing retail clients from getting hurt, it has got something to do with issues of national security. The secret services want something that Paolo has: a massive ledger of monetary transactions of the world’s worst criminals and sanction-busters. While the Italian prosecutors in Naples and Sicily are investigating Tether’s use as a means of payment by the Italian mafia to Latin American cocaine exporters, the US authorities are more interested in the use of Tether by North Korea, Russia, Iran, and high-net worth Chinese individuals connected to the Communist Party of China.
As of today, Paolo Ardoino remains one of the most enigmatic yet knowable faces in finance. Like bitcoin, his enigma is also very binary (it either goes to the moon as a new important asset or to 0 just like any other ponzi scheme). Paolo Ardoino, is either telling the truth, and Tether actually has the money, or else he spent a career of fraud and deception building the biggest financial fraud in history – and if he did so, did he actually make it? Is Tether now and fully backed?
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