The Crypto Sell off Today continues. So where is all that money going...Tether. 4.6 Billion Dollars. But wait, is it really 5.6 Billion? Do they actually have it? THIS IS NOT FINANCIAL ADVICE, just speaking my mind here.

Well, hello everybody. Welcome to another Money Today.

Wow. I’m sure you’ve heard a lot about that in the past 24 hours. Wow. Wow, what a time, what a time.

So, this morning or yesterday, depending on where you are, I made a video and we talked about the fact that all the markets were down and how that just didn’t make any sense. I mean, where did all that money go, right? We’re gonna get into that a little bit here.

Where DID all that money go? Well, it’s a pretty interesting story, actually, at least in the crypto world. As far as on the, you know, the Dow or in the gold, not quite sure, but let’s take a look at some of this.

Alright, we’ll start out with the Dow. Alright: down. Do you get this? Now, I don’t know if you remember about…what was it, a year or so ago? The Dow went down 6.66%. Kind of a strange number, don’t you think? And then today, it’s down 9.99%. If, you know, this was just some random thing, I get it, but on a day like today where nothing makes sense, it just seems very, very strange, I’ll leave it at that.

Gold price: down $25.94, so $26. So, gold… Everything is going crazy right now, and when that happens, gold goes up. Alright!

And then we’ll take a look at the crypto situation, which whoa!

Alright, I wanted you guys to take a look at this. ‘Top 100 Cryptocurrencies.’ I took a screenshot of this just awhile ago. It hasn’t changed much since then, but what I wanted to take a look at…I mean, wow, look at this. 45%. I mean, we’ve lost, you know, over half our value just in the past week.

But I really wanted you to look at it Tether, alright? This is something that’s been on my mind for a long time, I’ve been talking about it. Tether…let’s just say it’s not solvent. I don’t think it was solvent before the crash, but now? Do they…do you really think they $4.6 billion just laying around?

That’s where this money went, a lot of it. It went into Tether. There is a couple other, you know, USDC type things that money went into, but it mainly went into Tether, which became #4, right? That’s supposed to be your store value: $4.6 billion. And that’s going into iFinex, Bitfinex…

As a matter of fact, I want you to take a look at this.

But something flipped with Tether, and it’s influence over the crypto trading ecosystem has grown into a beast that is hard to comprehend.

Tether’s supply has went from just $44 million around April of 2017 to over $2 billion by the 20k Bitcoin peak in late 2017, to where we sit as of today at over $4 billion issued tethers.

Now, looking at comparing the volumes, it looks like Bitcoin has about $18 billion in 24-hour volume, while Tether now outdoes Bitcoin in volume with over $20 billion in 24 hours. Does that seem right?

Now, looking into the Bitcoin markets, you can see every single top market is USDT. Just do a side-by-side comparison of the Bitcoin markets from April and see how much has changed in just over two years: all USDT and barely any fiat pairs.

So, why is this worrying? Well, according to Tether’s current supply of over $4 billion, they should have $4 billion in liquid assets to back those up. But throughout Tether’s history, there has never been a true audit of their reserves and even now on the Tether website the wording has been changed where they admit tethers are not backed 1-to-1 by traditional currency held in their reserves but are now backed by ‘traditional currency and cash equivalents – and from time to time may include other assets and receivables from loans made by Tether to third parties.’

And as we all know, since this website changed and the willy-nilly takeover of the crypto trading markets, the New York AG is now investigating Tether and Bitfinex for fraud and covering up a loss of $850 million, which enabled Bitfinex to borrow $700 million from the Tether reserves.

Remember the website change? Reserves are ‘backed from time to time with other assets and receivables from loans made by Tether to third parties.’ Or, literally themselves.

But of course, Tether, Bitfinex, and the web of companies involved including the parent company iFinex have appealed the ruling by Judge Cohen.

So, some background first: Bitfinex and Tether are tied together because they have the same umbrella company, and they’ve long had history of banking issues in terms of, like, getting their accounts closed and having to change them frequently. This is a common problem for many Bitcoin companies, not just them.

And so, recently you might not have noticed but they had a change in Tether’s terms. Before, they wrote specifically that it was one USDT was backed by one US dollar. Supposedly, at least. There’s been a lot of drama in the crypto world with people not believing them. But afterwards, they wrote the language to kind of some lawyer talk to include not only just US dollars, but it’s also backed by deposits, cash equivalents, and assets including debt. This is a major shift which means that they kind of acknowledge that they’re no longer backed 1-to-1 for Tether.

And why did that happen? Well, this has something to do with Bitfinex losing access to over $850 million held by Crypto Capital – kind of an organization or company that was helping them move funds around and with banking. So, they had to borrow from Tether funds to cover the shortfall or else their exchange would have crashed, and people would not have been able to withdraw their money.

So, the New York Attorney General’s office first announced this, and this was later confirmed by Bitfinex, about the lost access to funds at least, so that’s no mystery or no rumor anymore, that’s official news.

So, their big problem stems from Crypto Capital, which was a partner company they were working with. Crypto Capital was also indicted by the US for fraud and shadow banking. They also had ties to exit scam exchange QuadrigaX, if you guys remember that from Canada with all the shady stuff going around with their founder dying in India over some shady circumstance. The rumor is that the Crypto Capital operators have also a shady history, and Crypto Capital said that the funds were frozen, seized by three different governments — I believe it was like Poland, the US, and another one — however, two of the three countries have denied this, so not really sure what’s going on there.

And so, Tether now is at most 75% backed by the deposited USD, if you believe Bitfinex’s lawyers sworn statements.

And so, they had withdrawal issues due to missing funds and the inability or maybe unwillingness of Crypto Capital to return those funds. Currently they have a legal battle with the New York Attorney General’s office about the situation because the AG wants to freeze Bitfinex’s assets.

So, what is their solution? They want to hold an IEO, or initial exchange offering, which we’ve talked about on this channel before, to cover lost funds. The name of it is the LEO Token which is from the company model…I’m not gonna try to read that out loud, but it’s Latin for ‘one, but (it’s) a lion.’

The idea comes from a Chinese crypto investor and Bitfinex shareholder Dong Zhao.

Seeing what you just saw, take a look at this.

Volume: 54 billion.

Volume: 73 billion.

It’s saying the circulating supply is 4.642 billion, and that’s dollars. So, $4.5 billion is supposed to be held by Tether. Anybody kind of thinking calling out bullshit here? I think this really needs to be looked into.

And if they do not have this money…which reminds me of the Federal reserve, right? That’s why I have always called Tether the Federal reserve of the crypto sphere. I think they’re just making money out of nothing and probably leveraging that and at some point, will just completely resolve. And this $4 billion will just disappear. People’s hard-earned money.

And do you think that will do to the total market here? Devastating.

It’s already devastated, so I don’t…yeah. I would be very careful trading crypto. I don’t know when or how this is going to break. Hey, maybe they have it. But I think I would really want to see that before I go full in on any crypto unless you’re willing to go through what happens when and if this is proven to be complete horseshit.

Alright, back to the talk.

Okay, so we’ve taken a look at Tether and they mentioned at the end, UNUS SED LEO. Right? That’s now #10 and look at this: it’s only down about 6.3%. Now, that’s probably what put it up at #10.

So, we’ve got Tether and I’ll just call it LEO. So, Tether at 4, LEO at 10, right? How much of Bitfinex money, and iFinex, is here in the top 10, and how much of it do they actually have? I mean, we’re looking at LEO is about $1, so that’s sitting right there at $1 billion. So, between the two of those, that’s $5.5 billion, just there.

Alright, it’s just something I really want to pay attention to going forward. It may not matter if all of crypto just disappears, you know, but it does seem to be rebounding somewhat. I see it was at $4,200 just a little bit ago, it’s back up to $4,900. We’ll see if it breaks five.

But no matter what happens in the crypto market, I really hope that we pay attention to Tether. Because if we don’t get these kind of players out of the system, or actually prove that they have this money… But if you saw the video, you know, that I just posted, you could see, you know, there’s some weird things going on.

And you know, all we need in this crypto space is another Federal reserve that can just print money out of nothing, and that appears to be what I see Tether doing. Now, if they’re not doing that, it’s fine, but I just want to know. And I think that’s very important going forward with all of the crypto.

And I’ve asked many people about this. Almost everybody I talked to doesn’t think Tether has that money, but yet they’re still been bullish or holding crypto. And these are the people who are libertarians, the people who wanted to get into this because it wasn’t manipulated. And people even say, ‘oh, Bitcoin can’t be manipulated, there’s only a finite amount. Well, we’ve seen this in gold, we’ve seen this in all the markets, so…

Just something I really want to look into, I want, you know, all of us to pay attention to – anyone that’s in the crypto space, or whatever currency we end up using finally.

Alright, that’s it for today. I’ll see you in the next one.

Eric Phillips

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