Who really owns Tether anyway?

Somehow the sketchiest part of cryptocurrency just got sketchier this week. The Wall Street Journal reported on a 2021 New York Attorney General investigation into Tether, the goliath stablecoin, and it’s turned up a tornado of strange ownership and conflicts of interest.

For those who haven’t been keeping up with it, savvy investors in the space have been extremely skeptical about the security of Tether. Those concerns come from many things: partially due to the rumors of the company being backed by low quality Chinese commercial paper (promissory notes), and partially due to obfuscation of the team when asked to give any reasonable amount of transparency or undergo a real audit.

Over the past few months we got more information on some of the terrible practices Tether conducted. For instance, Tether was making loans in Tether. Seems like a small issue, but that means they were essentially getting leverage on the tokens they issued and not disclosing that leverage. Tether was loaning money beyond a reasonable credit limit to companies that it had ownership in, in particular, Celsius. If you remember, Celsius is the self-proclaimed crypto bank that imploded after the whole Terra LUNA and Three Arrows Capital fiasco.

There are 4 or 5 people who hold major stakes in Tether:

• 43%: Giancarlo Devasini, a former plastic surgeon, founder of Bitfinex, CFO of Tether
• 15%: CEO Jean-Louis van Der Velde, an executive of both Bitfinex and Tether
• 15%: Chief Counsel Stuart Hoegner, an executive of both Bitfinex and Tether
• 13%: Christopher Harborne, a UK and Thai Entrepreneur
• ?%: Brock Pierce + his VC firm Blockchain Capital, Former Mighty Duck and co-founder of Tether. He left early in the company’s history and bought back in around 2017