Did Tether Just Create a $2.27 Billion Monero Like Dark Pool using Liquid?
I love the crypto space for days like today (July 29th, 2019). I’m just going to go through the day as a simple point by point timeline to save all of us a headache. There is no TL:DR, you need to read it all folks. Context matters.
1. At around 7:20AM EST I woke up to find that Kraken Futures were about to go down for maintenance. This is always a red flag in my book, when a platform goes down for maintenance it means PAY ATTENTION. I also found it odd that their twitter made no warning or mention of this down time before or after the futures came back online.
2. Kraken futures were down for 25 minutes and came back online at 7:55AM EST.
3. Within the same minute of Kraken futures coming back online, this happens:
4. I don’t believe in coincidences.
5. This was the first of five large 47000BTC movements of BTC on the blockchain throughout the day (July 29th, 2019).
6. These movements were not churning of the same funds, but all different separate funds.
7. These five 47000BTC blocks were further broken down into increments of 6000BTC throughout the day. After one 47000 block was successfully broken up into pieces of 6000BTC, then the next 47000BTC allotment would move.
8. Thus, all of these funds belong to the same entity. See below for the other four large allotments:
9. In total, 1.34% of all Bitcoin in circulation was moved today, or 239,436 BTC. Which is worth $2.27 BILLION Dollars.
10. Keep in mind, there are $4.03 Billion worth of tether in circulation on public blockchains that can easily be tracked by bots like whale alert. (Often new Tether treasury issuance's are picked up by this bot and signal traders to go long Bitcoin.)
11. Also keep in mind this means that about 56% worth of Tether’s entire marketcap was moved on the Bitcoin Blockchain within those above five transactions.
12. Why are points 10. And 11. Important? Because of this news.
13. Coincidentally, this above news was released at 1:42 PM, 11 minutes after this third large 47000 BTC allotment moved:
14. Oh, and 1 minute after that, Zack Voell had this to say about the Tether court hearing:
15. Again, I don’t believe in coincidences.
16. If you don’t know what liquid is, read up on it. It’s a really smart blockstream project. It’s basically a pegged sidechain to Bitcoin that has ring CT, enabling confidential transactions, much like Monero. A blockchain auditor can’t decipher what is what on a ring CT blockchain most of the time. All amounts and other identifying data are typically obscured. This makes tracking movements on such blockchains by trading bots like whale alert, or regulators like the NYAG, impossible.
17. This obscured Liquid CT chain can enable exchanges to move funds without alerting the public or regulators to what is happening. They can also move these funds in the form of a liquid stablecoin. It could even obscure new Tether treasury issuance's from being made public. But not only that, as an issuer you could probably optionally reveal such issuance's to the public on the blockchain.
18. Thus, a liquid member can pick and choose which transactions they want to make public and which they want to remain confidential. (If I got any of this wrong, please correct me.)
19. Keep in mind, all of these tiny insignificant events happened within not just the same day, but within the same 6 hours.
20. From all this we can construct the following theory: Tether has decided to expand their project by setting aside a large portion of their Bitcoin (56% of the current tether market cap, or $2.3 Billion, or 250,000 BTC) for future liquid deposits. This does three things at the same time;
a) It sends a big middle finger to the New York Attorney General’s Office. It basically sends the message that Tether will do what it wants, when it wants, and there is nothing that the NYAG can do to stop them. Nice power move.
b) It helps to optionally obscure all future issuance's of tether on the liquid chain. Which could make public revelations of treasury creation on the liquid chain that much more powerful for bulls to long.
c) It also allows for whale and exchange dark pools to be formed for private stablecoin movements onchain without anyone seeing the movement but the senders.
d) And lastly, but most importantly: Todays move of 250,000 BTC may have been Tether preparing to deposit into the liquid network (liquid is a pegged sidechain where you lock up 1 bitcoin for 1 liquid).
21. If this last point is true, then be prepared. This could mean that tether has 250,000 Bitcoin ready to deploy into a stabelcoin like asset at any time without anyone knowing. It’s not exactly as if tether just printed $2.3 Billion dollars. But it could be that they are signalling they have that much on standby that could be issued at any time in the form of a dark stablecoin pool that no one will be able to track.
Clients like Warren Buffet can now play without raising any red flags.
I don’t believe in coincidences.