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đŸ’„Tether Papers: This is exactly who acquired 70% of all USDT ever issuedđŸ’„
November 10, 2022
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If cryptocurrency was an engine, Tether (USDT) is one of its pistons.

Over the past seven years, the maverick stablecoin has evolved into a primary crutch for the ecosystem. It’s a tool for onboarding new money, managing and growing liquidity, pricing digital assets, and generally oiling crypto markets to keep them smooth.

Tether boasted a $1 billion market capitalization when Bitcoin hit $20,000 at the end of 2017. This year, it’s a $70 billion-plus powerhouse. 

Practically every crypto exchange supports USDT trade in some form. The makeup of Tether’s reserves and its inner workings are yet to be disclosed in clear detail.

Still, the question of who exactly buys Tether directly from its parent company Bitfinex has remained unanswered since its inception way back in 2014.

Earlier this year, Protos shed light on that mystery by reporting that just two companies, Alameda Research and Cumberland Global, were responsible for seeping roughly two-thirds of all Tether into the crypto ecosystem.

Today, we reveal a lot more. 

We’ve spent months cataloguing and investigating every single USDT ever sent to and from Tether, across the eight blockchains and layers on which it currently exists: Omni (Bitcoin), Liquid (Bitcoin), Ethereum, Tron, Simple Ledger Protocol (Bitcoin Cash), EOS, Solana, and Algorand.

Here’s what we found.

Birds-eye view of Tether

Protos pulled blockchain data from all disclosed Tether Treasuries and Printers across the various layers, stretching back to 2014 until October 31, 2021.

We then filtered out transactions between Printers and Treasuries, as our analysis is primarily concerned with USDT sent to and received from third parties.

After accounting for disclosed chain swaps (the process of transferring already-issued USDT between protocols), blockchain data shows Tether:

  • distributed $108.5 billion in USDT,
  • received $32.7 billion in USDT in that same period,
  • sent a staggering majority of USDT directly to market makers and liquidity providers.

It must be noted that the figures cited in this analysis won’t always map one-to-one with Tether’s circulating supply.

Remember, we’ve tracked Tether Treasuries’ outflows and inflows; those volumes will not reflect Tether’s market value exactly (implying that Tether understandably recycles some USDT sent back to its Treasuries).

To make it clear: we’ve analyzed USDT flowing out of Tether Treasuries and linked blockchain addresses to specific entities.

Some of these entities maintain crypto exchanges; the data presented here relates specifically to their operational addresses as companies and not their exchange wallets, be they hot or cold.

Market makers, for our purposes, are simply defined as entities that have received multiple individual transactions from Tether Treasuries of $100 million USDT or more.

The term “market maker” traditionally refers to entities able to profit on the spread of assets (the difference in price between buy and sell orders).

Since it’s unclear which entities in the crypto ecosystem are strictly market making and which also utilize high frequency trading, proprietary trading desks, or operate venture capital funds, this is our attempt to delineate between them (albeit with a broad definition).

Within the context of Tether, market makers eke out gains by supplying crypto exchanges like Binance, Huobi, and FTX with liquidity for their various USDT trading pairs.

  • Tether supplied categorized “market makers” with 89.2% of all USDT ($97 billion) it sent.
  • Trading funds and other miscellaneous companies received $9.2 billion (8.5%).
  • Smaller transactions deemed to have been received by “individuals” amounted to $2.35 billion (2.3%).

As Protos reported in August, market makers Alameda Research (spearheaded by crypto billionaire Sam Bankman-Fried) and Cumberland Global (a subsidiary of trading giant DRW) are still the biggest fish in Tether markets.

Together, Alameda and Cumberland received at least $60.3 billion in USDT across the time period analyzed, equal to around 55% of all outbound volume — ever.

$49.2 billion (71%) of Alameda and Cumberland’s USDT was acquired in the past year alone, equal to about 60% of all Tether issued in that time.

Market makers (Tether’s biggest customers)

Alameda Research

Alameda Research describes itself as a “multistage crypto and fintech investment firm,” and it made 29-year-old chief exec Bankman-Fried crypto’s richest billionaire (Forbes estimates his wealth at $26.5 billion).

Bankman-Fried founded Alameda Research in 2017 after leaving quant shop Jane Street. He opted to brand the fund a “research” unit to avoid banking problems as it started arbitrage Bitcoin trade in Japan.

The firm has historically been headquartered in Hong Kong, but recently announced plans to ship over to another tax haven, Nassau.

We’ve identified more than 70% of all USDT ever issued. For more information on the remaining 30%, please visit our FAQ.

Alameda Research wears multiple hats. It’s the parent company of crypto and crypto derivatives exchange FTX, but it’s also a quantitative trader, and serves as a venture capitalist across the ecosystem.

The firm has led an impressive 18 funding rounds and participated in 71 more, according to Crunchbase.

One of Alameda’s most notable moves was its participation in ‘Ethereum killer’ Solana’s $314 million token sale earlier this year, alongside Polychain Capital and CoinShares.

Alameda Research’s lead brain Bankman-Fried is one of Solana’s most vocal proponents. Solana’s native token SOL has since grown to become the fifth most-valued cryptocurrency at press time, just behind Tether.

  • Tether sent almost $36.7 billion in USDT to Alameda Research.
  • $31.7 billion (86%) was received in the past year.
  • Alameda Research accounted for 37% of all outbound volume. 

While Tether sent nearly $30.1 billion (87%) of Alameda’s USDT directly to FTX, blockchain data shows Alameda operating on a number of other crypto exchanges.

Alameda also received:

  • $2.1 billion (6%) on Binance, 
  • $1.7 billion (5%) on Huobi, 
  • $115 million (less than 1%) to OKEx. 

The rest of Alameda’s Tether ($705 million, 2%) was sent to non-exchange addresses.

Cumberland Global

Cumberland Global is the crypto-trading subsidiary of markets powerhouse DRW, founded in 1992 by chief exec Donald R. Wilson.

As we reported in August, DRW is one of finance’s top dogs, particularly in futures markets (the Financial Times previously said the unit is “an important source” of futures trading volume across the globe).

Cumberland was first launched in 2014, during DRW’s gruelling five-year battle with the Commodities Futures Trading Commission (CFTC) over alleged market manipulation — which it won in 2018.

Cumberland says it onboards wealthy individuals and financial institutions to the crypto ecosystem.

One of those clients is VanEck. The US Securities and Exchange Commission visited DRW in 2019 to discuss the listing of VanEck’s SolidX Bitcoin Trust on Cboe. 

VanEck’s Trust was eventually offered to institutional investors via over-the-counter desks like the ones DRW operates.

  • Tether sent $23.7 billion in USDT to Cumberland.
  • $17.6 billion (74%) was received in the past year.
  • Cumberland received 22% of all outbound volume. 

It has long been suspected, but Protos can confirm that Cumberland is one of Binance’s primary liquidity providers and market makers, and has been on the exchange since around early 2019.

Tether issued Cumberland $18.7 billion in USDT (79%) directly to Binance, and a much smaller amount to other exchanges:

  • $131.5 million (less than 1%) on Poloniex. 
  • $9 million (less than 1%) on Bitfinex.
  • $30 million (less than 1%) on both Huobi and OKEx.

The rest of Cumberland’s Tether ($4.9 billion, 21%) was sent to non-exchange addresses.

iFinex

iFinex is the mother company to its more well-known subsidiaries Bitfinex and Tether. The group has existed in the cryptocurrency space since 2013 and has survived three different hacks, regulatory scrutiny, and extended criticism from online commentators and mainstream media.

iFinex operates as a lender, exchange, stablecoin issuer, VC fund, and trading desk. It has a parent company, the Hong Kong-registered DigFinex.

It’s difficult to determine exactly which country iFinex, Bitfinex, and Tether operates out of: there are no actual offices. Instead, the organization is a mesh of shell companies located in the British Virgin Islands, Hong Kong, Switzerland, and other jurisdictions.

iFinex owners and shareholders seem to be the same individuals who launched it: chief exec JL Van der Velde and chief financial officer Giancarlo Devasini — the two-man team leading Bitfinex and Tether (both multi-billion dollar companies). 

Chief technology officer Paolo Ardoino began working for the pair in 2016. Functionally, as the creators of Tether, they work with everyone who receives USDT.

  • Tether sent at least $4.5 billion in USDT to iFinex.
  • Only $197.5 million (4%) of that was in the past year.
  • iFinex received at least 4% of all outbound volume.

As to be expected, iFinex was one of Tether’s first true “market makers.” The Hong Kong-headquartered firm issued iFinex $4.5 billion in USDT between October 2016 and the start of 2020 — equal to 96% of iFinex’s trackable receipts.

  • $4.46 billion (9.99%) was sent directly to Bitfinex.
  • $1.1 million (less than 1%) was issued to wallets unrelated to Bitfinex.
  • iFinex received at least 4% of all USDT issued across the time period analyzed.

iFinex and its subsidiaries have invested in several other ventures, including but not limited to Netki (a digital identity company) and Exordium (a video game company owned by Blockstream’s Samson Mow).

Nexo

Zug-registered Nexo is a sizable player in the DeFi ecosystem. It operates an exchange, a crypto lending service, and an over-the-counter trading desk.

Nexo’s crypto platform offers yield on a raft of cryptocurrencies, including stablecoins like Tether.

Nexo has been around since 2017, having deployed its own utility token NEXO in May 2018.

Understandably, Nexo handles large amounts of USDT to help manage its activities within the space.

  • Tether sent Nexo $2.6 billion in USDT.
  • Practically all of that was in the past year.
  • Nexo received a touch over 2% of all outbound volume. 

The group doesn’t issue directly to exchanges, instead relying on intermediary wallets to manage its USDT.

Nexo directed at least $1.7 billion USDT directly to its own platform, but similarly to Alameda Research, it is active across multiple exchanges.

As for where Nexo directs its USDT (these figures also include USDT inflows not directly from Tether Treasuries), the unit:

  • sent roughly $1.45 billion in USDT to Binance, 
  • directed $111 million in USDT to Huobi,
  • and deposited more than $57 million USDT to FTX.

Nexo also administered $39 million USDT to defunct Chinese exchange RenRenBit, and $84 million USDT to Bitfinex.

(NB: Nexo and other entities named in this research are known to handle funds on behalf of their clients. So, it could be that some of their outflowing USDT was processed for those parties.)

The firm sent roughly $35 million in USDT to addresses not linked directly to exchanges.

Last month, the New York Attorney General issued Nexo a cease and desist notice to stop it from offering services to crypto users in the state.

At the time, its chief exec Antoni Trenchev said the company had already initiated IP-based geo-blocking to keep New Yorkers out.

Heka

Heka is a market-neutral market maker operated by academics from the University of Malta and several other Maltese individuals. Specifically named in the Paradise Papers are Professor Simon Grima, Dr. Frank Dimech, as well as Joseph Xuerub and Adrian Galea.

The price per share to invest in Heka’s private fund is public and has increased by nearly 100% over three years. Minimum investment amount is $85,000. 

Recently, Heka seems to be tied to Abraxas Capital Management — a company controlled by professional portfolio manager Fabio Frontini and based in London.

  • Tether sent Heka more than $1.5 billion in USDT.
  • $1.1 billion (71%) of that was distributed in the past year.
  • Heka received about 1.5% of all Tether ever distributed.

Heka is primarily a cryptocurrency trading operation. So, naturally it requested Tether directly to the various exchanges it inhabits.

Overall, Heka utilized: 

  • at least $1.05 billion in USDT (68%) on Bitfinex, 
  • more than $144 million (9%) on Binance,
  • and $132 million (8.5%) on Huobi.

Heka also traded on the no-longer-operational RenRenBit ($90 million, 6%), as well as the popular platform Kraken, where it received $60.4 million (4%).

Just over $70 million (4.5%) in USDT was sent to non-exchange addresses under Heka’s control.

Indeed, Heka moves hundreds of millions of dollars worth of Tether and yet they have no website, no way to reach out to them, and no real internet presence whatsoever. 

The reason they’ve been flagged is their discoverability through the Paradise Papers. None of the individuals from Heka responded for comment.

Jump Crypto

Last September, Chicago-bound trading giant Jump Trading made a widely publicized crypto push by investing in decentralized exchange Serum, on Solana.

Serum and Jump had inked a deal for an undisclosed amount that would see the outfit provide the liquidity necessary to make Serum-powered platforms like Mango Markets usable.

Since then, Tether has issued Jump:

  • at least $1.1 billion in USDT on Solana this year,
  • equal to almost 99% of all USDT that exists on that blockchain.
  • Jump Crypto is considered the top liquidity provider to Mango Markets and Solana overall.

Jump “officially” spun out its Crypto subsidiary this September. 

At the time, press materials said Jump Crypto builds tooling and other software infrastructure for blockchains, as well as being an “active participant in trading and market-making activities that help make global crypto markets more efficient.”

While Jump’s crypto activities have been mostly undisclosed, reports indicate the unit has been particularly active on crypto exchanges Bitfinex and BitMEX. 

This makes it likely that Jump makes up a considerable amount of the unidentified Tether amounts cited in this analysis, particularly those to Bitfinex.

Funds and companies (Tether’s medium-sized customers)

Protos sorted entities into the ‘funds and companies’ bracket if they often received USDT transactions in lots between $10 million and $100 million at a time.

Many of the entities in this category are hedge funds and trading units, which generate profit by investing and trading cryptocurrencies.

Multiple entities maintain over-the-counter trading desks and other arbitrage units to exploit price differences between exchanges.

Three Arrows

Three Arrows Capital is run by popular crypto personalities Su Zhu and Kyle Davies. It has registered business addresses in both Singapore (where it maintains an office) and the British Virgin Islands.

As of 2020, the company had a large interest in the Grayscale Bitcoin Trust. The reason Three Arrows has two registered business addresses is likely due to the rule in Singapore that says it cannot control more than (S)$250 million ($183 million) in assets at any given time.

  • Tether sent Three Arrows at least $674 million in USDT.
  • At least $502 million (74%) of that was in the past year.
  • Three Arrows has received at a minimum 7.3% of all USDT in the ‘funds and companies’ bracket.

Three Arrows describes itself as a crypto hedge fund that provides “risk-adjusted returns,” and it operates similarly to Heka.

The group mostly trades and invests in cryptocurrencies for profit, as opposed to the large-scale liquidity provision exacted by the likes of Alameda and Cumberland.

It also acts as a venture capitalist on occasion. Most recently, Three Arrows backed Sam Altman’s Worldcoin, a controversial biometric data-farming gambit that pays individuals to scan their irises for a small amount of cryptocurrency. 

Unlike Heka, Three Arrows receives USDT from Tether to an intermediary address before distributing it to trading platforms like Huobi and Binance. 

Stablecoins aside, Three Arrows’ main address has mostly traded:

  • Ethereum and Ethereum-bound Bitcoin (WBTC),
  • DeFi platform Yearn Finance’s native token (YFI),
  • Exchange tokens like FTX’s FTT, Uniswap (UNI), and SushiSwap (SUSHI).

Three Arrows has also handled significant amounts of yield tokens Compound (COMP) and Aave (AAVE), as well as blockchain oracle token Chainlink (LINK).

It’s worth noting that Three Arrows — like the other entities in this analysis — has handled significantly more than $674 million USDT in its history. The figures cited above only relate to the tokens it received directly from Tether Treasuries.

Three Arrows has also sent Tether Treasuries far more USDT than the figures listed here (more on that later). 

Blockchain data also indicates that Three Arrows switched to receiving USDT directly to exchanges earlier this year — likely to Binance. 

So, some portion of the “Binance Market Maker” volumes cited earlier almost certainly belongs to Three Arrows.

Bitquery shows that Three Arrows has collectively been sent billions in USDT from exchanges Binance, Bitfinex, and FTX, funds it acquires by trading digital assets.

Delchain

Delchain is a peculiar piece of the Tether puzzle. It’s owned and operated by Tether’s primary banking partner, Deltec Bank and Trust.

Paolo Ardoino, Tether and Bitfinex’s CTO, briefly served as a director, and Janvier Chalopin, the son of the Deltec Bank and Trust’s chief exec, is a director.

Delchain, though established in 2019, has still moved a significant amount of Tether and partners with many influential cryptocurrency companies, including Bitfinex, Kraken, and Tether itself.

  • Tether sent Delchain at least $908 million in USDT.
  • USDT was distributed steadily over time — 63% of it in the past year.
  • Delchain received about 10% of all USDT from the ‘funds and companies’ bracket.

Overall, Delchain directed: 

  • About $694 million (76%) of its USDT to Bitfinex,
  • $211 million (23%) to Kraken,
  • and $3.2 million (less than 1%) to Binance.

Blockchain Access and RenRenBit

UK-based market maker Blockchain Access is another notable entity to have received large amounts of USDT directly from Tether.

Blockchain Access manages crypto exchange Blockchain.com — headquartered in Luxembourg. It received more than $881 million in USDT, with $679 million (77%) issued in the past year.

We tracked Blockchain Access’ USDT to crypto exchanges including Binance, FTX, Bitfinex, and Nexo. It has also handled significant amounts of Basic Attention Token (BAT), DeFi token Aave, as well as Chainlink, OMG Network, and Origin Network.

Lastly, RenRenBit. The Singapore-headquartered company that serviced the China-based exchange of the same name was issued over $200 million in USDT.

(NB: Bitfinex’s AML agent was once a Hong Kong firm “Renrenbee Ltd,” highlighting how close RenRenBit’s relationship was with Bitfinex).

Individual traders (Tether’s smallest customers)

For our ‘individuals’ bracket, we considered entities to be individual traders if Tether issued them USDT valued under $10 million at a time.

This is obviously not perfect, however considering the volumes linked to aforementioned funds, companies, and market makers, this proves an effective method of separating crypto trading enterprises from individual crypto traders.

The first character on our list is tied to multiple companies, but according to information gathered by Protos, they also were issued Tether under their personal name.

Shilong’s Web, Tether’s most curious customer

Shilong Wang is a curiosity, to say the least. They appear, on the surface, to handle USDT for a raft of trading firms, including little-known managers Paretone Capital, Aoide Capital, Max Victory Wealth Management, and ZB Trade — registered to tax havens around the world.

Paretone and Aoide curiously share a physical address in San Jose, California at Hanhai Park. Their co-founder and chief exec is listed as a “Keke Wang” on Aoide’s website, who is noticeably absent from any corporate filings.

Protos visited Paretone and Aoide’s purported offices but found no mention of either firm on the building’s office guide.

We refers to Shilong-connected entities as “Shilong’s Web.”

  • Tether issued Shilong’s Web $595 million in USDT.
  • Roughly 1% of it was received in the past year.
  • Shilong’s Web is responsible for 6.5% of the ‘funds and companies’ bracket.

It should be highlighted just how important a customer Shilong was to Tether. In the second half of 2019, Shilong’s Web represented over 5% of all USDT ever issued — just before the likes of Alameda and Cumberland took such a keen interest.

Shilong’s Web unexpectedly transacted semi-frequently with Cumberland Global:

  • Shilong’s Web sent Cumberland $20.4 million in USDT between April and August 2019.
  • Cumberland directed $1.14 million in USDT back to Shilong’s Web in April 2019.
  • It’s likely Cumberland operates over-the-counter services for trading entities like Shilong’s.

Shilong’s Web deposited its USDT to exchanges like Huobi and Binance, but it was also responsible for sending over $108 million in USDT to long-serving Japanese exchange Bitbank.

Christopher Harborne (the Brexit Bankroller)

As we reported in April, Christopher Harborne made international headlines as Brexit’s bankroller. 

He personally donated in total $19 million to political party Reform UK — the lead lobbying group behind the UK’s successful bid to leave the European Union.

Harborne’s web of shell companies were made public in the Panama Papers. 

Harborne first appeared as a DigFinex shareholder (iFinex, Bitfinex, and Tether’s parent company) under his alternative Thai identity Chakrit Sakunkrit between 2017 and 2018.

This means Harborne was a DigFinex shareholder at the time of his donations to Reform UK. It’s common for individuals who do continued business in Thailand to adopt a local moniker.

He’s also the father of Will Harborne, chief exec of decentralized exchange DiversiFi, which started out Ethfinex, a sister company to Bitfinex. DiversiFi spun out from Bitfinex in 2019.

Protos can now reveal that Tether issued Harborne more than $70 million in USDT under his Thai name in early 2019.

TRON’s Justin Sun

Notorious marketeer and TRON founder Justin Sun has received more Tether than any other individual. 

We first made Sun’s prolific Tether buying public in August. In total, he’s acquired at least $200 million in USDT. Most of the funds we’ve linked to Sun were sent throughout 2019 and 2020.

Sun received nearly $50 million in USDT directly on Binance. It’s likely he’s received a lot more to both unidentified wallets and various exchanges.

Sun was notably the first ever recipient of Tether on the TRON blockchain in April 2019. He’s evolved to become a prolific investor in NFTs and his exploits across the DeFi ecosystem have made him a popular crypto figure.

Blockchain data also shows he sent $120 million back to Tether Treasuries.

Tether returned to Treasuries (inflows)

Tether inflows — funds sent back to Tether Treasuries — are comparatively more difficult to track than outflows.

While Protos has identified more than 70% worth of USDT ever issued, more than 80% of USDT ever returned to Treasuries came from cryptocurrency exchanges. 

This makes the sender of those transactions practically impossible to identify.

  • $23 billion in USDT (62%) was returned in lots over $100 million (market makers). 
  • $12.7 billion (34%) was sent in batches between $10 million and $100 million (funds and companies).
  • $1.5 billion (4%) flowed into Treasuries in sums under $10 million (individual traders).

We did manage to track USDT inflows for two prominent entities: Three Arrows and Nexo.

While Three Arrows did switch from having USDT issued to third party wallets to exchanges like Binance instead, it kept retrieving funds from various exchanges to its main wallet before returning to Tether.

  • Three Arrows sent back nearly $1.96 billion in USDT in the time period analyzed.
  • More than $1.1 billion (58%) was returned as crypto markets peaked between late April and May this year.
  • Three Arrows is responsible for 5.2% of all USDT ever sent back to Treasuries.

As for Nexo, it followed similar patterns as Three Arrows — pulling funds back from the various exchanges on which it operates before returning USDT to Treasuries.

  • Nexo sent $1.74 billion in USDT back to Tether Treasuries.
  • Nearly $1.75 billion (94%) was returned between the second half of May and late July, 2021 (as markets bottomed out).
  • Nexo was behind 4.7% of all USDT sent back to Tether Treasuries.

What the Tether Papers mean

It must be stressed that Protos is not explicitly alleging any wrongdoing on behalf of any of the entities detailed in this investigation.

But importantly, crypto traders on most exchanges should understand the sheer size of who they could be trading against. 

The exact size of market makers like Cumberland and Alameda — as well as funds like Heka, Three Arrows, and Delchain — are previously unreported. 

These entities are undoubtedly dominant forces across multiple platforms, with the ability to easily out-trade smaller crypto investors.

Numerous other large and unnamed trading funds have acquired hundreds of millions of dollars in USDT. These companies are mostly registered to tax havens like the British Virgin Islands, Hong Kong, and the Seychelles.

Some, similarly to Shilong’s Web, have sent and received USDT from major players like Cumberland Global, while others assisted prominent projects such as Decentraland to manage Ether raised throughout their ICOs. 

The total value of the Tether in the ‘other funds and companies’ bracket exceeded $7 billion. Protos will reveal information about these companies in future investigations.

Still, we emphasize that Tether has indisputably embedded itself within the crypto ecosystem, and for better or worse, serves a purpose within it.

So, it stands to reason that any firm or individual who operates within the crypto space is likely to interact with USDT at some point.

It’s worth highlighting that funds like Three Arrows effectively make use of the Tether they receive, as proven by inflow patterns.

Three Arrows was able to acquire USDT in the leadup to a giant crypto bull run, and then return those funds as the market was cooling off. 

This shows that USDT can be utilized for profit — as it should. It is the leading stablecoin, and allowing traders a neutral zone to trade in and out of their crypto positions is its entire business model.

đŸ’„But the exact workings of Tether are unclear. Quite literally, nobody knows precisely how Tether operates — or which companies’ commercial paper make up an overwhelming majority of its assets backing USDT.đŸ’„

đŸ’„We understand that Tether lends out its USDT in overcollateralized loans, likely for Bitcoin and Ether, but Tether has never formally disclosed how those operations work.đŸ’„

đŸ’„In fact, Tether has gone out of its way to obfuscate the services it provides to the crypto industry.đŸ’„

Discounts for large issuances are rumored. In our research, we are yet to find any confirmation of any discounts for USDT purchases.

But what is proven is that Bankman-Fried’s Alameda Research and Cumberland Global are two prolific Tether buyers that trust USDT is valued correctly.

Together, they’ve acquired at least $60 billion worth of USDT in the past two years. They inject liquidity into the ecosystem’s leading exchanges based on their trust in Tether, which in turn provides markets with the confidence that 1 USDT is equal to $1.

đŸ’„Whether that’s true all the time — unfortunately nobody knows for sure.đŸ’„

Regardless, Cumberland and Alameda, and to a lesser extent units like Jump Crypto, believe every USDT is always “fully backed by Tether’s reserves,” and that Tether has enough cash on hand to service dollar redemptions.

In the time between the end of Protos’ data analysis (October 31 until today), Tether has printed more than $4 billion worth of its stablecoin, bringing the total USDT in circulation to nearly $75 billion.

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đŸ”č Chutes is using post-quantum cryptography, trusted execution environments, and Nvidia confidential ...

🚹 Chutes is being framed as a Hyperliquid-style breakout for decentralized AI inference, with live revenue, verified GPU infrastructure, and a direct challenge to centralized cloud AI 🚹
🚹 JPMorgan’s criticism of the CLARITY Act is fueling a fresh power struggle over who gets to write America’s crypto rules 🚹

A new clash is emerging between legacy finance and crypto legislation after JPMorgan CEO Jamie Dimon reportedly warned that the CLARITY Act could let crypto firms offer bank-like products without bank-level oversight. The dispute is quickly turning into a larger fight over regulation, competitiveness, and who controls the future architecture of digital finance in the United States.

🔑 Key points

đŸ”č Jamie Dimon reportedly called the CLARITY Act a threat to the financial system, arguing it could allow crypto firms to offer yield-like products while avoiding the capital, reserve, and oversight burdens traditional banks face.

đŸ”č Senator Cynthia Lummis pushed back publicly, framing the issue as a global strategic race and warning that if the U.S. does not set digital asset standards, other powers will.

đŸ”č The core tension is whether the bill creates legitimate regulatory clarity or simply opens the door to regulatory arbitrage for crypto platforms operating outside the traditional banking...

🚹 JPMorgan’s criticism of the CLARITY Act is fueling a fresh power struggle over who gets to write America’s crypto rules 🚹
👉 Coinbase just launched an AI agent for Crypto Trading

Custom AI assistants that print money in your sleep? 🔜

The future of Crypto x AI is about to go crazy.

👉 Here’s what you need to know:

💠 'Based Agent' enables creation of custom AI agents
💠 Users set up personalized agents in < 3 minutes
💠 Equipped w/ crypto wallet and on-chain functions
💠 Capable of completing trades, swaps, and staking
💠 Integrates with Coinbase’s SDK, OpenAI, & Replit

👉 What this means for the future of Crypto:

1. Open Access: Democratized access to advanced trading
2. Automated Txns: Complex trades + streamlined on-chain activity
3. AI Dominance: Est ~80% of crypto 👉txns done by AI agents by 2025

🚹 I personally wouldn't bet against Brian Armstrong and Jesse Pollak.

👉 Coinbase just launched an AI agent for Crypto Trading

đŸ‡ȘđŸ‡ș European Central Bank President Christine Lagarde to step down on February 7th.

đŸ€– Synthdata open-sources AutoQuant to test AI agents against SN50 miners

Synthdata (SN50) has released AutoQuant, a benchmark that pits frontier AI agents against live quantitative forecasting miners. In its reported tests, the agents have not consistently beaten the top miners.

🔑 Key points

đŸ”č Agents get limited resources: Each has 18 hours and a $100 budget to build a Monte Carlo forecasting model using a starter model and frozen one-minute market data.

đŸ”č Tests cover multiple markets: The benchmark measures one-hour and 24-hour crypto forecasts, plus 24-hour forecasts for commodities and equities.

đŸ”č Future data tests performance: Agents’ selected models are evaluated against the following 30 days of market data and roughly 250 live miners, using Synth’s forecasting and scoring approach.

đŸ”č Top miners still lead: No tested AI agent has consistently outperformed Synth’s leading miners. Claude Opus 5 scored 33.5 in the second campaign—about one-third of the top miner’s ...

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⚠90 DAYS WITHOUT THE GRID⚠
Why Governments Are Preparing for Critical Systems to Fail

MIND BEND THEORY | DOCUMENTED INVESTIGATION

The United States is preparing major military installations to continue operating if civilian infrastructure goes down. Britain is telling households to prepare for days without essential services. India is warning that an attack on the financial system can weaken a nation. And the Bank of England is asking what happens when cyber defenses fail—not if they can prevent every attack.

Individually, each development has an explanation.

Put them beside one another, however, and a larger pattern becomes visible.

Over the span of only a few weeks, governments and financial authorities in the United States, United Kingdom and India have publicly discussed preparations for disruptions involving some of the systems modern society depends upon most:

Power.

Water.

Fuel.

Communications.

Banking.

Supply chains.

This does not establish that these governments are preparing for one secret event.

There is no public evidence of a coordinated countdown, predetermined blackout date or single intelligence warning connecting them.

But there is something here that can be documented.

Governments are increasingly planning around a question that sounds very different from traditional emergency preparedness:

What happens when the systems we normally assume will be available are no longer available?

And in the United States, that question has now reached the Pentagon.

DOCUMENT 01

UNITED STATES — FORTRESS AMERICA

On September 30, 2026, Defense Secretary Pete Hegseth established a program called FORTRESS America.

The acronym stands for:

Federal Operations for Resilience, Troop Resources, Energy, Supply and Survivability.

The program addresses a vulnerability that rarely receives much public attention:

The world's most powerful military still depends extensively on civilian infrastructure.

Electric grids.

Commercial supply chains.

Communications infrastructure.

Fuel.

Foreign sources of critical materials.

FORTRESS America is intended to reduce those dependencies.

The Pentagon's own public description says the initiative is designed to ensure that major U.S. military installations generate independent power so that bases remain operational even if the civilian grid is taken down by cyberattack or sabotage.

It goes beyond electricity.

The program includes five major areas:

Energy independence

Installation hardening and cyber resilience

Supply-chain and defense-industrial-base resilience

Strategic defense reserves

Space and spectrum resilience

The Pentagon also wants deeper reserves of critical supplies so military operations can continue when ordinary supply lines are disrupted.

The underlying idea is simple:

The military should be capable of functioning even when the infrastructure surrounding it cannot.

An October 7 implementation memorandum obtained by DefenseScoop shows that the Pentagon had already begun establishing the FORTRESS America Program Office and assigning officials to implement those objectives.

Then another piece of the story emerged.

DOCUMENT 02

THE 90-DAY REQUIREMENT

On October 25, Fox News published details from additional FORTRESS America documents its reporters reviewed.

According to that reporting, major continental U.S. military installations are being prepared to sustain essential operations for at least 90 days without outside support.

The essential systems reportedly include:

Power.

Water.

Fuel.

Communications.

Think about the distinction carefully.

The Pentagon isn't telling Americans that the United States will lose electricity for 90 days.

It isn't predicting a 90-day blackout.

Military contingency planning deliberately prepares for scenarios officials hope never occur.

But preparing installations for this possibility tells us something about the scenario being considered.

The Pentagon is building resilience around the possibility that a sufficiently serious conflict or attack could interfere with the civilian systems on which military installations normally depend.

The publicly released FORTRESS material specifically discusses:

Cyberattack.

Sabotage.

Grid disruption.

Foreign supply-chain disruption.

Attacks against installations.

And prolonged military contingencies.

That makes the 90-day requirement significant—but it must be described accurately.

Mind Bend Theory verification note:

The September 30 FORTRESS America program itself is documented publicly.

The October 7 implementation memorandum has been reported and described by DefenseScoop.

The 90-day requirement, however, currently comes from documents reviewed by Fox News, rather than a primary 90-day document independently published for the public.

That distinction matters.

We follow the documents as far as they take us—and no farther.

DOCUMENT 03

UNITED KINGDOM — BE READY FOR THREE DAYS

Now cross the Atlantic.

On October 22, the British government launched its new Be Ready campaign.

This time the audience wasn't the military.

It was ordinary households.

The UK government is asking households that are able to do so to prepare to remain self-sufficient for approximately three days during an emergency.

The government specifically discusses disruptions affecting:

Power.

Water.

Phones.

Internet access.

A Parliamentary Written Statement issued the same day explicitly states:

“The updated advice calls on households to be self-sufficient for three days in the case of an emergency.”

The government recommends maintaining three days of bottled water and non-perishable food.

Its expanded preparedness guidance includes:

Approximately three litres of drinking water per person per day

Three days of non-perishable food

Battery-powered or wind-up radio

Torch and spare batteries

Charged power bank

Essential medications

First-aid supplies

Blankets and warm clothing

Important telephone numbers written down

Basic hygiene supplies

Cash

Why cash?

Because during some disruptions, electronic payment systems and ATMs may not function normally.

That creates an important connection between infrastructure and finance.

Electricity isn't isolated from banking.

Communications aren't isolated from payments.

Modern infrastructure is interconnected.

And failure can move through those connections.

DOCUMENT 04

INDIA — “WARS ARE NOT FOUGHT WITH WEAPONS ALONE”

Three days later, on October 25, another statement appeared.

This one came from Indian Prime Minister Narendra Modi.

Modi was inaugurating the Reserve Bank of India's newly established Data Centre and Cybersecurity Training Institute in Bhubaneswar.

The facilities are designed to strengthen the technological foundations and cybersecurity resilience of India's financial system.

Four data centres will host mission-critical payment and settlement systems.

But Modi's explanation of why this matters went beyond ordinary cybersecurity.

His official statement says:

“Nowadays, wars are not fought with weapons alone; a nation can also be weakened by attacking its economy.”

He continued by saying India's growing economy requires its banking system to be protected against cyber looters and cyber terrorists.

That puts another critical system into the picture:

Money.

A modern economy depends on digital banking infrastructure almost as heavily as it depends on electricity and telecommunications.

Payment systems move commerce.

Banks hold liquidity.

Settlement systems move money between financial institutions.

Data centres keep those networks functioning.

Disrupt the financial infrastructure badly enough and the consequences don't remain inside banks.

They reach businesses.

Supply chains.

Payroll.

Purchasing.

Markets.

And households.

DOCUMENT 05

BANK OF ENGLAND — WHAT IF CYBER DEFENSE FAILS?

There is another document worth reading.

On June 30, Bank of England Deputy Governor Sarah Breeden delivered a speech titled:

“Agents of Change.”

The subject was artificial intelligence and financial stability.

One section deserves particular attention.

Breeden warned that advanced AI systems are becoming increasingly capable of identifying and chaining together cyber vulnerabilities.

That changes the nature of cyber risk.

AI can help defenders.

But the same capabilities can potentially increase the speed and effectiveness of attackers.

The important change in thinking comes afterward.

Preventing attacks is no longer enough.

Financial institutions must also prepare to recover after a successful attack.

Breeden raised the possibility of simultaneous disruption across multiple financial firms.

She then asked whether critical financial institutions may eventually require completely separate failover capabilities—or even the ability to rebuild compromised core systems from “bare metal.”

In October, Reuters reported that the Bank of England was pushing financial institutions further toward this type of recovery planning.

That represents a subtle but significant change in the question.

It isn't simply:

How do we stop the attack?

It's becoming:

What happens if we don't?

And:

How do we keep the system functioning afterward?

CONNECT THE DOCUMENTS

Now put the documents beside one another.

UNITED STATES

Military installations are being hardened so essential operations can continue when civilian infrastructure is disrupted.

UNITED KINGDOM

Households are being told to prepare for three days without services they normally assume will remain available.

INDIA

The prime minister publicly warns that modern conflict can weaken a country by attacking its economy and calls for stronger protection of banking infrastructure.

BANK OF ENGLAND

Financial authorities are examining recovery scenarios in which cyber defenses have already failed and multiple institutions could potentially be disrupted simultaneously.

These aren't identical programs.

They aren't even aimed at the same people.

And there is currently no public evidence demonstrating that they were coordinated.

But they share one important assumption:

CRITICAL SYSTEMS CAN FAIL.

And resilience therefore cannot begin after the failure occurs.

It has to exist beforehand.

THE SYSTEM BEHIND THE SYSTEM

This is where the story becomes bigger than individual announcements.

Modern infrastructure isn't a collection of isolated systems.

It's a network.

Consider what happens when electricity fails.

Without power, telecommunications eventually become difficult to maintain.

Without communications, electronic payments can be affected.

Fuel pumps require electricity.

Water systems depend on pumping and treatment infrastructure.

Businesses depend on payment processing.

Supply chains depend on communications, transportation and fuel.

Hospitals require electricity, communications, water, medicine and logistics simultaneously.

A serious disruption doesn't necessarily remain inside the system where it started.

It can propagate.

POWER → COMMUNICATIONS → BANKING → COMMERCE → SUPPLY CHAINS

And the dependency runs in multiple directions.

That interconnectedness is precisely why governments plan for resilience.

WHAT THIS DOES NOT PROVE

Mind Bend Theory exists to examine unusual patterns.

But a pattern isn't automatically proof of a conspiracy.

There is currently no public evidence showing that Washington, London and New Delhi are secretly preparing for the same scheduled event.

There is no verified date for a coming global blackout.

There is no public document establishing an imminent 90-day collapse of the American electrical grid.

And the Pentagon's 90-day military resilience requirement should not be interpreted as a prediction that Americans will lose electricity for 90 days.

That would go beyond the evidence.

What the evidence actually establishes is interesting enough.

Governments increasingly consider disruption of power, communications, supply chains and financial infrastructure plausible enough to justify concrete preparation.

The UK is preparing households.

The United States is hardening military infrastructure.

India is strengthening the technological backbone of its financial system.

The Bank of England is thinking about how banks recover after cyber defenses fail.

That isn't speculation.

It's in the documents.

THE QUESTION

Perhaps the most important change isn't what governments believe will happen.

It's what they're preparing to survive.

For decades, infrastructure security focused heavily on preventing failure.

The emerging model looks different:

Assume something eventually gets through.

Assume something eventually goes down.

Build the ability to continue operating anyway.

The Pentagon calls that resilience.

The UK calls it being ready.

Central banks call it operational resilience.

Different terminology.

Same fundamental question:

WHAT STILL WORKS WHEN THE SYSTEM DOESN'T?

DOCUMENT TRAIL

Read the Evidence Yourself

Mind Bend Theory strongly encourages readers to examine the original material rather than relying solely on our interpretation.

đŸ‡ș🇾 DOCUMENT 01 — FORTRESS America Establishment

September 30, 2026

Defense Secretary Pete Hegseth's memorandum establishes FORTRESS America as a Department of Defense resilience program.

The publicly reported memorandum establishes the program around installation resilience, independent energy, strategic reserves, supply chains and related national-defense infrastructure.

Source type: Pentagon memorandum / official announcement.

đŸ‡ș🇾 DOCUMENT 02 — FORTRESS America Implementation Memorandum

October 7, 2026

DefenseScoop obtained the memorandum from Under Secretary for Acquisition and Sustainment Michael Duffey directing officials to begin operationalizing the FORTRESS America Program Office.

It identifies five foundational pillars, including energy independence, installation hardening and cyber resilience, strategic reserves and supply-chain resilience.

Source type: Pentagon memorandum obtained by DefenseScoop.

đŸ‡ș🇾 DOCUMENT 03 — 90-Day FORTRESS Requirement

October 25, 2026

Fox News reports that documents it reviewed require major continental U.S. installations to sustain essential operations for at least 90 days without outside support.

Source type: Journalistic reporting based on documents reviewed by reporters.

Important: This is not currently being presented by Mind Bend Theory as a publicly released primary 90-day Pentagon document.

🇬🇧 DOCUMENT 04 — UK Cabinet Office Be Ready Announcement

October 22, 2026

The Cabinet Office announces the three-year Be Ready campaign and describes preparation for disruption affecting power, water, phones and internet.

Source type: Official UK government publication.

🇬🇧 DOCUMENT 05 — Parliamentary Written Statement HCWS409

October 22, 2026

The UK Parliament records the government's explicit recommendation that households prepare to remain self-sufficient for three days.

Source type: Official Parliamentary record.

🇬🇧 DOCUMENT 06 — Be Ready Household Emergency Checklist

The government's practical household guidance provides recommendations for water, food, radio, lighting, medication, power banks, emergency cash and other supplies.

Source type: Official UK government preparedness guidance.

🇼🇳 DOCUMENT 07 — Prime Minister of India / RBI Cybersecurity Facilities

October 25, 2026

Official statement documenting the opening of the Reserve Bank of India's Data Centre and Cybersecurity Training Institute and Modi's warning that countries can be weakened through attacks against their economies.

Source type: Official Government of India statement.

🇬🇧 DOCUMENT 08 — “Agents of Change” — Sarah Breeden

June 30, 2026

The Bank of England deputy governor discusses rapidly advancing AI cyber capabilities, simultaneous disruption across financial institutions, separate failover infrastructure and potentially rebuilding compromised systems from bare metal.

Source type: Official Bank of England speech.

DOCUMENT 09 — Bank of England Cyber-Recovery Reporting

October 15, 2026

Reuters reports on the Bank of England's push for stronger recovery capabilities against AI-enabled cyberattacks, including bare-metal recovery.

Source type: Independent reporting.

MIND BEND THEORY

Follow the documents. Separate what they prove from what they don't.

Then ask why the preparation is happening now.

Documents attached to the investigation

FORTRESS America — Sept. 30 memorandum record
Pentagon FORTRESS America implementation memorandum — DefenseScoop
FORTRESS America 90-day documents — Fox News investigation
UK Cabinet Office — Be Ready announcement
UK Parliament — Written Statement HCWS409
India PM's Office — RBI Data Centre & Cybersecurity Training Institute
Bank of England — Sarah Breeden, “Agents of Change”
Reuters — Bank of England cyber-recovery warning

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September 13, 2026
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Revolut Leak Shows the Cost of Constant ID Collection
Revolut’s mistake is the news, but the bigger problem is the growing number of companies being encouraged or required to keep copies of our most sensitive identity documents.

Online bank Revolut has revealed that it gave out sensitive personal and financial information of an undisclosed number of its customers in response to a fake government request.

The information that was handed over to an “unauthorized third party” reportedly includes names, dates of birth, occupations, addresses, phone numbers, account numbers, transaction histories (including Bitcoin), and even copies of government-issued IDs and onboarding verification selfies.

Revolut claims that derived biometric face data was not.

The company said that the data was handed over in response to an email that came from a real government agency’s domain, but was not actually sent or authorized by that agency.

The email passed several authentication checks (SPF, DKIM, and DMARC) that are designed to establish the authenticity of a message’s origin and integrity, but do not verify the legitimacy of the legal request itself.

Revolut said that it complied with the request “under the reasonable belief that it was an authentic government agency request” – and only later found out that it was not.

Revolut said it later realized its mistake, blocked the email address, and reported the incident to the relevant authorities.

Revolut said that only a “limited” number of its customers were affected by the data leak, and that the company’s systems were not hacked, nor was any money stolen.

The story broke on September 11 when Revolut customers started receiving an email notice about a data leak, and the news was picked up by media outlets the following day.

Revolut notice explaining customer identity and financial data was shared after an unauthorized government email request.

The reason this is a recurring problem is that companies are keeping highly sensitive information about their customers’ identities, and sometimes even financial transactions, for a long time, and this data is then available to be disclosed to third parties – either in response to valid legal requests, or, as in the case of Revolut, fake ones.

One reason for this is know your customer (KYC) and anti-money laundering (AML) rules. Revolut’s current UK customer privacy notice spells it out: the company generally keeps personal data of UK customers for no more than seven years after the relationship ends, and sometimes longer – for legal reasons.

This means that even if you close your account, your identity documents don’t disappear.

And while the incident with Revolut happened in the financial sector, it’s by no means the only one that requires customers to hand over sensitive identity information. Discord, a popular chat service, said in an October 9, 2025 security update that government ID photos of approximately 70,000 users may have been exposed after a third-party customer service provider got hacked.

This was not a financial service, nor the same type of attack. But the result was similar – because the underlying business process was the same: requiring and storing sensitive identity documents. In the case of Discord, these were used to review age-related appeals.

It’s hard to do anything about a copy of your old passport, or a photo of your face, or a record of your past transactions. These can be used to identify and profile you, and can be used to carry out targeted fraud. And this can happen even if the initial disclosure didn’t result in financial loss.

The more companies are forced to collect and store such information, and the more of it they have, the more opportunities there are for this data to be leaked, either by the company itself or a third party it works with. That's what makes governments' push for more ID checks just to access ordinary parts of life so reckless.

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This Is The Income A Family Needs To Live Comfortably In Every US State

Here’s the short version of what it takes for a family of four to live comfortably in 2026 by state:

In Massachusetts, you’d need nearly $330,000 a year - the highest figure in the entire country. Only three states clear the $300,000 mark: Massachusetts, Hawaii, and California. At the other end of the spectrum, Mississippi is the most affordable at about $188,000. That’s a full $142,000 less than what you’d need in Massachusetts.

So
 how much does a family of four need in your state?

This map shows the pre-tax income a household with two working adults and two kids needs to live comfortably in every U.S. state.

The numbers come from SmartAsset (as of February 2026). They’re based on the familiar 50/30/20 budget: 50% for necessities, 30% for discretionary spending, and 20% for savings or other goals. These aren’t bare-minimum survival numbers—they’re what it takes to live pretty well while still putting money aside.

And as Visual Capitalist notes, Massachusetts sits at the very top of that list. Massachusetts tops the ranking, with a family of four needing $329,555 per year to meet the 50/30/20 benchmark.

Hawaii follows at $313,165, while California ranks third at $302,682.

Rank State Income needed for family of four (2026)

  • 1 - Massachusetts - $329,555
  • 2 - Hawaii - $313,165
  • 3 - California - $302,682
  • 4 - Connecticut - $298,189
  • 5 - New Jersey - $295,110
  • 6 - New York - $291,533
  • 7 - Colorado - $283,213
  • 8 - Washington - $281,798
  • 9 - Oregon - $280,966
  • 10 - Vermont - $280,384
  • 11 - Alaska - $272,064
  • 12 - New Hampshire - $267,904
  • 13 - Rhode Island - $264,659
  • 14 - Minnesota - $263,078
  • 15 - Maryland - $257,837
  • 16 - Maine - $250,931
  • 17 - Montana - $249,434
  • 18 - Pennsylvania - $247,936
  • 19 - Illinois - $244,109
  • 20 - Virginia - $242,944
  • 21 - Nevada - $242,278
  • 22 - Indiana - $241,696
  • 23 - Wisconsin - $238,451
  • 24 - Arizona - $236,870
  • 25 - Utah - $235,789
  • 26 - Delaware - $228,134
  • 27 - Ohio - $226,221
  • 28 - Idaho - $226,054
  • 29 - Florida - $223,392
  • 30 - New Mexico - $223,142
  • 31 - Nebraska - $223,059
  • 32 - Missouri - $217,734
  • 33 - Georgia - $214,573
  • 34 - Michigan - $214,323
  • 35 - South Carolina - $212,909
  • 36 - North Carolina - $212,410
  • 37 - Wyoming - $212,410
  • 38 - Oklahoma - $211,910
  • 39 - North Dakota - $210,496
  • 40 - Kansas - $207,917
  • 41 - Iowa - $204,422
  • 42 - Texas - $203,424
  • 43 - West Virginia - $202,592
  • 44 - South Dakota - $201,760
  • 45 - Alabama - $198,931
  • 46 - Louisiana - $197,933
  • 47 - Tennessee - $197,267
  • 48 - Arkansas - $195,437
  • 49 - Kentucky - $194,854
  • 50 - Mississippi - $187,533

Connecticut, New Jersey, and New York aren't far behind, bringing the number of states with comfortable-income thresholds above $290,000 to six.

Colorado and Vermont Make the Top 10

As expected, many of the highest income thresholds are concentrated in the Northeast and along the West Coast.

However, Colorado has the seventh-highest threshold in the country at $283,213, ranking above Washington and Oregon.

Vermont rounds out the top 10 at $280,384, despite having the second-smallest population of any U.S. state. Meanwhile, nearby states like New Hampshire, Maine, and Rhode Island all fall outside the top 10.

Just Six States Come in Below $200,000

Despite the wide range in living costs across the country, only six states have a comfortable-income threshold below $200,000 for a family of four.

Mississippi ranks lowest at $187,533, followed by Kentucky. The states of Arkansas, Tennessee, Louisiana, and Alabama also fall below the $200,000 mark.

The gap between Massachusetts and Mississippi exceeds $142,000 per year, meaning the Massachusetts benchmark is about 76% higher.

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