Tether moves HQ; Bitfinex messes with Trump’s BTC plans

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Tether is moving to El Salvador, where its stablecoin is celebrated for something other than being the common currency of bad actors.

On January 13, Tether announced that it and its subsidiaries “are about to complete all formalities to relocate to El Salvador.” The move follows the country’s National Commission of Digital Assets (CNAD) issuing Tether a Digital Asset Service Provider (DASP) license and a stablecoin issuer permit last August.

Tether cited El Salvador’s embrace of BTC as part of the reason behind its move, but Tether execs—including CEO Paolo Ardoino and iFinex CFO/co-founder Giancarlo Devasini—are known to be tight with the country’s authoritarian President Nayib Bukele.

Ardoino called the move “a natural progression for Tether as it allows us to build a new home.” Ardoino meant ‘home’ literally, as local media outlet El Faro published a report last week about the growing numbers of crypto bros building homes in El Salvador, including both Ardoino and Devasini.

Ardoino, who has also acquired Salvadoran nationality, paid $1.7 million last July for two plots of land in a residential development known as El Encanto in the San José Villanueva district. Last March, Devasini paid $2 million for a house in the capital San Salvador.

Ardoino tweeted a link to a Bukele speech in which he noted that Tether’s current $137 billion market cap is 4x El Salvador’s annual gross domestic product. Bukele said Tether’s move would encourage other tech firms to do likewise, and he may not have long to wait.

In December, Tether announced a $775 million ‘strategic investment’ in right-wing video-sharing platform Rumble (NASDAQ: RUM). On January 10, Rumble announced a “cloud services agreement” with El Salvador’s government, leading Bukele to tweet a few days later that Rumble “should move your headquarters here too.”

Ardoino claimed in the tweet that his company “will build our Tether Tower in San Salvador.” It’s unclear whether this ‘tower’ is a metaphor for the company’s growing presence in El Salvador, or whether Devasini has his eye on an even more grandiose crib. Or maybe they just need someplace high enough to throw themselves off when the inevitable indictments are unsealed.

Bukele referenced the tower in his speech, calling it “a skyscraper” and expressing hope that it will be “full of people,” preferably some local residents among them. But Tether is infamously payroll-light, so if they do hire any locals, it likely won’t be for anything important.

Done with virgins

Tether’s previous HQ was in the British Virgin Islands (BVI), which offers a 0% tax rate to entities that establish a local presence. Until recently, El Salvador imposed a 30% tax on income from foreign securities, which would have claimed $3 billion of the $10 billion profit that Tether claims to have made last year. But it seems El Salvador quietly amended its tax code last March to exempt “income obtained abroad” from taxation.

However, the digital asset legislation that El Salvador approved in January 2023 requires stablecoin issuers to submit copies of their “auditor’s report” within six months of the end of their financial year. With Tether getting its stablecoin permit last August, this report will be due in June or July.

Tether has never allowed a comprehensive independent audit on the reserve assets backing the over $137 billion in issued USDT. Instead, Tether has released quarterly ‘attestations’ that attest only to the presence of certain assets in certain accounts on a single day of each quarter.

Tether and its sister company, Bitfinex, have been caught doing the hokey-pokey with assets in the past, transferring hundreds of millions of dollars to cover up a fiscal shortfall at one end, then returning the same assets the day after the inspections are over.

Call us cynics, but somehow we suspect the coziness between Bukele and Tether execs means that won’t matter, and Tether’s attestations will qualify as an ‘audit’ when push comes to shove.

Bitfinex suddenly loves American justice

Speaking of Bitfinex, the company appears to be in for an unexpected windfall. On January 14, the U.S. Department of Justice (DOJ) told a federal judge that it was appropriate to return 94,643 BTC tokens to the exchange as an “in-kind restitution.”

The tokens were seized by the DOJ in 2022 following the arrest of two individuals involved in the 2016 hack of Bitfinex. The tokens were worth only around $72 million when they were stolen but are now worth over $9 billion.

Following the hack, Bitfinex stayed afloat by imposing a 36% haircut on all customer account balances. The exchange covered the difference by issuing customers corresponding amounts of in-house tokens, some of which were redeemed for cash, while other customers opted for shares in Bitfinex’s parent company, iFinex.

As such, the DOJ figures there are no ‘victims’ here other than Bitfinex, making it appropriate to return the hacked BTC to the exchange. That’s not necessarily the view of some customers who claim they would have held on to their BTC like grim death and thus would have enjoyed their massive price appreciation since 2016.

Third parties who believe they have some claim on the BTC in question have been given until January 28 to file objections to the transfer to Bitfinex. Weirdly, those potential objectors may include Donald Trump, who promised on the campaign trail to use the government’s roughly 210,000 seized BTC as the basis for his ‘strategic stockpile.’

The Bitfinex tokens represent nearly half the government’s current stash. Worse, the DOJ recently received court permission to sell 69,370 of these tokens seized via the investigation of another hack, this one involving the now defunct Silk Road dark web marketplace.

All told, the government’s BTC vaults could soon be nearly bare. But iFinex might finally have the money it needs to build a really, really big San Salvadoran tower. Still, if we were Bukele, we’d be scanning the sky for drones any time after Trump takes his oath of office on January 20.

These pigs aren’t going to butcher themselves

While Tether celebrates its Central American inroads, its global reputation as the ‘crime coin’ of choice got a boost from new data showing stablecoins accounting for nearly two-thirds of all illicit blockchain transaction volume last year.

Blockchain data analysts Chainalysis recently previewed their 2025 ‘crypto crime report,’ which found that stablecoins accounted for 63% of illicit transaction volume last year. And since Tether is the unquestioned stablecoin market leader, you can safely assume that the United Nations wasn’t wrong in declaring that USDT is the grease that keeps the crypto crime gears turning.

Chainalysis said ‘pig butchering’ was among 2024’s “most successful fraud and scam types.” Tether’s name is almost synonymous with ‘pig butchering’ scams, with a U.S. deputy district attorney declaring last year that, when it comes to pig butchering, “It’s always, always, always Tether. I’ve never heard of pig butchering that isn’t Tether.”

Tether’s name was front and center in last year’s exposé of Huione Guarantee, the Cambodia-based online marketplace that serves as a one-stop shop for pig butchering scammers looking for tools of the trade, including shock-collars for the human slaves forced to work the phones/computers of these scams.

Tether’s USDT was the common currency of this rogues’ gallery, but blockchain analysts Elliptic released a report this week that detailed how Huione recently launched its own dollar-denominated stablecoin (USDH) that is not “restricted by traditional regulatory agencies.”

Tether has made much of its ability to bolt the doors long after the cows have fled, freezing wallets containing USDT only after they’re flagged by law enforcement agencies—at least, the ones that Tether deems to have sufficient muscle to cause problems down the road. But what’s less laudatory is the fact that Tether appears to have had no idea of—or no problem with—the illicit actors until the media shone their investigative flashlight on the problem.

As Bart Simpson famously observed, “c’mon, snipers, where ARE you?”

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