This Week in Startups

Tether’s hidden billions with Bloomberg’s Zeke Faux + Startup Checklist E1 | E1300

Oct 8, 2021
In this engaging discussion, Zeke Faux, a Bloomberg reporter renowned for his investigative work in cryptocurrency, dives into the mysterious finances of Tether, revealing alarming insights about its risks and lack of transparency. He discusses Tether's controversial banking practices and challenges journalists face in uncovering its true financial standing. The conversation shifts to essential lessons for aspiring entrepreneurs, emphasizing the importance of customer obsession, financial planning, and resilience in building successful startups.
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ANECDOTE

Tether's Founder

  • Giancarlo DiVicini, Tether's leader, has a background in plastic surgery and import/export.
  • He transitioned into crypto by investing in an exchange and later acquiring a larger stake in Tether.
INSIGHT

Conflicting Incentives

  • Tether users want the coin to remain stable at $1, prioritizing low risk.
  • DiVicini, controlling Tether, is incentivized to invest reserves for profit, creating a conflict of interest.
ANECDOTE

Tether: A Hedge Fund?

  • John Betts, a banker who worked with Tether, compared it to a high-risk hedge fund.
  • He believes Tether misrepresents the risks involved to its users.
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