I’ve said for years that bitcoin is a fraud, a Ponzi and a bubble all at the same time. I based this on analysis of price activity and certain other technical analyses and some anecdotal evidence.

Critics have always demanded “proof” that bitcoin was a fraud with smoking-gun-type evidence. That was difficult at first because of the secretive nature of bitcoin trading. Yet now the evidence is arriving almost every day.

New hacks are reported, millions of dollars of bitcoin routinely go missing and exchanges are closing with no recourse for investors. What may be one of the biggest frauds in history, this one involving bitcoin, is now coming to light.

One cryptocurrency exchange called Bitfinex owes customers hundreds of millions of dollars in bitcoin held in their accounts. Bitfinex is nontransparent about the funds it actually has on hand and whether its customer funds are really safe.

Bitfinex sponsored another cryptocurrency called tether, which is tied to the U.S. dollar at a one-to-one fixed exchange rate. Customers give tether $1 (or the equivalent in another crypto) and receive one tether in return. The amounts paid for the tether are supposed to be held in reserve to back up the one-for-one promise. No one knows if tether has the funds or not. Tether recently parted ways with an auditor who was supposed to answer that question, so there is still no transparency.

It also seems that every time the price of bitcoin plunged, millions of tethers were issued out of thin air to prop up bitcoin on the Bitfinex exchange. All of this has raised suspicions that Bitfinex and tether are Ponzi schemes. Last week, as this article reports, the U.S. government sprang into action by hitting Bitfinex and tether with subpoenas demanding information about reserves and the safety of customer funds.

If it turns out the suspicions of fraud are correct, it could start a run on the bank in all cryptocurrency as holders and investors lose confidence in the crypto space generally. That would be bad enough but the greater fear is that panic in cryptocurrencies could spill over into regulated stock and bond markets and mark the beginning of another global financial panic.

If that happens, the only safe haven will be physical gold.