It has been a while since we wrote much about cryptocurrencies. Still, it’s the gift that keeps on giving from an editorial perspective.

In late 2017, I was one of the loudest voices warning that bitcoin was a bubble (actually the greatest bubble in history, as it turns out) and a collapse was coming soon. I did an interview spelling this out and warning that bitcoin could go to $20,000 or higher (at a time when it was about $8,000) and then would collapse. That’s exactly what happened.

That interview got over 1 million hits on Facebook, so it reached a wide audience, but that didn’t stop the bubble from growing until it burst on its own, as they always do.

More recently, I warned that a “stable coin” called tether was likely a fraud. A stable coin is one that is linked to a major currency (in this case the U.S. dollar) in a fixed relationship. Tether is linked to the dollar in a one-for-one fixed exchange rate.

In theory, dollars paid for tethers are put in an escrow-like account and held so the tethers can be redeemed on demand at the fixed rate less minor transaction fees. Now it has been reported that the New York attorney general has alleged that the “dollar escrow” was diverted to another custodian to cover liquidity issues in a tether affiliate called Bitfinex.

The tether funds were transferred to a company called Crypto Capital, which established a line of credit for Bitfinex to help it meet customer redemption requests. Tether’s line of credit was secured by stock in another affiliate called iFinex, but the value of that collateral is in some doubt. Meanwhile, Bitfinex is still having difficulty meeting redemption requests and tether has had to acknowledge it does not have all the dollars it should.

Finally, it appears that the dollars on account at Crypto Capital have either been “lost” or “seized,” depending on whose story you believe. This is just one more black eye for the cryptocurrency community, which has been riddled with fraud, theft and bankruptcy since the start.

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