Source: Mansa Finance
Compiled by: LenaXin, ChainCatcher
Summary from ChainCatcher Editor
On September 24, 2025, Tether, the world’s largest stablecoin issuer, launched a new round of financing, planning to raise $20 billion to achieve a $500 billion valuation, targeting tech giants like OpenAI and SpaceX. Behind this trillion-dollar empire stands a “wolf king” of the crypto world who switched from medicine to business—Giancarlo Devasini.
This Italian, once described by classmates as “extremely ambitious and adventurous,” transformed from a cosmetic surgeon to the godfather of cryptocurrency, rewriting the underlying logic of global finance with Tether. Today, USDT, with a market cap of $172 billion, crushes its competitors, attracting giants like SoftBank and Ark Invest. However, behind the glamour, controversies such as the Polish money laundering case, reserve fund misappropriation, and regulatory crackdowns have always loomed.
What is the true origin of stablecoins? How do they divert bank deposits and weaken the effectiveness of monetary policy? How did Tether grow from a “gambling chip” to a giant shaking the traditional financial system?
ChainCatcher has organized and compiled this information.
TL&DR
- The term “stable” means that reserves must always be 100% sufficient under any circumstances.
- Devasini controls both Tether and Bitfinex, meaning the one running the casino, issuing chips, and sitting at the table is the same person.
- Tether uses multi-chain deployment, generally only allowing the first trader to be traced through issuance records, making it difficult to track once in circulation, thus providing strong privacy.
- The true origin of stablecoins is not a financial derivative designed by Wall Street elites, but rather a cosmetic surgeon buying an invention from a washed-up actor, launching a gambling chip in the Bitcoin casino.
- Tether provides a payment and storage channel for global users to bypass the traditional financial system.
- A significant feature of financial markets is that confidence is often much more important than the truth.
- When stablecoins are widely used, they divert bank system deposits, affecting the money multiplier effect, thereby weakening the central bank’s ability to manage the money supply by adjusting reserve ratios.
- Commercial banks are supported by central banks, while the only support for stablecoins comes from the reserves held by the issuing company.
(1) Exchanges on the Brink of Collapse: Who is Misappropriating Huge Sums Behind the Scenes?
In the summer of 2018, Polish police seized the bank accounts of CryptoCapital, the world’s largest cryptocurrency payment processing company. For a long time, major global banks have refused to provide services to cryptocurrency exchanges due to regulatory risks.
(Note: CryptoCapital is a well-known service provider in the cryptocurrency world, humorously referred to as the central bank of cryptocurrencies, primarily handling funds for several well-known cryptocurrency exchanges.)
CryptoCapital found management loopholes in Poland, opening bank accounts under fictitious company names and depositing huge sums of money. This powerful money laundering capability not only opened doors for cryptocurrencies but also attracted the attention of drug trafficking groups.
Under threats and inducements, the president of CryptoCapital used cryptocurrency to launder $400 million for drug trafficking groups. After the incident was exposed, CryptoCapital’s bank accounts were frozen, affecting cryptocurrency exchanges.
Among the $850 million frozen by Polish authorities, $850 million belonged to Bitfinex, the world’s largest cryptocurrency exchange, indicating that Bitfinex was in a state of insolvency. At that time, a large number of customers heard the news and rushed to withdraw their funds. Surprisingly, Bitfinex remained rock solid, methodically handling every withdrawal request and quickly calming the crisis.
No one could understand how all this was accomplished.
The answer was revealed in 2019 during the New York Attorney General’s investigation into Tether, the issuer of the world’s largest stablecoin. When Bitfinex was in dire straits, Tether actually misappropriated $850 million from the reserves of Tether to support Bitfinex.
Tether (USDT) is a stablecoin pegged 1:1 to the US dollar, and the term “stable” means that reserves must always be 100% sufficient under any circumstances, otherwise it cannot be called a stablecoin. The only reason Tether was willing to take such a big risk to support Bitfinex was that the owners of the two companies were actually the same person—Giancarlo Devasini.
During the Bitfinex crisis, Devasini frantically sent text messages to the head of CryptoCapital demanding deposits, one of which stated that if the money was not returned, the entire cryptocurrency market would fall into crisis, and Bitcoin could crash below $1,000. The materials released by the Attorney General included a large number of detailed records that fully exposed Devasini. As a major trading medium and pricing unit for Bitcoin and many other cryptocurrencies, Tether has a powerful impact on cryptocurrency prices.
Devasini controls both Tether and Bitfinex, which means the one running the casino, issuing chips, and sitting at the table is the same person. An investor posted online stating that Giancarlo Devasini almost controls all the pump and dump activities in the cryptocurrency world, and it was from that moment that gamblers realized who the dealer sitting at the center of power in the crypto world was, who was harvesting them to bankruptcy.
(2) Devasini: From Cosmetic Surgeon to Cryptocurrency Believer
Devasini was initially just a cosmetic surgeon, graduating from the University of Milan’s medical program, with classmates describing him as extremely ambitious and adventurous, with a remarkable business acumen.
In 1992, Devasini gave up his well-paid job as a cosmetic surgeon to establish a digital product company, specializing in importing computer components from Asia and then assembling and selling them in Italy, through assembling computers and selling CDs and DVDs. Devasini initially accumulated wealth during this process, and he was once sued by Microsoft for selling counterfeit software, settling with Microsoft for $65,000. This incident became an indelible stain on Devasini’s history, leading many to believe he was a complete fraud.
Like many cliché stories, after achieving modest success, Devasini married an architectural designer who was a member of the family of the globally renowned building materials group Burchiuni Saim. This marriage allowed Devasini to enter the upper class, and his career began to take off. Devasini established or invested in several IT and electronic commerce companies, and by around 2000, his annual income exceeded 10 million euros, after which Devasini divorced his wife.
Later, Devasini heard about something called Bitcoin, and he immediately became crazily interested, even posting on Bitcoin forums to sell 20 million unsold CDs and DVDs from his company at a price of 0.01 Bitcoin each. At that time, Bitcoin’s price was very low, so Devasini almost sold all his CD inventory.
If he still held all the Bitcoin he received back then, it would now be worth tens of billions of dollars. The Bitcoin market allowed Devasini to experience unprecedented joy and excitement, and cryptocurrency satisfied all his imaginative space, he firmly believed this was the future of the world. Just as he had previously abandoned his job as a cosmetic surgeon and his wife who helped him enter the upper class, this time Devasini decisively abandoned the digital products he had been running for over a decade, investing all his assets into the cryptocurrency field.
(3) The True Origin of Stablecoins
In 2012, Devasini bought over 50% of the newly established cryptocurrency exchange Bitfinex, holding a low-profile title as CFO. Tether, the company issuing Tether, was also operating in a gray area. The co-founders of Tether included three people, the most famous of whom was American child star Brock Pierce.
(Note: The mysterious company registered in the British Virgin Islands, Bitfinex, has always operated in a gray area, and in a sense, it is a cryptocurrency casino providing trading and lending services for speculators.)
Around 2000, after withdrawing from the chaotic entertainment industry, Pierce fell into great confusion and found new life in online gaming. He was amazed to discover that loot obtained from monsters in online games could actually be sold on eBay, opening the door to fast payments for him.
In 2001, Pierce established a virtual goods sales company for games and rented an office in Jing’an District, Shanghai. At its peak, he employed 400,000 people to farm monsters. Ultimately, Pierce earned millions of dollars through this company. This feeling of connecting the virtual and the real fascinated Pierce.
In 2013, Pierce and two partners designed a product that could connect reality even more than game loot, which was Tether. Tether uses multi-chain deployment, generally only allowing the first trader to be traced through issuance records, making it difficult to track once in circulation, thus providing strong privacy.
At its inception, Tether did not receive much attention, and very few people had a deep understanding of the monetary operating system, making it hard for most to grasp the significance of stablecoins. In fact, its initial users were mostly criminals.
Around 2014, U.S. police arrested several cryptocurrency founders on charges of money laundering, which greatly worried Pierce, who feared he might be the next to be arrested. So he decided to sell his shares in Tether.
Strictly speaking, Tether was not a legally operating company, making it difficult to find a buyer, but coincidentally, someone who was not afraid of breaking the law and saw the enormous business opportunity in Tether emerged—Devasini. He acquired the majority of Tether’s shares for just $500,000.
In January 2015, Tether officially launched on Bitfinex. Due to its stable price characteristics, Tether became an excellent medium for exchanging fiat currency for cryptocurrencies, serving as a key node for trading functions, and its issuance volume immediately showed explosive growth. In simpler terms, all gamblers entering the cryptocurrency casino must first exchange fiat currency for Tether before sitting at the table.
At this point, we should be able to understand the true origin of stablecoins, which is not a financial derivative designed by Wall Street elites, but rather a cosmetic surgeon buying an invention from a washed-up actor, launching a gambling chip in the Bitcoin casino. It flowed from the gambling table to the streets, until it shook the global monetary system.
(4) The Formation of the Tether Empire
From 2015 to 2018, under Devasini’s operation, Tether’s market value expanded 5,000 times in just three years, far exceeding everyone’s expectations. If it were merely serving as a chip for the cryptocurrency casino, the issuance volume of Tether could not have achieved such astonishing growth.
As a crypto stablecoin pegged to the dollar, Tether provides a payment and storage channel for global users to bypass the traditional financial system, whether for importers and exporters in South America or ordinary residents in Africa, who can complete cross-border fund transfers in minutes with just a smartphone, avoiding high fees and complex compliance processes.
Especially in countries with severe local currency devaluation, such as Venezuela, which once faced inflation rates in the hundreds of thousands, where the local currency turned to worthless paper overnight. In such cases, Tether became the most realistic tool for residents to hedge against risks. In many impoverished areas around the world, many people do not have bank accounts, but they know how to operate smartphones.
Tether achieved financial inclusivity that traditional financial systems could not. During the issuance of Tether, massive amounts of capital flowed into Devasini’s hands, and anyone with basic financial knowledge could realize that this powerful financial power could generate astonishing returns with just a little manipulation.
In the initial utopian design by Brock Pierce and others, Tether’s 1:1 reserve model was supposed to be strictly backed by dollar deposits. However, Devasini did not think so; he believed that reserves should not be rigidly kept in accounts but should meet controllable risks. There is a significant difference between the two.
(5) The Controversy Over Tether’s Reserves and Market Impact
Starting in 2016, Devasini gradually shifted reserve assets from dollars to various assets such as U.S. Treasury bonds, money market funds, and short-term commercial paper. This change brought Devasini huge interest income. Later, Devasini even invested reserve funds in Bitcoin, commodity futures, and commercial paper issued by real estate companies, making this stablecoin effectively less stable.
Professor Griffin from the University of Texas believes that various data indicate Tether is likely manipulating Bitcoin prices through the issuance of additional Tether coins. His research essentially accuses Devasini of issuing Tether out of thin air, then using Tether to buy Bitcoin, and subsequently depositing Bitcoin assets into reserves. Devasini would then keep the price difference earned from manipulating Bitcoin prices, issuing coins without backing them with reserves.
This is the most serious accusation against Devasini to date, but no one has been able to verify it.
In the 2019 New York Attorney General’s investigation of Tether, it was revealed that due to Tether’s long-standing operation on the edge of legality, for a considerable period, no banks were willing to cooperate with it, and existing bank accounts were repeatedly restricted, to the extent that Devasini even considered withdrawing cash and transporting it back via private jet.
However, during this period, Tether still issued tens of billions of Tether coins. If there were no banks cooperating with it, how could the 1:1 reserve be realized?
The facts disclosed by the New York Attorney General were astonishing: In fact, the tens of billions of Tether coins issued during this period had no reserves at all. If this were in the traditional financial market, it would be enough to destroy any world-class company. However, Tether holders seemed unconcerned, with the price of Tether briefly dipping before quickly returning to normal.
After paying a $18.5 million fine, Devasini’s Tether empire remained unshaken. A significant feature of financial markets is that confidence is often much more important than the truth. By 2022, Tether’s market value had increased to 150,000 times that of 2015.
(6) How Stablecoins Divert Bank Deposits and Weaken Monetary Policy Effectiveness
In the lives of global residents and cross-border transactions, Tether has had a tremendous impact on the traditional financial system, forcing governments to pay attention. If a person can understand the money multiplier effect, they can grasp the significant impact of stablecoins on the traditional financial system.
(Note: The money multiplier effect is an economic principle that describes how the initial amount of money provided by the central bank, through multiple deposits, loans, and redeposits in the banking system, ultimately leads to a multiple expansion or contraction of the social money supply (M0, M1, M2).)
When stablecoins are widely used, they divert bank system deposits, affecting the money multiplier effect, thereby weakening the central bank’s ability to manage the money supply by adjusting reserve ratios. Traditional bank lending may become more expensive, while stablecoins will form an interest rate pricing mechanism independent of the traditional banking system.
In cryptocurrency exchanges, stablecoins have long formed an independent lending function, far more convenient than the traditional financial system.
Moreover, the rapid growth of stablecoin reserves also breeds a potential risk. We can assume that if Tether holders collectively issue withdrawal requests under some extreme circumstances, Devasini would have to sell Tether’s holdings of Treasury bonds, funds, futures, commercial paper, and other assets into the market within a short period. As long as the reserve scale is large enough, it will inevitably trigger market turmoil.
The biggest difference between stablecoins and commercial banks is that commercial banks are supported by central banks. During the 2008 financial crisis, the Federal Reserve opened discount windows to several U.S. commercial banks, fulfilling the role of the central bank as the lender of last resort, providing liquidity support to the traditional financial system in extreme situations to curb the risk of bank runs.
The only support for stablecoins comes from the reserves held by the issuing company. If Devasini adopts a dollar deposit model, you could say it is rock solid. If it is Treasury bonds or AAA-rated short-term commercial paper, you could say its risk is equivalent to that of a money market fund. If Devasini, driven by greed for more profits, makes increasingly high-risk investments, then the reserves will become akin to a hedge fund.
(7) The Defense of Tether Under Regulatory and Competitive Pressures
In October 2021, the U.S. Commodity Futures Trading Commission fined Tether $41 million for falsely advertising the reserve status of Tether, claiming it was always 100% backed by equivalent dollars, but investigations found that only a small portion of Tether was backed by dollars, with the rest being commercial paper and other assets.
Subsequently, Tether was forced to increase transparency and gradually divest risk assets, fully replacing them with U.S. Treasury bonds.
Due to increasing regulatory pressure and challenges from competitors, especially under the siege of USDC issued by Jeremy Allaire’s Circle, Tether’s market share has declined, but as of May 2025, Tether still has over 350 million users globally, dominating the stablecoin market with a 66.7% market share.
Devasini now resides in a modest three-room apartment in Lugano, southern Switzerland, but this is by no means a retreat. In deliberate silence, Devasini remotely controls agents, sending signals from the Alps to Washington, where he is currently engaged in a fierce battle with Allaire, and the ultimate showdown between rebels and model students will determine the future direction of the global stablecoin market.
Disclaimer
The content of this article does not represent the views of ChainCatcher. The opinions, data, and conclusions in the text represent the personal stance of the original author or interviewee. The compiler maintains a neutral stance and does not endorse its accuracy. It does not constitute any professional advice or guidance, and readers should exercise caution based on independent judgment. This compilation is for knowledge-sharing purposes only; readers should strictly comply with the laws and regulations of their respective regions and refrain from participating in any illegal financial activities.
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