From Plastic Surgeon to Crypto Tycoon: Giancarlo Devasini's Rise Through Tether (USDT)

Due to his strong interest in cryptocurrencies, the author Zeke Faux conducted in-depth research and investigations on Tether (USDT)

In the rapidly evolving landscape of cryptocurrencies, Tether, the issuer of the largest stablecoin USDT, has frequently come under scrutiny for its opaque capital flow, frequent issuance, hacking incidents and mysterious capital operations, especially in Southeast Asia, where it has become a tool for illegal fund transfers.

However, Tether is still promoting projects such as the Bitcoin Bond Program to continuously expand its business territory.

This article will uncover the intricate financial operations and regulatory dilemmas behind the stablecoin Tether (USDT) in January 2021, when COVID-19 swept the world and the crypto market was booming.

It will also focus on senior management and capital flows, especially the background and operating methods of one of its actual controllers, Giancarlo Devasini, presenting a little-known financial experiment.

The project was originally conceived by Brock Pierce and named "Real Coin". Later, it joined hands with the offshore exchange Bitfinex to launch Tether in 2013, focusing on the stablecoin model of 1:1 US dollar reserves.

Since its inception, Tether has been questioned for its operating model: in the absence of perfect global supervision, its capital flow and asset reserve issues have always been secretive and complicated.

Tether not only provides key liquidity support for exchanges, but also plays the role of "the last straw" when the market is extremely volatile, but the bank relationship and fund management behind it are full of questions.

Giancarlo Devasini: From plastic surgeon to crypto tycoon

The core figure of Tether is Giancarlo Devasini, who was born in Turin, Italy in 1964. He is richer than Piero Ferrari.

Devasini's personal experience has seen ups and downs.

After graduating from the University of Pavia's Faculty of Medicine and Surgery in 1988, he practiced plastic surgery in Italy for several years.

Later, he switched to the field of electronic product import and software resale, and even involved in pirated software transactions.

It is reported that he quickly rose in the business world with his adventurous spirit and unconventional business methods, with a net worth of about US$9.2 billion, and his wealth once surpassed the top executives of well-known luxury car companies.

After reading the Bitcoin white paper, Devasini saw the huge potential of the crypto world, and subsequently invested in Bitfinex and gradually got involved in Tether’s business.

Eventually, through acquisitions and strategic layout, he controlled about 40% of Tether’s equity. His background and operating methods laid the groundwork for Tether’s business model and risk control.

In 2016, Bitfinex suffered the largest hacker attack in history, with about 119,800 bitcoins stolen, causing huge asset losses.

Faced with the crisis, Bitfinex took a 36% unified account deduction measure and issued debt tokens BFX to compensate users for losses.

The investigation pointed out that in this incident, the complex flow of funds between Tether and Bitfinex has raised greater doubts about the true reserve capacity of USDT.

At the same time, Tether also faces severe challenges in fund management. In 2017, the company deposited funds in several banks in Taiwan and other regions, but due to concerns about the crypto business among intermediary banks, many banks successively terminated cooperation, resulting in the funds being forced to stay.

Even when the bank account was frozen and the flow of funds was blocked, Tether still issued a large amount of USDT on the Bitcoin Omni Layer, which further questioned the authenticity of its 1:1 reserve.

Court files and regulatory investigations show that Tether itself has admitted that it is unable to use the traditional banking system normally. The fund operation model behind it is more like a "wealth game", using arbitrarily issued USDT to conduct large-scale asset allocation in the market, thereby manipulating the Bitcoin price to a certain extent.

In 2019, the New York Attorney General found a large number of complementary fund operations between Bitfinex and Tether when investigating the fund transactions between the two. Bitfinex once quietly misappropriated Tether’s reserves due to a gap in customer withdrawals, and Tether’s official website immediately deleted the promise of "1:1 USD reserve support".

Since then, Tether has reached settlements and fines with New York State and the U.S. Commodity Futures Trading Commission, paying $18.5 million and $42.5 million respectively, highlighting that its operating model has always been on the edge of regulation.

In addition, reports show that Tether keeps about a quarter of its funds (about $15 billion) in Delta Trust Bank, and it is said to hold up to $113 billion in U.S. Treasury bonds. This series of operations not only provides Tether with flexibility in fund allocation, but also