Thread by @PlainSite

This is a smoking gun e-mail. Since August 2019 at least, the California DFPI has known that Tether and similar "stable coins" pose a risk to anyone using the financial system. Yet Bob Venchiarutti has opted to do precisely nothing about it.

https://twitter.com/PlainSite/status/1404615143187574784

Then, in December 2020, Tether Limited registered with FinCEN—as it should have years earlier—as a Money Services Business under the Bank Secrecy Act. Two problems: it doesn't have state licenses required everywhere that Tethers are used, and it lied about where that is.

This is as brazen and consequential a violation of 18 U.S.C. 1960 as there ever has been: operation of an unlicensed money transmitting business. It's also a violation of the California Money Transmission Act. There is no DFPI or predecessor legal opinion exempting stable coins.

No one believes for a second that Tethers are only being used in Wyoming. Bob Venchiarutti should resign and everyone running DFPI should be investigated by the @CAStateAuditor for their exceptionally cozy relationship with VC-backed cryptocurrency companies. $COIN

PlainSite's existence in large part resulted from the difficulty of tracking the lawsuit its parent company, Think Computer Corporation, filed against Bob Venchiarutti in 2011 after he threatened @AaronGreenspan with jail time for building a plain old dollar-based payment system.

That lawsuit is one of several filed against Venchiarutti, including one filed by a former employee against him and his deputy. plainsite.org/dockets/8l0ick…

If Tether Limited were sending money from a grocery store to Somalia on behalf of Muslim immigrants with no license in CA its owners would already be serving time in federal prison. The violations of law here are *many* orders of magnitude larger. DFPI's failure is outrageous.

And after all, why regulate something fraudulent when you can get rich off of it yourself? Jan used to be the Commissioner of the DBO before it was renamed the DFPI. Now she's a lawyer in private practice advising the companies she used to regulate.

Correction: the top of this thread should have said that DBO knew about stable coin risk since August *2018*. That's why the "leader" in the e-mail is "Jan", above. She was Commissioner then.

(Bonus: the DFPI's new logo is especially deep with symbolism. You can see the pixels—your money—dissolving from the "I"-for-Innovation while the "P"-for-Protection stands by, unmoved.)

The DFPI's General Counsel just confirmed that there is no legal opinion in existence that would exempt stable coins from California money transmission regulation. The DFPI website also confirms that Tether lacks a California money transmission license. dfpi.ca.gov/money-transmit…

Paging Robert Venchiarutti...

CC: Janet Yellen, Jerome Powell, OCC, 49 other state money transmission commissioners, Senate Banking Committee, House Financial Services Committee, CSBS, MTRA, former officials in all the above positions...

https://twitter.com/TheStalwart/status/1405314875518296065