Valuation of 500 billion USD? A deep dive into the rise of Tether, the "wolf king" of the crypto world.

Source: Mansa Finance Compiled by: LenaXin, ChainCatcher

Editor's Summary

On September 24, 2025, Tether, the world's largest stablecoin issuer, launched a new round of financing, aiming to raise $20 billion to reach a valuation of $500 billion, targeting tech giants like OpenAI and SpaceX. Behind this trillion-dollar empire stands a man who switched from medicine to business, the “Wolf King of the Crypto World” - Giancarlo Devasini.

This Italian, once described by classmates as “extremely ambitious and adventurous,” has transformed from a plastic surgeon into the godfather of cryptocurrency, rewriting the underlying logic of global finance with Tether. Today, USDT boasts a market value of $172 billion, overshadowing its peers, with giants like SoftBank and ARK Investment jumping into the fray. However, behind the glamour, controversies such as the Polish money laundering case, reserve misappropriation disputes, and regulatory crackdowns continue to loom.

What is the true origin of stablecoins? How do they siphon off bank deposits and weaken the effectiveness of monetary policy? How did Tether grow from a “gambling chip” into a behemoth that shakes the traditional financial system?

ChainCatcher is organized and compiled.

TL&DR

• The word “stable” means that the reserves must ensure 100% adequacy under any circumstances.
• Devasini controls both Tether and Bitfinex at the same time, which means that the person opening the casino, issuing chips, and sitting at the gambling table is all the same individual.
• Tether uses multi-chain deployment, and the first trader can usually only be found through issuance records. Once it circulates, it becomes difficult to trace, thus possessing strong privacy.
• The true origin of stablecoins is not a financial derivative designed by Wall Street elites, but rather the invention of a plastic surgeon who bought a washed-up actor's idea, launched as a gambling chip in the Bitcoin casino.
• Tether provides a payment and storage channel for global users that bypasses traditional financial systems.
• A major feature of financial markets is that confidence is often much more important than the truth.
• When stablecoins are used extensively, they divert deposits from the banking system, affecting the money multiplier effect, which in turn weakens the ability of central banks to manage the money supply by adjusting reserve requirements.
• Commercial banks are backed by central banks, while the entire backing of stablecoins comes solely from the reserves held by the stablecoin issuing company.

(1) The exchange is on the brink of collapse, who is embezzling 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 banks around the world have refused to provide services to cryptocurrency exchanges due to regulatory risk considerations.

(Note: CryptoCapital is humorously referred to as the central bank of the cryptocurrency world, and its main business is to handle funds for several well-known cryptocurrency exchanges.)

CryptoCapital discovered a management loophole in Poland by opening bank accounts under a large number of fictitious business names and depositing huge sums of money. This powerful money laundering capability not only facilitates cryptocurrency but has also attracted the attention of drug trafficking organizations.

Under coercion and temptation, the president of CryptoCapital used cryptocurrency to launder 400 million dollars for a drug trafficking organization. After the matter was exposed, CryptoCapital's bank accounts were frozen, affecting the cryptocurrency exchange.

Among the funds fully frozen by the Polish authorities, 850 million USD belongs to Bitfinex, the world's largest cryptocurrency exchange, indicating that Bitfinex has entered a state of insolvency. At that time, a large number of customers had heard the news and were rushing to withdraw their funds. Surprisingly, Bitfinex remained as steady as a rock, methodically handling every withdrawal request and quickly calming the crisis.

No one can understand how all of this is done.

The answer was revealed in 2019 during the New York Attorney General's investigation into Tether, the issuer of the world's largest stablecoin, Tether. When Bitfinex was in dire straits, Tether actually diverted $850 million from its reserves to support Bitfinex.

Tether (USDT) is a stablecoin pegged to the US dollar at a 1:1 ratio. The term stability means that the reserves must be 100% sufficient under any circumstances; otherwise, it cannot be called a stablecoin. The reason Tether is willing to take such a big risk to support Bitfinex is simple: the owners of both companies are actually the same person, who is Giancarlo Devasini.

During the Bitfinex crisis, DeWassini frantically sent text messages to the head of CryptoCapital urging the return of deposits. In one of the messages, DeWassini wrote that if you don't return the money to us soon, the entire cryptocurrency market will fall into crisis, and Bitcoin could crash below $1000. The materials released by the prosecutor include a large number of detailed records that fully expose DeWassini. As a major trading medium and unit of account for many cryptocurrencies like Bitcoin, Tether has a powerful impact on cryptocurrency prices.

Devasini simultaneously controls Tether and Bitfinex, which means that the person running the casino, issuing chips, and dealing at the table is all the same individual. An investor posted online stating that Giancarlo Devasini almost dominates all the pumps and dumps in the cryptocurrency space, and it was from that point that gamblers realized who the dealer was that was sitting at the center of power in the crypto world, harvesting them to the point of bankruptcy.

(2) Devasini: From Cosmetic Surgeon to Cryptocurrency Believer

Devasini was originally just a cosmetic surgeon, graduating from the University of Milan's medical program. His classmates described him as highly ambitious and adventurous, with his most notable trait being his exceptional business acumen.

In 1992, Devasini gave up a well-paying job as a cosmetic surgeon to establish a digital product company that specialized in importing computer components from Asia and then assembling and selling them in Italy. By assembling computers and selling CDs and DVDs, Devasini initially accumulated wealth. During this process, he was sued by Microsoft for selling counterfeit software, resulting in a settlement of $65,000 to Microsoft. This incident became an indelible stain on Devasini's reputation, to the extent that even today many people consider him a complete fraud.

As with many clichéd stories, Dewashini married an architect after achieving some success; the bride was a member of the globally renowned building materials group Bouchyuni Sam. This marriage allowed Dewashini to penetrate the upper class, after which his career began to take off. Dewashini established or had stakes in several IT electronic commerce companies, and around the year 2000, his annual income exceeded ten million euros, after which Dewashini divorced his wife.

Later, Dvashini heard about something called Bitcoin, and he immediately became crazily interested, to the extent that he posted on the Bitcoin forum, selling his company's unsold inventory of 20 million CDs and DVDs at a price of 0.01 Bitcoin each. At that time, the price of Bitcoin was very low, so Dvashini almost sold out all the disk inventory.

If he still held all the Bitcoins he received back then, those Bitcoins would now be worth billions of dollars. The Bitcoin market has allowed De Vascini to experience unprecedented pleasure and excitement; cryptocurrencies have satisfied all his imaginative space, and he firmly believes this is the future of the world. Just like when he abandoned his job as a cosmetic surgeon, and the wife who helped him enter the upper class, this time De Vascini decisively abandoned the digital products business he had run for over a decade, investing all his assets in the cryptocurrency field.

(3) The True Origin of Stablecoins

In 2012, Devasini acquired over 50% of the newly established cryptocurrency exchange Bitfinex, holding a low-profile title as CFO. Also in the gray area is the Tether company’s issuance of Tether. There are three co-founders of Tether, the most famous of whom is American child star Brock Pierce.

(Note: The mysterious company registered in the British Virgin Islands that operates Bitfinex always runs in a gray area, in a sense, it is a cryptocurrency casino providing trading and lending services for speculators.)

Around the year 2000, after stepping back from the chaotic entertainment industry, Pierce fell into great confusion and found a new lease on life in online gaming. He was amazed to discover that the loot obtained from defeating monsters in online games could actually be sold on eBay, which opened the door to quick 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 sense of connecting the virtual with the real fascinated Pierce immensely.

In 2013, Peers and two partners designed a product that could connect reality better than game loot, which is Tether. Tether uses multi-chain deployment and can generally only find the first trader through issuance records. Once it circulates, it is difficult to trace, thus providing strong privacy.

At its inception, Tether did not receive much attention, and very few people had a deep understanding of the currency operating system, making it difficult for the majority to grasp the significance of stablecoins. In fact, most of its initial users were criminals.

Around 2014, the U.S. police arrested several cryptocurrency founders on suspicion of money laundering, which made Pierce very worried, as he believed he could very well be the next person to be arrested. Therefore, he decided to sell his shares in Tether.

Strictly speaking, Tether is not a legally operating company, so it is difficult to find a buyer to take over. However, coincidentally, there is someone who is not afraid of breaking the law and sees the huge business opportunity that Tether offers. This person is Dewasini. He acquired a majority stake in Tether for just 500,000 dollars.

In January 2015, Tether officially launched on Bitfinex. Due to its stable price characteristics, Tether has become an excellent medium for exchanging fiat currency for cryptocurrencies, acting as a key node in trading functionality, and its issuance volume immediately showed explosive growth. In simpler terms, all gamblers entering the cryptocurrency casino must first exchange their fiat currency for Tether before they can take a seat at the table.

At this point, we should be able to understand the true origin of stablecoins. They are not financial derivatives designed by some Wall Street elite, but rather an invention by a plastic surgeon who purchased a faded actor's brand, introduced as 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 the operation of Tether, the market value exploded 5000 times in just three years, far beyond everyone's expectations. If it were merely to serve as a chip in a cryptocurrency casino, the issuance of Tether could not have achieved such astonishing growth.

As a crypto stablecoin pegged to the US dollar, Tether provides global users with a payment and storage channel that bypasses traditional financial systems. Whether for importers and exporters in South America or ordinary residents in Africa, they can complete cross-border fund transfers in a few minutes using just a smartphone, avoiding high fees and complex compliance processes.

Especially in countries where the local currency has severely depreciated, such as Venezuela, which once faced inflation rates of hundreds of thousands of percent, the local currency can become worthless overnight. In such cases, Tether has become the most practical tool for residents to hedge against risks. In many impoverished regions 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 realize. During the issuance of Tether, a massive influx of funds flowed into the hands of the issuer, and anyone with basic financial knowledge can realize that this powerful financial authority, with just a little utilization, can generate astonishing profits.

In Brock Pierce and others' initial utopian design, the Tether's 1:1 reserve model should be strictly realized with dollar deposits. However, Devasini disagrees; he believes that reserves should not be rigidly stuck in the account but should instead satisfy controllable risks. There is a significant difference between the two.

(5) The Reserve Controversy of Tether and Its Market Impact

Since 2016, Devasini has gradually shifted its reserve assets from US dollars to various assets such as US Treasury bonds, money market funds, and short-term commercial paper. This change has brought significant interest income to Devasini. Later, Devasini even invested its reserves in Bitcoin, commodity futures, and commercial paper issued by real estate companies, making this stablecoin practically 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 creating Tether coins out of thin air, then using the Tether to buy Bitcoin, and subsequently storing the Bitcoin assets in reserves. Devasini retains the profit from manipulating Bitcoin prices, issuing coins without backing them and then exchanging them for reserves.

This is the most serious accusation against Devasini to date, but no one has been able to verify it.

In the 2019 investigation by the New York State Attorney General into Tether, it was revealed that due to Tether's long history of operating on the edge of legality, there were no banks willing to cooperate with them for a considerable period of time, and existing bank accounts were frequently restricted, to the extent that Devasini even considered withdrawing cash multiple times and transporting the money back using a private jet.

However, during this period, Tether issued billions of new Tether coins. If there are no banks cooperating with them, how can the 1:1 reserve be achieved?

The facts revealed by the New York Attorney General are shocking: in reality, the billions of Tether 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 seem completely unconcerned, as the price of Tether briefly dipped and then quickly returned to normal.

After paying a $18.5 million fine, Devasini's Tether empire remains unshaken. A notable characteristic of financial markets is that confidence is often much more important than the truth. By 2022, the market value of Tether had grown to 150,000 times compared to 2015.

(6) How Stablecoins Divert Bank Deposits and Weaken the Effectiveness of Monetary Policy

In the lives of global residents and in cross-border transactions, Tether has had a huge impact on the traditional financial system, forcing governments around the world to pay attention. If a person can understand the money multiplier effect, they can understand 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 re-deposits in the banking system, ultimately results in a multiple expansion or contraction of the money supply in society (M0, M1, M2).)

When stablecoins are widely used, they will siphon deposits from the banking system, affecting the money multiplier effect, and thereby weakening the ability of central banks to manage the money supply by adjusting reserve ratios. Traditional bank lending may become more expensive, while stablecoins will create an interest rate pricing mechanism independent of the traditional banking system.

In cryptocurrency exchanges, stablecoins have long established independent lending functions, which are much more convenient than traditional financial systems.

In addition, the rapid growth of stablecoin reserves has also brewed a potential risk. We can assume that if Tether holders were to collectively issue withdrawal requests under some extreme circumstances, Devasini would have to rush to sell Tether's assets such as government bonds, funds, futures, commercial paper, etc., on the market in a short period of time. As long as the scale of reserves is large enough, it will inevitably lead to market turmoil.

The biggest difference between stablecoins and commercial banks is that commercial banks are supported by central banks. During the financial crisis of 2008, the Federal Reserve opened its discount window to several commercial banks in the United States, fulfilling its function as the lender of last resort for central banks. It can provide liquidity support to the traditional financial system in extreme situations, mitigating the risk of bank runs.

The entire support for stablecoins comes solely from the reserves held by the issuing company of the stablecoin. If DeVASini adopts a dollar deposit model, you could say it is as stable as a rock. If it involves government bonds or AAA-rated short-term commercial paper, you could say its risk is comparable to that of a money market fund. However, if DeVASini becomes insatiable in pursuit of greater profits and makes increasingly high-risk investments, then the reserves will devolve into a hedge fund.

(7) The Tether Defense Battle Under Regulatory and Competitive Pressure

In October 2021, the U.S. Commodity Futures Trading Commission fined Tether $41 million for misleadingly promoting the reserve composition of Tether, claiming that it was always backed 100% by equivalent U.S. dollars, but investigations found that only a small portion of Tether was backed by U.S. dollars, while the majority was supported by commercial paper and other assets.

Since then, Tether has been forced to increase transparency and gradually divest risky assets to be fully replaced by U.S. Treasury bonds.

Due to increasing regulatory pressure and challenges from competitors, especially in light of the pursuit by Circle, a company founded by Jeremy Allaire, which issues the USDC stablecoin, Tether's market share has seen a decline. However, by May 2025, Tether will still have over 350 million users worldwide, dominating the stablecoin market with a 66.7% market share.

De Vascini is now living in a modest three-bedroom apartment in the southern Swiss city of Lugano, but this is by no means a retreat. Beneath the deliberate silence, De Vascini remotely controls agents, with signals sent from the Alps to Washington, where he is currently engaged in a fierce battle with Ariel. The ultimate showdown between the rebels and the 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 reflect the personal positions of the original authors or interviewees, while the compiler maintains a neutral stance and does not endorse their accuracy. This does not constitute any advice or guidance in any professional field, and readers should exercise caution and independent judgment in their use. This compilation is solely for the purpose of knowledge sharing, and readers should strictly adhere to the laws and regulations of their respective regions and refrain from engaging in any illegal financial activities.