As new money rushes to trade and invest in cryptocurrency, activity is concentrated in a few power centers. Foremost among them is Bitfinex.
Bitfinex is far and away the world's largest bitcoin exchange. At the time of writing, the exchange had processed approximately $660 million on its BTC/USD trading pair over the previous 24 hours. This morning, bitcoin was valued at $11,702 on its BTC/USD trading pair, and cumulatively, Bitfinex accounted for 15.63 percent of the world's bitcoin trading volume.
By trading volume, Bitfinex is also the world's largest exchange for Ether, the cryptocurrency with the second-largest market cap ($44 billion). At the time of writing, the exchange had processed approximately $117 million on its ETH/USD trading pair over the previous 24 hours. This morning, Ether was valued at $453 on its ETH/USD trading pair, and cumulatively, Bitfinex accounted for a jaw-dropping 21.72 percent of the global Ether trading volume.
You don't have to be a genius to see that there's a lot of money passing through Bitfinex and its tiered fee schedule. As such, Bitfinex's transparency – or lack thereof – has come under fire. With links between Bitfinex and the embattled Tether (an unofficial digitized version of the US dollar, now embroiled in controversy) emerging from the Paradise Papers, an anonymous critic operating under the screen name "Bitfinexed" has accused the companies of misbehavior.
So who are the masterminds behind Bitfinex?
Bitfinex's Chief Strategy Officer is Phil Potter, an ex-employee of Morgan Stanley, who was fired for boasting about his lavish lifestyle to the New York Times.
Giancarlo Devasini serves as the exchange's Chief Financial Officer. In 1996, he was caught pirating and selling a substantial volume of Microsoft Software. Not terribly comforting.
But what about the exchange's Chief Executive Officer?
Apparently, Bitfinex's CEO is J. L. van der Velde, a Dutch man based in Hong Kong. In corporate documents, he is referred to as Jan Ludovicus van der Velde, but online, he is more frequently listed as Jean-Louis van der Velde.
None of the top three executives for Bitfinex have been made available for interviews. ETHNews reached out to Bitfinex for comment, but was directed to communications firm 5WPR.
Unfortunately, the CEO of the world's largest cryptocurrency exchange has left a surprisingly light digital footprint.
A Google Search returned Mr. van der Velde's sparse LinkedIn page with a semi-blurry headshot. Apparently, he studied at National Taiwan Normal University from 1985 until 1988, though a specific degree is not indicated. Van der Velde only has 116 connections and his work history includes Amos Ltd, Tuxia GmbH, and PAG Asia Inc – which appears to be Perpetual Action Group (Asia) Inc. There's not a lot of information floating around about these companies or their employees – past or present.
The PAG acronym can be surmised from a court filing dated April 5, 2017, which explains, "The owners of Tether Holdings Limited are Giancarlo Devasini, J.L. van der Velde, and DigFinex, Inc. DigFinex, Inc. is owned by J.L. van der Velde, Giancarlo Devasini, Paolo Ardoino, Phil Potter, Stu Hoegner, and Perpetual Action Group (Asia) Inc."
Further research turned up an executive profile for Mr. van der Velde on Bloomberg, but the information it provided was difficult to confirm. Even on Twitter, a search for Jean-Louis van der Velde returned surprisingly few results (none of which are recent).
Strangely, "JL Van Der Velde" is listed as the former CEO of Bitfinex on RocketReach. Thus far, we've been unable to explain this discrepancy.
But finally, after searching for "JL van der Velde" on YouTube, I found something encouraging.
An account for "J L van der Velde" posted several videos from National Day Celebrations in Hong Kong dated October 1, 2011. Of course, since Bitfinex is (at least nominally) based in Hong Kong, this looked promising.
(Side note: The username for this account is "snarfintel." "Snarf" could be an ode to the fictional character featured in ThunderCats, but it's more likely a reference to the computer programming term.)
This particular "J L van der Velde" on youtube is subscribed to six accounts affiliated with RT (formerly Russia Today) media and "kdenninger," an account for Karl Denninger, who is sometimes referred to as a founding member of the Tea Party movement.
Overall, tracking down information about J. L. van der Velde has proven extraordinarily difficult. Further research on social media turned up a few family members for J. L. van der Velde. Family photographs appear to confirm his existence.
It's great that we found evidence of a warm and loving home life in Mr. van der Velde's extended digital footprint, but the large amount of money at stake through Bitfinex and Tether raises serious questions.
Radio silence from executives and the lack of transparency regarding Bitfinex's finances appear troubling – for instance, the PR agency for Bitfinex and Tether is requiring that interested journalists sign a non-disclosure agreement before reviewing the exchange's books. It's important to know who's in the driver's seat at major financial institutions – and cryptocurrency exchanges like Bitfinex are no exception. People's livelihoods are on the line.