The $69 Billion Crypto Mystery

Hello, Zeke here. Tether is one of crypto's biggest mysteries. Revered by crypto traders, the stablecoin—which is supposed to be worth $1 because it's backed by real money—should have $69 billion in the bank. But for years, trolls have claimed it's not backed by anything at all. If they're right and it's a Ponzi scheme, it would be bigger than Bernie Madoff's.

For this week's Bloomberg Businessweek cover story, I set out to solve the Tether mystery. My reporting led me to some wild characters—a former child actor from The Mighty Ducks, the co-creator of Inspector Gadget, and an Italian ex-plastic surgeon—and to Miami and the Bahamas.

What I found calls into question the whole edifice behind all cryptocurrency markets: some cash, yes, but also trails of Chinese commercial paper and crypto-backed loans. Regulators in Washington have indicated Tether could be a risk to the real financial system. In the weeks ahead, we'll learn more about their thoughts on stablecoins. And we'll probably learn more about Tether yet, too. Click here to read my story or listen here. —Zeke Faux