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from IT sales to shaking hands in Cryptoland – Crypto News

Tether’s CEO ran a company that faced a string of lawsuits in China for unpaid bills and fines for late tax payments before helping launch the controversial stablecoin at the heart of the crypto industry.

As crypto has moved from the fringes of finance to mainstream, investors increasingly rely on stablecoins, digital tokens backed by real assets to buy and sell volatile currencies like bitcoin.

But as Tether’s role in the crypto universe has increased since its inception in 2014 and $ 78 billion of its stablecoins are in circulation, this is also being reviewed by regulators. The rapid rise of the company has also put the public-shy CEO Jean-Louis van der Velde into the spotlight.

The career of the 58-year-old Dutchman, from IT sales in Hong Kong to the German software industry to a troubled Chinese electronics manufacturer, gives hardly any inkling of the important role he would later assume.

Legal and corporate records first reveal Van der Velde’s tenure with Huashun Electronics, a Shenzhen-based company that made products such as television receivers and amplifiers for export, which he acquired in 2006.

According to records from a Chinese court and court orders from data provider Tianyancha, from 2009 onwards, Huashun came under pressure from creditors chasing a growing pile of bills.

“The company was badly managed and could not return the money,” Yang Hebing, a creditor whose company supplied metal parts to Huashun, told the Financial Times.

Yang sued Huashun and van der Velde in 2012, but none responded, Shenzhen court records show.

Almost a decade later, van der Velde, who has lived much of his life in Hong Kong since leaving the Netherlands in his twenties to study in Taiwan, has continued to technically guide Huashun through an offshore company called Perpetual Action Group (Asia) Inc. or PAG Asia, attest Chinese government documents. The company also owns a piece of Tether.

Under the radar

Huashun’s business in China now appears to have been largely shut down and regulators have added it to their list of “seriously untrustworthy and illegal” companies, according to government documents, a designation that van der Velde, who continues to be chairman and legal representative remains, discourages them from running other businesses in China.

Today, van der Velde helps oversee tens of billions of dollars worth of assets at Tether, a far cry from the sums that Huashun was hunted a decade ago.

Tether is registered in the British Virgin Islands and issues a token of the same name, also known as USDT, which is pegged to the US dollar through reserves. Although Tether originally said it would hold reserves in cash, today its token is backed by assets like commercial paper, treasuries, and other digital tokens, according to the company.

The company was fined tens of millions of dollars this year by US regulators for its previous disclosures about its reserves. Last month, the U.S. Senate Banking Committee requested information from van der Velde about Tether’s operations as part of a broader investigation into stablecoins.

As US politicians race to gather more information on Tether, even some of the group’s largest customers say they have had little deals with the CEO.

Sam Bankman-Fried, the CEO of FTX, the Hong Kong-based cryptocurrency exchange recently valued at $ 25 billion, told the Financial Times earlier this year that he only met van der Velde once in person.

“In my opinion, he is less involved in the external operational aspect of the company than in the internal management and leadership,” said Bankman-Fried. Another cryptocurrency executive who had to do with Tether’s management put it more bluntly: “I don’t know much about JL and most people don’t.”

Van der Velde has a minimalist online presence, including a LinkedIn page that says he’ll never check it – “More hassle to shut it down,” the site says. He also has an old YouTube account called “snarfintel” where he has shown an interest in the Thai martial art, Muay Thai.

Although his name is Jean-Louis or JL, his formal name is Ludovicus Jan. He is also CEO of Bitfinex, a sister crypto exchange to Tether. An official Bitfinex bio states that he speaks five languages.

In a statement on questions asked by the Financial Times, Tether said that “instead of focusing on the importance of stablecoins, particularly Tether and its role within the crypto ecosystem, the questions seem to focus on the hopes, non-secrets of the past uncover a successful entrepreneur.

“Tether is focused on its long-standing commitment to transparency and its role as an industry leader and will not waste time answering questions unrelated to its business,” the company added.

A hardworking person

In the 1990s, van der Velde worked as a salesman in Hong Kong for Lung Electronics, a tech reseller whose products included VitalCool, which was supposed to turn addictive nicotine into healthy vitamins. Tether previously told the FT that he only sold his IT products.

In 1999 van der Velde switched to IGEL, a Linux software company that was taken over the previous year by Infomatec, a listed company in Germany that collapsed in 2001 due to allegations of fraud.

Van der Velde then co-founded Tuxia, which bought back the IGEL assets when Infomatec began to dissolve at the end of 2000. Tether previously told the FT that the former IGEL team formed Tuxia to buy back the company because of concerns about Infomatec’s management.

A curriculum vitae, which was submitted to the Chinese economic regulator in 2006 and viewed by the FT, states that van der Velde was “President of a listed company in Germany for many years” without specifying which one.

Holger Ippach, Chief Technology Officer of Tuxia and today Executive in Silicon Valley, recalled the cooperation with van der Velde as “consistently very positive” and described him as “a great colleague and a hard-working one”. Individually”.

In 2002 van der Velde left Tuxia. A company called Seki Technologies, which he founded the following year, hardly left any traces. He took control of Huashun in 2006 through PAG Asia, also a British Virgin Islands company and a sister company of a similarly named electronics company run by Monaco-based Giancarlo Devasini, CFO of Tether and Bitfinex.

Lots of trust there

PAG Asia “exported electronics products to large resellers like Best Buy and Tesco,” Tether previously told the FT, adding that Monaco PAG was independent from PAG Asia, although van der Velde and Devasini “had some degree of stake in both companies” .

One person familiar with their relationship said that Devasini, and not van der Velde, ultimately “runs” the show on Tether. “They have known each other for a long time,” added the person. “There is a lot of trust there.” Tether said they both play “important roles at Bitfinex and Tether”.

Devasini’s own business career before Tether has been in trouble at times, the FT previously reported, when one of his companies faced an alleged patent infringement lawsuit – a lawsuit he and the company dismissed – and his Milan-based companies after a fire in 2008 collapsed.

The following year, unpaid bills began to pile up in Huashun. When van der Velde took control, the company was producing around 3 million devices a year in a nondescript factory on the outskirts of Shenzhen.

A court first ordered Huashun to repay Rmb6825 ($ 1,068) to a creditor in 2009, according to Tianyancha court orders. As of June 2011, Huashun stopped paying Yang for the parts he received and nine months later he owed him about Rmb 64,000, according to separate Shenzhen court records.

When Yang sued, no one appeared in court or gave a written response to the claims, prompting a judge in Shenzhen to double the amount owed Yang. Yang told the FT that he never received full payment.

By 2013, Huashun had been sentenced to repayment of around Rmb 500,000 in more than a dozen judgments, the records show. The company was also fined a small amount for “illegal patent behavior” in 2012 and had to re-tax taxes with fines for late payments, according to Tianyancha’s records.

Although the records suggest that Huashun’s creditors were dissatisfied, others recall their relationship with van der Velde far more positively.

Shih-wei Liao, an associate professor at National Taiwan University who has known the Tether boss for more than 30 years, said van der Velde made a great contribution to the students of a jointly run blockchain course, particularly in ethics class.

“I’m scared of these CEOs telling our students that they can do AI and blockchain and make a lot of money. But he’s different, ”said Liao about van der Velde. “He gave his time and not just money.”

Additional reporting by Kathrin Hille in Taiwan and Xinning Liu in Beijing

kadhim.shubber@ft.com / sid.venkatarama@ft.com / ryan.mcmorrow@ft.com

Source: Crypto News Austria

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