CEO of Tether: from IT sales to legends in Kryptoland

The CEO of Tether headed a company that was confronted in China with a number of legal proceedings for unpaid bills and fines for late tax payments before helping to bring the controversial stable coin in the heart of the crypto industry.

Since Krypto has developed from the outskirts of financial system to the mainstream, investors are increasingly relying on stable coins, digital tokens covered by real assets to buy and sell volatile currencies such as Bitcoin.

But since the role of Tether in the crypto universe has increased since its foundation in 2014 and $ 78 billion of its stable coins are in circulation, this is also checked by the supervisory authorities. The company's rapid ascent also brought the publicly shy CEO Jean-Louis van der Velde into the spotlight.

The career of the 58-year-old Dutch from IT sales in Hong Kong to the German software industry to a battered Chinese electronics manufacturer hardly suggests the significant role later.

Legal and corporate documents for the first time provide information about van der Velde's term at Huashun Electronics, a company based in Shenzhen, which made products such as television recipients and amplifiers for export and which he took over in 2006

According to the records of a Chinese court and court decision of the data provider Tianyancha, Huashun came under pressure from creditors from 2009 who chased a growing stack of invoices.

"The company was led poorly and could not pay the money back," said Yang Hebing, a creditor whose company delivered metal parts to Huashun, the Financial Times.

yang sued Huashun and van der Velde in 2012, but nobody reacted, as court files in Shenzhen show.

Almost a decade later, van der Velde, who spent a large part of his life in Hong Kong, since he left the Netherlands in his twenties to study in Taiwan, Huashun continued to provide technically through an offshore company called Perpetual Action Group (Asia) Inc. or PAG Asia. The company also has a piece of Tether.

Under the Radar

The business of Huashun in China now seems to be largely closed and the supervisory authorities have included it in their list of “seriously not trustworthy and law -violating” companies, as can be seen from government documents, a term that van der Velde, the chairman and legal representative remains, to keep other companies in China.

Today, van der Velde helps to monitor assets worth several $ 10 billion at Tether, far from the sums that Huashun was chased a decade ago.

tether is registered on the British maiden islands and spends a token of the same name, also known as USDT, which is coupled to the US dollar via reserves. Although Tether originally said that it would keep reserves in cash, his token is now covered by assets such as commercial paper, treasuries and other digital tokens.

The company was occupied this year by the US supervisory authorities because of its previous disclosures about its reserves with a fine of several $ 10 million. Last month, the US Senate banking committee called for information from Van der Velde about the operations by Tether.

While US politicians races to collect more information about Tether, some of the group's largest customers say that they had only a few business with the CEO.

Sam Bankman-Fried, the CEO of FTX, the cryptocurrency exchange based in Hong Kong with a value of $ 25 billion, said the Financial Times at the beginning of the year.

"In my opinion, he is less involved in the company's external workpekt as it is more into internal management and leadership," said Banksman-Fried. Another cryptocurrency leadership that had to do with the management of Tether expressed it more bluntly: "I don't know much about JL and most people."

van der Velde has a minimalist online presence, including a LinkedIn page on which it says that he never checks it-"more effort to close it," it says on the page. He also has an old YouTube account under the name "Snarfintel", where he showed interest in the Thai martial art Muay Thai.

Although it is called Jean-Louis or JL, his formal name Ludovicus Jan. He is also CEO from Bitfinex, a sister crypto exchange from Tether. In an official Bitfinex biography it says that he speaks five languages.

In an explanation of questions of the Financial Times, Tether said that “instead of the importance of stable coins, especially Tether and his role within the crypto ecosystem, the questions seem to be directed to reveal non-secrets from the past.

"Tether focuses on his many years of commitment to transparency and his role as an industry leader and will not waste time to answer questions that have nothing to do with his business," added the company.

a hardworking person

In the 1990s, van der Velde worked as a seller in Hong Kong for Lung Electronics, a tech reseller, whose products belonged to Vitalcool, which was supposedly addictive nicotine into healthy vitamins. Tether said the FT beforehand that he only sold his IT products.

1999 Van der Velde zu Igel, a Linux software company that was taken over by Infomatec last year, changed a listed company in Germany that collapsed in 2001 due to accusations of fraud.

van der Velde was then a co-founder of Tuxia, which bought the hedgehog berthet back, when Infomatec started to dissolve at the end of 2000. Tether said the FT beforehand that the former hedgehog team Tuxia had founded to buy back the company because it had concerns about the management of Infomatec.

A curriculum vitae that was submitted to the Chinese Economic Supervisory Authority in 2006 and viewed by the FT states that Van der Velde was "many years president of a listed society in Germany" without specifying which.

Holger Ippach, Chief Technology Officer from Tuxia and today Executive in Silicon Valley, remembered the collaboration with van der Velde as "consistently very positive" and described him as "a great colleague and a hardworking". Individual “.

2002 left Van der Velde Tuxia. A company called Seki Technologies, which he founded the following year, has hardly left any traces. He took control of Huashun in 2006 via PAG Asia, also a company on the British Virgin Islands and a sister company of a similarly named electronics company, which is managed by Giancarlo Devasini, the CFO of Tether and Bitfinex.

A lot of trust there

pag Asia "exported electronic products to large resellers such as Best Buy and Tesco," said Tether beforehand, adding that Monaco Pag was independent of Pag Asia, although van der Velde and Devasini "had a certain level of participation in both companies".

A person who is familiar with their relationship said that Devasini and not van der Velde ultimately "leads" at Tether. "You have known each other for a long time," added the person. "There is a lot of trust." Tether said both play "important roles at Bitfinex and Tether".

Devasini's own business career before Tether was at times in difficulties, the FT previously reported when one of its companies was confronted with a lawsuit for alleged patent injury - a lawsuit that he and the company rejected - and collapsed after a fire in 2008.

The following year, unpaid invoices began to start in Huashun. When Van der Velde took control, the company produced around 3 million devices in an inconspicuous factory on the outskirts of Shenz.

A court first ordered Huashun to repay a creditor RMB6825 ($ 1,068), as can be seen from Tianyancha's court decisions. From June 2011, Huashun stopped paying for the preserved parts, and nine months later owed him around 64,000 RMB, as can be seen from separate court records in Shenzhen.

When Yang sued, nobody appeared in court and did not give a written answer to the claims, which prompted a judge in Shenzhen to double the amount that Yang was due. Yang told the FT that he had never received full payment.

by 2013 Huashun was convicted of around 500,000 RMB in more than a dozen judgments, as the records show. The company was also occupied in 2012 with a small fine for "illegal patent behavior" and often had to re -enact taxes with fines due to late payment, as the Tianyancha records show.

Although the records indicate that the creditors of Huashun were dissatisfied, others remember their relationships with van der Velde far more positive.

Shih-Wei Liao, extraordinary professor at the National Taiwan University, who has known the Tether boss for more than 30 years, said that Van der Velde made a major contribution to the students of a jointly carried out blockchain course, especially in ethics lessons

"I am afraid of this CEOs who tell our students that they can make AI and blockchain and make a lot of money. But he is 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.vekatarama@ft.com / ryan.mcMorrow@ft.com