The lawless rollercoaster of bitcoin enriches few investors, while many often lose everything. After the boom in December 2017 at 16,720 euros, the virtual currency had already lost 65% by February 6, 2018. Now [as of February 13th, 2021] it flies to around 40 thousand euros but the bubble can burst at any moment. The crypto community considers a guru Mr Giancarlo Devasini, who on Skype signs himself “Merlin the wizard”. The executive is Chief financial officer of Bitfinex, one of the major crypto exchange platforms in the world, and a director of Tether Ltd which issues the homonymous virtual currency pegged to the dollar. Through Tether pass more or less 80% of bitcoin trades. Since April 2019, Bitfinex is under investigation by the New York Attorney General for abusive financial intermediation. Other US Federal investigations accuse Crypto Capital Corp., a Panamanian company, of money laundering. CCC was used by Bitfinex as a “shadow bank”. In August 2018 CCC allegedly stole 850 million dollars from Bitfinex’ and its customers’ reserves. Who is the Italian manager at the centre of the events that make bitcoin and the entire crypto sector at implosion risk?
Bitfinex was founded in December 2012 in Hong Kong by the French Mr Raphael Nicolle but took off only in 2013 when Mr Devasini entered it through iFinex, a company established in the British Virgin Islands. Born in Turin (Italy) on April 30, 1964, he earned a Doctor of Medicine degree at Milan University in 1990. Mr Devasini left the job of plastic surgeon in 1992 to found Point G Srl [Ltd in Italy] which imported computer parts from China, Hong Kong and Taiwan. But on December 3, 1996, Microsoft announced that Mr Devasini, after making a plea bargain, had decided to pay 100 million liras [50,000 euros at today rate] for having pirated software copies through Point G. On December 28, 2007, Japanese company Toshiba also sued another company of Devasini’s, Acme Srl, for violations of DVDs patents. Until 2014, Mr Devasini opened and closed about ten companies in Italy active in IT, computers, e-commerce, real estate. In those companies, he was the director, as in Perpetual Action Group in Monte Carlo.
With other Bitfinex executives, in 2014 he also founded Tether Holding in the British Virgin Islands.
Then Mr Devasini discovered finance. Since July 24, 2013, he was a shareholder together with Mr Rodolfo Fracassi, Mr Andrea Carati and Mr Niccolò Branca, heir to Italy’s Fernet liquor company, in Mainstreet Capital Partners Ltd in London.
On February 20, 2015, along with Mr Fracassi, he also founded Mainstreet Financials Ltd in London, today named Holland Street Ltd. Mr Fracassi was an important contact [for Mr Devasini]: after a career at the Italian Chamber of Commerce in Hong Kong, in Salomon Smith Barney, Franklin Templeton and Goldman Sachs, Mr Rodolfo Fracassi Ratti Mentone today with Mainstreet Partners as an advisor deals with sustainable investments for Italian clients such as [major listed companies] Banca Generali, Fideuram, Sella Sgr, CDP [Cassa Depositi e Prestiti, Italy’s sovereign fund] and is a member of the Human Foundation of Ms Giovanna Melandri [an Italian economist and politician, Member of Parliament since 1994 to 2013, Italy Culture minister since October 21, 1998, to June 11, 2001, and Sports minister since May 17, 2006, to May 7, 2008].
On September 17 and 18, 2014, for Bitfinex Mr Fracassi went to Isle of Man where he met managers of the Cayman National Bank and on December 1, 2015, together with Mr Devasini, he founded DigFinex, holding of the Bitfinex group, of which he acquired a 5% share in the Cayman Islands.
“In 2014 I was invited to participate in the establishment of Bitfinex with a minority stake”, Fracassi confirms. “In 2016 that initiative no longer aligned with my approach to business: I left by selling my shares to the founders and buying back from Mr Devasini his shares in MainStreet Partners, in which Mr Devasini has never had operational roles as I never have had in Bitfinex. We are not in touch or have any common activities since 2016”, he explains. In May 2018, however, Mr Fracassi was registered for Bitfinex as an attendee at Consensus, the annual New York conference on the blockchain: “I was there on a personal basis, the organizers got confused”, he says.
In the meanwhile, Bitfinex began to have problems. On August 2, 2016, the crypto exchange discovered the theft of 119,756 bitcoins, which at the time were worth 62.5 million euros and today [as of February 13, 2021] 4.74 billion euros. The exchange spread the damage pro-quota on all its customers and compensated them with Bfx tokens worth one dollar, each convertible into one iFinex share. Mr Devasini, however, was looking for other solutions: on October 12, 2016, he met some executives of a major Italian bank in a restaurant in dell’Orso Street in Milan to test their willingness to “securitize” Bitfinex’s debt to robbed customers. “We talked about the bitcoin but there was no room for any deal”, says a manager [who asks for anonymity].
In 2018, Bitfinex was again in a liquidity crisis for the 850 million dollars stolen by Crypto Capital. A senior executive who signed himself “Merlin” wrote frantic messages to the Panamanian company asking to repay the funds: «all this could be extremely dangerous for everybody, the entire crypto community. BTC could tank to below 1k [one thousand dollars] if we don’t act quickly”.
On November 5, 2018, as an executive of Tether Mr Devasini lent 900 million dollars to Bitfinex and as an executive of Bitfinex, Mr Devasini signed the receipt to Tether.
On May 22. 2019, iFinex, the parent company of Bitfinex and Tether, collected one billion dollars “on trust” by issuing the new crypto, Leo. «Leo is the securitization of a debt, issued to cover a hole in which the role of Bitfinex has not yet been clarified. The issuer, which is the same as Tether, has never passed an independent audit”, explains Mr Ferdinando Ametrano, professor of bitcoin and blockchain technology at the University of Bicocca in Milan. On February 6, [2021,] Bitfinex announced the full repayment of the loan to Tether.
But in the meanwhile, in London, Mr Devasini also met Mr Silvano Di Stefano, now Tether’s Chief investment officer (Cio). Mr Di Stefano in the English capital had worked for Mps [Italian troubled bank] together with Mr Alberto Cantarini, who reported to Mr Gianluca Baldassarri [Mr Baldassarri was the former chief of Mps London finance branch; he is well known in Italy for Mps trials, which he come out acquitted of all counts]. Mr Di Stefano and Mr Cantarini then sat on the investment committee of Athena Capital Fund [a hedge fund which in Italy was involved in many cryptic businesses for troubled banks and retirement funds], Raffaele Mincione’s Luxembourg company that in 2012 through corporate boxes bought a London building at Sloane Avenue 60 which is the centre of the investigation into Vatican’s funds [see Financial Times stories]. After they left Athena, Mr Di Stefano and Mr Cantarini together founded Edmond Capital Ltd in London.
On December 11, 2017, Mr Di Stefano and Mr Devasini set up the crypto fund company BlueBit Capital Partners in Luxembourg.
On July 1, 2020, Mr Devasini and Mr Di Stefano together met in Switzerland the representatives of Citex, an Iranian cryptocurrency company.
Mr Enrico Danieletto, who works in London in Pairstech company, also had a contact with Bitfinex. Between 2004 and 2005, Mr Danieletto was director of an English company of professor Alberto Micalizzi, the so-called “Madoff of Bocconi” University in Milan. In January 2019, Mr Micalizzi was sentenced for other events to six years term for a scam of tens of million euros at the damage of Italian and foreign banks. Mr Danieletto will go to a preliminary hearing in Modena Court next March 12: he is accused of having used Pairstech in 2018 to help the former president of the Fondazione Cassa di Risparmio di Mirandola [Mirandola’s Savings Bank Foundation], Mr Giovanni Belluzzi, to steal 7 million euros from the Foundation with a fake investment in diamonds.
On September 17 and 18, 2014, Mr Danieletto went together with Mr Fracassi to Isle of Man on behalf of Bitfinex: “I was already a friend of Mr Fracassi, between 2013 and 2014 my role [for Bitfinex] was limited to a consultancy on the possible authorization of Bitfinex in England but the company decided not to follow that path and my consultancy ended. I have not had other roles in Bitfinex”, explains Mr Danieletto.
Contacted, Mr Devasini, Bitfinex, Tether and Bluebit did not answer [to our questions].
This story was published on “Il Fatto Quotidiano”, Italian daily newspaper, on February 15, 2021 — © Il Fatto Quotidiano SEIF S.p.A 2021
1 — to be continued