Did BSTR get its bitcoin from Tether?

Social media is chattering about the source of funds for the world’s fourth-largest bitcoin (BTC) treasury company, BSTR Inc.

With 25,000 BTC simply attributed to “founding shareholders,” some people are speculating that whale could be Tether.

On July 17, Blockstream’s Adam Back and Cantor Fitzgerald’s Brandon Lutnick announced a business combination that sparked a rally in Nasdaq-listed Cantor (CEPO) to $16.50 per share.

A week prior to the news, shares had been trading 40% lower around $11.80.

After a brief rally into that announcement, CEPO, which will soon undergo a ticker change to BSTR, has round-tripped back below $11.80. As of publication time, shares have slid another 3% intraday.

Three facts catalyzed those fleeting days of exuberance in mid-July.

First, Back’s involvement granted the company instant credibility from one of the earliest and most prominent living Bitcoiners. Back has worked in the crypto industry since 1997 and has led Blockstream, the largest Bitcoin development company, since 2014.

Second, Cantor Fitzgerald added prestige via its ties to the current US Commerce Secretary and Donald Trump cabinet member, Howard Lutnick.

Cantor Fitzgerald was also a hot brand on Wall Street at the time after its landmark deal with Tether, Bitfinex, and Jack Mallers that took shares of Cantor Equity Partners (CEP) from $12.52 on the day of its announcement to $59.75 six days later.

Third, the sheer quantity of assets in the deal — 30,021 BTC — immediately turned BSTR into the world’s fourth largest BTC treasury company.

However, the retracement from its July 17 high has raised questions from investors about the deal. As the market’s decline reflects doubt about the attractiveness of the BSTR deal, some Bitcoin industry executives are questioning the source of those funds.

Where is BSTR getting its 30,021 BTC?

In particular, social media is buzzing with questions about the possible involvement of Tether and Bitfinex in the BSTR deal.

First, Cantor Fitzgerald is a well-known asset manager for Tether and backed Tether’s largest public deal in history with CEP. Elementary logic raised suspicions that CEPO — one letter more than CEP — by the same deal-maker might have involved a similar financial backer.

Second, Swan Bitcoin’s Cory Klippsten asked whether Tether was behind 25,000 Cayman Islands-based BTC of CEPO’s total 30,021 BTC. Klippsten doubted that Back’s Blockstream had sufficient quantities of BTC.

Ambiguously, CEPO’s original press release disclosed the source of those 25,000 BTC from “founding shareholders, advised by Blockstream Capital Partners” without further details.

If the theory about Tether or Bitfinex involvement in CEPO/BSTR’s 25,000 BTC is true — and at this point, that theory is mere speculation — social media continues to ask follow-up questions.

In particular, internet sleuths foraged through court filings to find a recent claim by the bankruptcy estate of Celsius against Tether involving a possible clawback of 39,542 or even 57,429 BTC.

Obviously, that enormous range is still under active litigation and is not owed in any part by Tether by final court order.

They then asked whether the BTC held by BSTR might become encumbered by a future court order arising from this litigation.

Skeptics of Tether’s involvement noted that Back or other “founding shareholders, advised by Blockstream Capital Partners” might have had ample BTC to explain the 25,000 contribution, despite Klippsten’s doubts.

Blockstream is full of bitcoin OGs

For example, one investor noted Blockstream’s substantial capital raises at far lower BTC prices throughout history. Furthermore, the company is full of early Bitcoiners who had opportunities to buy BTC privately at far lower prices as far back as 2014.

Had Blockstream kept good amounts of those BTC from prior capital raises and limited its operating expenses over time, the company or other founding shareholders might have had plenty of BTC to fill out the 25,000 tranche.

Read more: How Tether-backed Twenty One plans to rival MicroStrategy

Back hasn’t responded to X speculation of Tether’s involvement in BSTR since Klippsten initially posted the theory.

Klippsten hasn’t provided hard evidence of Tether or its sister exchange Bitfinex contributing the 25,000 BTC despite calling Tether “the mostly likely candidate given it’s a Cantor deal.”

BSTR prospectuses and communications filed with the Securities and Exchange Commission don’t mention Tether or Bitfinex.