How To Launder A Billion Dollars Using Tether
Kontigo Fallout, Affirm Applies for ILC Charter, Cal DFPI Fines Nexo, Aussie AML Regulator Warns Airwallex
Hey all, Jason here.
This isn’t a political newsletter, apart from where the political process intersects with policymaking, regulation, and banking/fintech/crypto (which seems to be happening with increasing frequency and significance as of late.) I really try to limit how much I editorialize in this space.
But I cannot and will not be silent about the atrocities occurring in Minneapolis, including the apparent execution of a U.S. citizen yesterday, who appeared to be simply legally exercising his first and second amendment rights.
The United States has certainly had ugly and shameful episodes in the past, in which the apparatus of state was turned inward, aimed against U.S. citizens; in prior episodes, the worst of those impulses were eventually checked, through protests, at the ballot box, and by the courts.
The threats to freedom and democracy today are real, and many of the institutions designed to protect them — particularly the two other “co-equal” branches of government, Congress and the courts — have been significantly weakened.
I may no longer live in the United States, but I’m deeply saddened and alarmed to watch a country once described by Ronald Reagan as a “shining city on a hill” — a beacon of liberty and hope to those living under oppressive regimes, including, at the time, in the Soviet world — continue to tear itself apart.
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Nexo Fined By Cal DFPI, Affirm Applies for Nevada ILC, Aussie Regulator Warns Airwallex on AML
Crypto exchange Nexo began its exit from the U.S. market in mid-2023 after increasing regulatory scrutiny of its “Earn Interest Product,” though, with changing conditions, the company said in 2025 it would re-enter the U.S.
While the company hasn’t yet resumed operations, it did reach a settlement with the California Department of Financial Protection and Innovation over allegations it operated as a lender in the state without a license and extended loans without considering borrowers’ ability to repay.
During its previous run in the U.S., Nexo allowed consumers in the state to take dollar-denominated loans secured by their crypto holdings on the platform. While the platform did not conduct typical credit risk underwriting on the loans, it did require users to overcollateralize the debt; to illustrate with a simplified example, by lending $1,000 against collateral of $2,000 worth of bitcoin.
Nexo agreed to pay a $500,000 fine to settle the enforcement action.
Meanwhile, buy now pay later giant Affirm is joining the bank charter arms race. The company submitted an application to charter a Nevada industrial loan company with that state’s regulator and for corresponding deposit insurance with the FDIC.
Nevada is a favorable state for banks focused on lending to be chartered in, as there is no usury cap (maximum interest rate) for most consumer credit products in the state. However, with ongoing litigation about the preemption rights of state-chartered banks vs. OCC-chartered banks, Affirm would face some risk if it chooses to use the Nevada bank entity, if approved, to lend into other states at rates above those states’ usury limits.
Lenders like Affirm have a clear-cut business case for seeking a charter: a lower-cost, stable source of funding in the form of deposits, greater regulatory clarity on “true lender” issues, and improved economics vs. working with a partner bank to write loans.
Affirm founder and CEO Max Levchin commented on the application, saying, “A banking subsidiary would strengthen and diversify Affirm’s platform, and help us bring honest financial products to more people. This is about expanding what we can do for consumers and merchants, and building for the long term.”
In separate Affirm news, the company also announced last week it would partner with another fintech firm, Esusu, to offer installment plans for rent payments. Esusu operates both through property managers and on a direct-to-consumer basis, enabling reporting of users’ rent payments to credit bureaus.
The partnership with Affirm will enable qualifying Esusu end users to split their rent into two equal monthly payments with no interest charges. Esusu charges users a monthly fee ranging from $10 to $50 for a variety of features and benefits.
Lastly, Australian financial crime regulator AUSTRAC has ordered an external audit of Airwallex, a popular wallet and multicurrency platform.
The products and features Airwallex offers are roughly comparable to Wise (formerly TransferWise).
The company is headquartered in Singapore and is popular in the Asia-Pacific region, though it has been seeking to grow in the U.S. and other Western hemisphere markets. In the U.S., Airwallex partnered with embattled Evolve Bank & Trust and Community Federal Savings Bank, though it has also obtained its own money transmission licenses in at least 42 states.
AUSTRAC announced the move on January 22nd, “following concerns about potential non-compliance.”
Brendan Thomas, AUSTRAC CEO, explained, “We take this action where we suspect serious non-compliance, because we expect businesses to be actively managing their AML/CTF obligations… As a global payment platform that facilitates the transfer of funds to multiple jurisdictions, AUSTRAC is concerned with Airwallex’s transaction monitoring program has not been attuned to the full range of risks it faces and that the company hasn’t demonstrated an acceptable understanding of who its customers are and what reporting may be required.”
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How To Launder A Billion Dollars Using Tether
On paper, Jorge Luis Figueira, a Venezuelan national living in Miami, is a seasoned bank executive, with stints as the chief financial officer of an investment bank, chief executive of an international savings and payments bank, and a number of other senior roles in financial services companies.
Figueira presently lists himself as managing director or CEO of four financial services companies.
But in reality, recently unsealed court documents allege, Figueira was using his knowledge of the banking system, industry connections around the world, and the stablecoin Tether, also known as USDT, to launder billions of dollars — apparently, through multiple companies he setup for this purpose.
Although the affidavit supporting the criminal complaint against Figueira refers to “Company A,” “Company B,” “Company C,” and “Company D,” a cursory examination of publicly available records links Figueira to numerous Miami-based companies: Areti Holdings, Unique Finance LLC, Unique Finance Holdings, Inc., Lumar Prestige Corp, Falcon Financial, and Basciano Trading; Figueira also appears to be linked to PMT Sports Management, Inc.
Financial crimes compliance expert Jim Richards noted that many of the entities share a common registered agent (who is listed as the registered agent for another 33 Florida-based companies and LLCs). Figueira’s companies also share an overlapping set of principal, mailing, and director addresses in Sunny Isles and Miami.
Sarah Beth Felix, AML/sanctions expert and President of Palmera Consulting, pointed out that, in the U.S., a passport or proof of nationality isn’t required to open a bank account.
Because of the relative ease of obtaining identity credentials like a state ID or driver’s license, which are acceptable for typical account opening processes, financial institutions lack data on the nationalities of their clients, a valuable data point that could be used to better understand potential risks.
Basciano Trading does hold a money transmitter license in Florida, which was granted on February 13, 2025, and was registered with FinCEN as a money services business on May 3, 2024.
Registering as a money services business is not a form of “accreditation,” as Basciano states on its website. And, indeed, Basicano Trading’s own MSB registration letter carries the following consumer warning: “FinCEN does not recommend, approve, or endorse any business that registers as a money services business. Any such claim and similar claims are false and may be part of a scam or attempt to deceive consumers.”
Shell Companies’ Accounts at TD Bank Key to Moving Illicit Money
Court filings reveal in detail how Figueira and multiple unindicted co-conspirators moved cash and crypto that was purportedly from the sale of counterfeit merchandise and illegal narcotics into the U.S. financial system.
While Figueira believed he was laundering funds for goods like knock off purses and cocaine, in reality, the primary person he was interacting with was a confidential source for the FBI.
According to court records, the operation that led to Figueira’s indictment began when that confidential source informed the FBI about a person, referred to in the affidavit as unindicted co-conspirator 1, who was operating a major international money laundering operation out of Venezuela and Panama. Per the affidavit, the U.S. Office of Foreign Asset Control (OFAC) has designated family members of that person as “Specially Designated Narcotics Traffickers.”
In January 2024, the FBI’s confidential source took $20,000 in cash to a second unindicted co-conspirator in Panama, who counted the bills and arranged the transaction. Later that day, the source received the funds into the U.S. bank account they designated, less the agreed upon 3.5% fee.
Per the affidavit, the laundered funds were sent from the TD Bank account owned by Figueira’s “Company A.”
The source repeated the process in February, this time, dropping off $70,000 cash in Panama and receiving $67,550 into their U.S. bank account, again sent from “Company A’s” TD Bank account.
In March 2024, the FBI’s source made a different and higher-risk request: picking up physical cash in the United States to launder. Given the higher risk, the fee was also higher: 10% of the $50,000 the source was asking to have cleaned and placed into the U.S. financial system.
A different FBI source dropped of the $50,000 in cash in Miami, and $45,000 was sent to the designated bank account from a TD Bank account owned by Figueira’s “Company B,” according to the affidavit filed in the case.
Figueira Explains How To Use Tether To Launder Money
In August 2024, the FBI’s source tried but was unable to reach their primary point of contact, referred to in court records as unindicted co-conspirator 1.
Per the court filing, law enforcement later learned this was because that person was imprisoned in Venezuela following the 2024 election in that country.
The source ultimately went to the physical address associated with Figueira’s Company A in Sunny Isles, Florida, in late August in an attempt to connect with him directly. In September 2024, the two met in person at that Sunny Isles office.
In that meeting, according to the court documents, Figueira explained that he could not accept cash in the U.S., but that his associates in Venezuela could accept U.S. dollar cash and convert it into USDT (Tether).
Figueira understood that, in Venezuela, banks are unlikely to question the source of dollar deposits, as “[i]n Venezuela, everything gets mixed. All those dollars coming from commerce that the government of Chavez has caused all those transactions to be done in cash for different reasons, get mixed with all those dollars in cash that have questionable origin.”
For example, Figueira explained to the FBI’s source, “In Venezuela, three interesting things happen. One, I receive cash that can come from the sales of refrigerators and washing machines. But at the same time the cash can come from oil sales. And it is forbidden that an American company do it with Venezuela because there could be sanctions. But three — it could be from the narcotraffic also. All of that comes in the same box.”
That’s whether the use of Tether comes in; Figueira told the FBI source, “That’s what the USDT is made for, to collaborate with the cleaning of all of that stuff.”
Figueira would then obscure the origins of the funds by rapidly moving them through numerous additional wallets across different blockchains, before using liquidity providers to exchange USDT into U.S. dollars and deposit them into the bank accounts of the companies he controlled. Those companies would then wire the funds to the U.S. accounts affiliated with the entities that had dropped of the cash in Venezuela.
Per the court filings, Figueira specified that he used liquidity providers that included Anchorage, Enigma, and Abra.
Figueira claimed that he and his associates processed an average of $700 million per month using these techniques to locations across the world, including Colombia, Argentina, Spain, Germany, Dubai, and China. Figueira told the FBI source he expected the operation’s “macro” wallet to reach a balance of $1 billion in the coming year.
Figueira was also willing to accept Tether sent directly to wallets he controlled, skipping the step of on-ramping physical U.S. dollars to the popular stablecoin.
In November 2024, the FBI’s source verified this by asking Figueira to launder $20,000 worth of USDT. The source sent the funds to a wallet address specified by Figueira, and received the funds, less a 0.55% fee, from “Company C.”
The source conducted additional transactions in early 2025, depositing USDT to wallets controlled by Figueira and receiving dollars via wire transfer into a U.S. bank account on or around January 17 and January 21.
When the source met with Figueira in person in Miami in February 2025, the source told Figueira that he “work[ed] with Mexican and Colombians that send the merchandise from the south,” referring to illegal narcotics, per the affidavit.
Figueira proposed using coded language in their communications, to distinguish between drug-related money transfers vs. others:
The FBI source conducted additional transactions via USDT, receiving payouts to a U.S. bank account from Figueira’s Company A on February 21, 2025, and from Company D on November 7, 2025.
According to FBI analysis of three wallet addresses associated with Figueira and the underlying “macro” wallet in which funds were concentrated, a total of more than $1 billion across 3,379 transactions flowed into the “macro” wallet, and a nearly identical amount flowed out across 2,774 withdrawals.
Figueira was arrested pursuant to a warrant issued on December 23, 2025.
His initial appearance in U.S. District Court for the Eastern District of Virginia is scheduled for this Tuesday, January 27th, at 10:00am.
Kontigo Fallout: With Lights Turned On, “Cockroaches” Scatter; PayPal Still Processing Transactions For The YC-Backed Venezuelan Crypto App
The American companies that provided payment processing services to the Y Combinator-backed Venezuelan crypto app Kontigo have been quiet, at least publicly.
But Stripe, Stripe-owned stablecoin infrastructure firm Bridge, and crypto cards-as-a-service provider Rain all appear to have ceased working with the app, which allowed Venezuelan individuals and businesses to receive funds in U.S. dollars, hold them as USDC, and offramp them to Venezuelan banks with little if any documentation.
JPMorgan Chase is reportedly “winding down” its relationship with Checkbook, the startup Kontigo used to provide Venezuelans with virtual accounts in the U.S. Some on social media inaccurately referred to this as the bank “freezing” Checkbook’s accounts; Checkbook’s co-CEO Pia Thompson categorically denied this, telling Fintech Business Weekly, “All of Checkbook's accounts are fully operational and performing as expected.”
But as of Friday, online payments giant PayPal was still processing transactions for the crypto app. (Edit: as of approximately 1:00pm on 1/26/2026, it appears that PayPal has ceased processing transactions for Kontigo.)