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Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

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Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#21
This guy has been trying to spread doubt about bitfinex for a long time, but never has much to back it up. A few months ago he went on a big campaign against Tether (tokens associated with Bitfinex), claiming they were created out of thin air. Tether then completed and released an audit by a professional, accredited team of their bank balances (1). I don't personally use Bitfinex, and it's possible some of these accusations are at least partially true, but there's really no evidence to confirm that. Don't buy into this type of FUD without doing your own research.

Some of the claims he makes are disingenuous. Bitcoin Gold has nothing to do with Bitfinex, and is listed on a number of exchanges. It's definitely a pretty sketchy project, but it was a BTC fork and users tend to dislike when their exchange keeps forked tokens to themselves. EOS/IOTA are big projects with large market caps and real teams. Did some weird accounting happen after the Bitfinex hack? Maybe. Did most of the people end up getting their money back? Yes. Does it matter now? Not really. This is the largest BTC exchange (by volume) in the world. They generate tens of millions of revenue from exchange fees every month. There's no clear reason for them to engage in any weird, illegal money schemes at this point, they already have a money printing factory.

https://tether.to/wp-content/uploads/2017/09/Final-Tether-Co...

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#22
post #16

Reading this article made me wonder - how much of the bitcoin rally is due to counterparty risks? If I remember correctly the last ramp up happened during Mt. Gox era. They were having USD withdrawal issues which resulted in BTC prices being very high on the exchange. But it din't deter them from publishing prices and making markets. Now is the case of Bitfinex suffered from a hack like Mt. Gox and are trying to stay…

I am not sure I follow. Counterparty risk should push the price down, not up. This thing is not worth as much because there is a significant risk your investment may go away because of a bug or a mistake.

That assumes there's an immediate withdraw method on the exchange with higher rates.

MTGox abused the latency of withdraws in an attempt to attract BTC desposits (after their original deposits were stolen) on their exchange and presumably sell those back for cash via other outlets to slowly pay off customers and appear solvent.

MTGox also manipulated the market with trader bots.

https://willyreport.wordpress.com/2014/05/25/the-willy-repor...

https://www.theguardian.com/technology/2014/may/29/bitcoin-b...

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#23

Reading this article made me wonder - how much of the bitcoin rally is due to counterparty risks? If I remember correctly the last ramp up happened during Mt. Gox era. They were having USD withdrawal issues which resulted in BTC prices being very high on the exchange. But it din't deter them from publishing prices and making markets. Now is the case of Bitfinex suffered from a hack like Mt. Gox and are trying to stay…

> Now is the case of Bitfinex suffered from a hack like Mt. Gox and are trying to stay afloat.

They were hacked few years ago.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#24

This guy has been trying to spread doubt about bitfinex for a long time, but never has much to back it up. A few months ago he went on a big campaign against Tether (tokens associated with Bitfinex), claiming they were created out of thin air. Tether then completed and released an audit by a professional, accredited team of their bank balances (1). I don't personally use Bitfinex, and it's possible some of these accu…

They stole 15% of every users Bitcoin Cash, it was suppose to be a 1:1 split, but since they don't like bitcoin cash and lists it as bcash, that might be reason why, I expect more "technical difficulties" during the next fork

https://news.bitcoin.com/bitfinex-bitcoin-cash-deposits-with...

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#25
post #9

While I'd enjoy a good detective journalism, this article is just making claims out of thin air. And here is one: > However, this doesn’t stop Bitfinex from tripping over their shoelaces to immediately list a fork which doesn’t exist, in order to make money off of suckers. That is not correct. Bitfinex didn't list Bitcoin Gold. They listed a future contract of Bitcoin Gold (though the naming "token" is a bit confusin…

> Tether is not used by Bitfinex heavily

Tether is issued by Bitfinex-related company. There is no reason for USA to stockpile US dollars if they can print it. China would be the biggest client of US dollar and first place at dollar richlist.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#26
post #17

Every exchange has their own "virtual dollars", i.e. the user deposits. How do you know they are real? Tether is just a way to securely transfer user deposits between exchanges, and it's not more or less trustworthy.

If the alligation is true that the supply of Tethers is created from nothing, they would have the ability to trade their millions of "dollars" for other cryptocurrencies, taking control of the supply of other blockchains.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#27

This guy has been trying to spread doubt about bitfinex for a long time, but never has much to back it up. A few months ago he went on a big campaign against Tether (tokens associated with Bitfinex), claiming they were created out of thin air. Tether then completed and released an audit by a professional, accredited team of their bank balances (1). I don't personally use Bitfinex, and it's possible some of these accu…

There are two key quotes that you need to pay attention to in that document:

This engagement does not contemplate tests of accounting records or the performance of other procedures performed in an audit or attest engagement.

In addition, our services do not include a determination of compliance with laws and regulations in any jurisdiction. All inquiries made throughout the consulting process have been directed toward, and the data obtained from, the Client and personnel responsible for maintaining such information.

In other words, that document is not an audit. Just like previous "audits" published by Bitfinex connected companies, it’s an internal management report created for the management by an accounting firm. Such reports assume that everything they’re told by management is true: why would management lie to themselves? What would be the point?

If you’re an external entity on the other hand, eg a shareholder in the company say who wants an external third party to validate claims made by management, then you will only rely on a real audit made by a company that sends staff to check on those claims personally. This document is not such an audit & it’s authors are at pains to point that out.

Edit: The auditors did confirm bank balances with the holding banks, but did not perform an audit that would find any corresponding liabilities, nor that the claimed Trustee relationship between the company and the individual named on the account had any legal force. What this document shows is that people connected with the company had accounts with the claimed $Xmillion in them in total on the day in question & this was confirmed by the accountants. That’s it - it’s still not an audit.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#28
post #8
post #4

> As Bitfinex has become more and more desperate, they have listed more and more crypto-currencies of questionable value, such as EOS/IOTA/ETP and so on. As per coinmarketcap.com: EOS is ranked 19, 442 million in marketcap IOTA is ranked 11, 950 million in marketcap ETP is ranked 70, 73 million in marketcap Anyone can throw some light on what these coins really are? Additionally, BTC markets: https://coinmarketcap.co…

IOTA actually seems pretty revolutionary. I don't think it's a finished product yet but if you want some info then it's a DAG ("tangle")[1] instead of a blockchain and offers 0 fees and possibly huge scalability. There are some products already using it: RuuviTag[2], Bosh XDK Iot[3], PoC ElaadNL charging station[4], Modum[5]. Once they prove they can go without the "Coordinator"[6] I'm going to be completely sold on…

> […] offers 0 fees […]

I’m highly skeptical of this claim since there’s a cost to running any system. It seems more likely that they just made fees implicit rather than explicit (as in Bitcoin) but, regardless, someone needs to be paid to keep servers running.

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#29
post #8

Earlier quoted context omitted.

IOTA actually seems pretty revolutionary. I don't think it's a finished product yet but if you want some info then it's a DAG ("tangle")[1] instead of a blockchain and offers 0 fees and possibly huge scalability. There are some products already using it: RuuviTag[2], Bosh XDK Iot[3], PoC ElaadNL charging station[4], Modum[5]. Once they prove they can go without the "Coordinator"[6] I'm going to be completely sold on…

The principles could be relevant (although I haven't verified (or read an independent review of) the proofs). However, at least the execution is dubious: not only was a major cryptographic vulnerability found a few months ago[0], it highlighted that 1. they made their own unproven crypto hash, which is a red flag, (in production, you should always prefer crypto that has survived many years of cryptanalysis) and 2. th…

The coordinator will be open-sourced and in all seriousness, even bitcoin had a sort of coordinator in the beginning, people aren't even forced to use it/can bypass it, but it's recommended to use it for now. So your statement isn't 100% valid.

Regarding crypto, you can read their response & reasoning here: https://blog.iota.org/curl-disclosure-beyond-the-headline-18...

"The replacement Kerl hash function is unmodified KECCAK-384 that only converts its input and output from/to 243 trits to 48 bytes using basic two’s complement. KECCAK-384 is well vetted and researched."

Re: Bitfinex never ‘repaid’ their tokens, they started a ponzi scheme

#30
post #17

Every exchange has their own "virtual dollars", i.e. the user deposits. How do you know they are real? Tether is just a way to securely transfer user deposits between exchanges, and it's not more or less trustworthy.

If the alligation is true that the supply of Tethers is created from nothing, they would have the ability to trade their millions of "dollars" for other cryptocurrencies, taking control of the supply of other blockchains.

Every exchange can fake their user deposits in the same way. Tether doesn't change that. We have to trust their audits.
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