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U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

bloomberg.com

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Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#21

Post by gressquel »

SirensOfTitan wrote: post #12
machinecontrol wrote: post #3

If this is a grand jury subpoena, things could get ugly fast in the crypto space. Despite all talk of decentralization, the major exchanges pose a systemic risk.

How is this related? USDT is effectively a centralized currency. Bitfinex has always been shady. Are you saying that exchanges that accept USDT will get hit hard by this?

yes, when people try to cash out their USDT to real USD the exchanges are going to collapse like house of cards because appearently the fake USDT is not 1:1 backed to real USD.

Note: only exchanges supporting USDT (tehter) is going to get hit hard, other exchanges such as BitStamp will probably see a downtrend but not going to crash

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#22

Post by ceejayoz »

KasianFranks wrote: post #14

This is good news for quality cryptocurrency organizations. Bitfinex has problems, so does Tether and it's good to see bad actors in the crypto world getting weeded out, called out and put down.

C'mon, say the "This is good for Bitcoin!" thing.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#23

Post by jonknee »

sna1l wrote: post #17
atarian wrote: post #5

What is the point of Tether? Is it for dodging taxes?

In Europe, trading like-kind assets isn't a taxable event, so a lot of people take gains and move them into USDT. edit: At least that's what I remember seeing last, laws may have changed.

"Like-kind" is quite a stretch when considering something pegged to USD.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#24

Post by drcode »

Summary for newbs:

Bitfinex is a crypto exchange kinda based in Hong Kong and kind of based in Taiwan (this seems to change depending on convenience.) Taiwan recently started becoming more rigorous about monitoring international USD wires, and lots of Bitfinex users had their money stranded in Taiwan. Bitfinex stopped supporting US customers because of these difficulties (AFAIK most customers did eventually get their money out though)

Tether is a company/product that is a cryptocurrency that (aspirationally) has a value of exactly 1 USD. The Tether company and Bitfinex are (supposedly) two unrelated companies that nevertheless have mostly the same people employed as principals. Because crypto daytraders need easy ways to quickly pull their money in/out of crypto exposure, the Tether currency has been a massive hit as a way to convert into pseudo-dollars. Because of this, people have bought billions of these "tethers" from the company, but no one has a good handle on where these billions of dollars are safeguarded, if at all.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#25

Post by mschuster91 »

SirensOfTitan wrote: post #12
machinecontrol wrote: post #3

If this is a grand jury subpoena, things could get ugly fast in the crypto space. Despite all talk of decentralization, the major exchanges pose a systemic risk.

How is this related? USDT is effectively a centralized currency. Bitfinex has always been shady. Are you saying that exchanges that accept USDT will get hit hard by this?

> Are you saying that exchanges that accept USDT will get hit hard by this?

Not necessarily but the market shakes from a major exchange going bust can definitely hit other exchanges as well (a classic bank run), and even if there won't be a bank run other exchanges, especially any with ANY ties to ANY US institution or customer (which basically every exchange has!), will be expecting their own "audits"...

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#26

Post by IntronExon »

JumpCrisscross wrote: post #7

Cryptocurrencies are in an interesting middle ground, from a regulator’s political perspective. They’re complicated and stand to harm mostly those who inflicted it on themselves. For an ambitious regulator looking forward to an administration’s nominating committee, Senate confirmation hearing or even campaign trail, that makes it unattractive relative to e.g. insider-trading hedge fund managers or Medicare fraudster…

I’m. It sure that I agree. There has been so much blatant scamming and corruption in the cryptouspace that it’s almost certainly in need of some regulatory fire and brimstone. It’s also, however self-inflicted, exploded into the popular consciousness. The SEC would probably also prefer, as prosecutors do, nearly certain victory. The nature of blockchains makes them exceptionally strong evidence, and paper trails.

In particular the state can’t really afford to let money laundering on this scale continue.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#28

Post by product50 »

machinecontrol wrote: post #3

If this is a grand jury subpoena, things could get ugly fast in the crypto space. Despite all talk of decentralization, the major exchanges pose a systemic risk.

Well, Bitfinex and Tether is how legacy exchanges operate. Bitfinex is completely centralized and issues Tether (a stable coin) as a feature to enable traders to do "cash out" from the volatility of crypto when they feel like.

Going forward though there will be dexes and decentralized stable coins (such as Basecoin). Those would be extremely difficult to track down and have strong incentive structures to maintain their value.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#29

Post by fpgaminer »

So, how does this work legally? Bitfinex isn't a U.S. based company and doesn't work with U.S. citizens. The article says where it's based is unknown. Does the CFTC have the authority to subpoena them? Is it because they're claiming Tether is USD pegged, so they gain authority because of their use of the dollar?

Honestly just a curious question. (I'm not looking for snarky answers to the effect of "world police".)

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#30

Post by gressquel »

drcode wrote: post #24

Summary for newbs: Bitfinex is a crypto exchange kinda based in Hong Kong and kind of based in Taiwan (this seems to change depending on convenience.) Taiwan recently started becoming more rigorous about monitoring international USD wires, and lots of Bitfinex users had their money stranded in Taiwan. Bitfinex stopped supporting US customers because of these difficulties (AFAIK most customers did eventually get their…

a little correction. Tether and Bitfinex were exposed in Panama Papers as sister companies. They are not two unrelated as they say they are. Even more reason to stay away from Bitfinex and USDT
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