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

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

#41

Post by vkou »

ebbv wrote: post #31
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…

You're skipping a key bit here; billions of Tethers magically appeared on the market in the last month and were used to buy BTC in suspiciously regular fashion, in 100 million USDT amounts, and with no clear evidence that it was actually purchased by anyone using real USD.

Also, 'aspirationally' is doing a lot of work in the grandparent post. Each instance of USDT is supposed to be backed by 1 USD in tether's accounts, which is what's supposed to peg its value... However.

1. Tether will not convert your USDT into USD. You can only offload it to a bigger fool.

2. Tether's accounts have yet to be audited.

3. Tether has lied about #1 and #2.

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

#42

Post by to3m »

ceejayoz wrote: post #22
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.

This is good for Bitcoin.

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

#43

Post by gojomo »

machinecontrol wrote: post #19
SirensOfTitan wrote: post #12

Earlier quoted context omitted.

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?

If USDT goes to zero, every exchange that trades it becomes immediately insolvent.

Only an exchange that is somehow on-the-hook to redeem USDT for actual USD at parity would have problems.

An exchange could offer USDT trading but still have negligible exposure to its value itself. And then if USDT goes to zero – radically breaking the intended parity-with-USD – direct losses should be confined to USDT holders, not exchanges.

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

#44

Post by drcode »

ebbv wrote: post #31
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…

You're skipping a key bit here; billions of Tethers magically appeared on the market in the last month and were used to buy BTC in suspiciously regular fashion, in 100 million USDT amounts, and with no clear evidence that it was actually purchased by anyone using real USD.

I hear you and this whole situation is clearly shady af, but at the end of the day BTC is fungible with USD, so I'm not sure at this in and of itself is that big of an issue (besides any explicit legal concerns that I can't speak to). If you're providing a currency pegged to the USD, then selling tether for BTC might be one piece of a strategy to do this- The issue for me is more that no one knows what's happening to the USD/BTC/etc after such a sale happens.

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

#45

Post by ceejayoz »

treve wrote: post #20
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…

Ponzi schemes also only harm those who inflict it on themselves.

https://en.wikipedia.org/wiki/Albanian_Civil_War

> The Albanian Civil War, also known as the Albanian rebellion, Albanian unrest or the Pyramid crisis, was a period of civil disorder in Albania in 1997, sparked by Ponzi scheme failures. The government was toppled and more than 2,000 people were killed. It is considered to be either a rebellion, a civil war, or a rebellion that escalated into a civil war.

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

#46

Post by profuse99 »

gressquel wrote: post #30
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

correct. phil potter is director at both bitfinex and tether. tethers get deposited straight to bitfinex upon creation as far as i understand it.

source: https://offshoreleaks.icij.org/nodes/82024464

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

#47

Post by ebbv »

drcode wrote: post #44
ebbv wrote: post #31

Earlier quoted context omitted.

You're skipping a key bit here; billions of Tethers magically appeared on the market in the last month and were used to buy BTC in suspiciously regular fashion, in 100 million USDT amounts, and with no clear evidence that it was actually purchased by anyone using real USD.

I hear you and this whole situation is clearly shady af, but at the end of the day BTC is fungible with USD, so I'm not sure at this in and of itself is that big of an issue (besides any explicit legal concerns that I can't speak to). If you're providing a currency pegged to the USD, then selling tether for BTC might be one piece of a strategy to do this- The issue for me is more that no one knows what's happening to…

Issuing USDT when there's no USD backing it up is an issue when you claim that it is backed 1:1. That is called fraud.

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

#48

Post by JumpCrisscross »

treve wrote: post #20
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…

Ponzi schemes also only harm those who inflict it on themselves.

> Ponzi schemes also only harm those who inflict it on themselves

Ponzi schemers lie to their investors. (Madoff purported to run a reputable shop.) It’s harder to argue, to the broader public, that someone buying Tether with Bitcoin could reasonably think they made a legitimate investment.

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

#49

Post by Analemma_ »

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.

> This is good news for quality cryptocurrency organizations.

Are there any? I’m being honest and not snarky here: I’ve yet to see a single company in the space that’s not at least somewhat shady.

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

#50

Post by vkou »

atarian wrote: post #5

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

Another poster claims that most of the people who currently own Tether have no idea that they actually own Tether. [1]

If that is true, then the point of it seems to be enriching the people running exchanges, at the expense of their users.

[1] https://news.ycombinator.com/item?id=16264371

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