Anyone got a copy of the actual subpoena?
I don't understand why journalists don't provide a link to such public supporting source documents.
U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
231–240 of 421 posts
Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
#232Earlier quoted context omitted.
Tether being printed out of thin air if they're not backed by USD?
I dont understand your question. I think the math is fairly straightforward. There is a USD/USDT driven cross. Creating and destroying USDT is straightforward there. There is also a BTC/USDT cross. That creates a drive for USDT. If that demand to sell BTC and buy USDT bids up USDT, then USDT would be created, and the BTC would convert back to USD. I agree that Tether is not forthcoming that this happens, but yes this…
Because Tether obviously does not have $2.3 billion in cash reserves on hand, there probably isn't 1/10th that volume of fiat in the entire cryptocurrency ecosystem (not market caps, liquid cash that could be withdrawn). They're writing checks they cannot cash, plain and simple.
It's called "lying" and "fraud", your "but what if they did have the cash" is irrelevant, because they don't, and you're getting downvoted because you're aggressively refusing to address that point in favor of hypotheticals.
Could you hypothetically have a legitimate Tether token? Yeah, sure. Is the Tether Foundation on the up and up? Hell no.
There's a reason their auditor bailed before completing the audit.
Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
#233Earlier 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.
Ok, so they printed billions of Tethers and bought BTC with them, I get this part. What I don't get is: This means somebody sold BTC for billions of USDT (instead USD!). Who is doing this? Why would you sell for USDT instead USD? Maybe there some daytraders on the exchanges that go in and out the Tether every day, yeah. But that should not account for that much. Who is hodling that giant pile of USDT? And why?
There are many traders that don't day trade. They set up a bunch of trades going forward a couple months and they just leave it. I've done this in the past. For example, you set up a bunch of buy orders starting at -25% of the current price and further down as it goes and a bunch of sell orders at +25% the price and a bunch up as it goes.
So then if you have volatility and you come back you can have double or triple your money. It's not a perfect system, but it's low work and you really only lose out if it goes to 0.
The problem with Bitcoin is that what do you sell it for? In many countries the only option is Tethers.
Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
#234Earlier quoted context omitted.
The exchanges get sued by the Tether bagholders, and everyone else gets spooked and attempts to exit. So not insolvent, but no active business activities and a bunch of lawsuits incoming, and might as well be insolvent.
> The exchanges get sued by the Tether bagholders On what basis? Other than ones that commingle USD and USDT and/or are organizationally associated with Tether (which, I think, is mostly Bitfinex and Bitfinex), I'm not seeing where there is much basis for holding the exchange liable for the collapse in value of a traded asset.
The nuances are tricky, it depends on how USDT is eventually treated by courts.
But, for example, if it happens to get legally treated as an unregistered security, then the exchange would be fully liable for the losses of their customers, since it was not allowed to sell unregistered securities to general public/unaccredited investors. And this argument by itself seems sufficient to press a serious prolonged case, even if the courts later decide that no, this interpretation isn't the right one.
In general, being an intermediary in shady products may easily mean that you're (also) liable. "Normal" stock exchanges and stock brokers are the exception, they have specially listed immunity exceptions that apply if and only if they fulfil a bunch of conditions; otherwise people may well sue you to cover their losses just because it seems that it's easier to enforce judgments on you than a Hong Kong company.
Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
#235How trustworthy is Kraken? Tether looks like a good short since if it is a fraud it will go way down and if it isn't a fraud it will stay right where it is. I'm in the US and would like to short Tether. But I want to get paid if I'm right.
> How trustworthy is Kraken? They spoof their order books and use wash trading bots...so draw your own conclusions :) Eg: https://www.youtube.com/watch?v=wz-ziPfP00M
...on USDT. how are they even benefiting from this?
Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
#236Earlier quoted context omitted.
The exchanges get sued by the Tether bagholders, and everyone else gets spooked and attempts to exit. So not insolvent, but no active business activities and a bunch of lawsuits incoming, and might as well be insolvent.
> The exchanges get sued by the Tether bagholders On what basis? Other than ones that commingle USD and USDT and/or are organizationally associated with Tether (which, I think, is mostly Bitfinex and Bitfinex), I'm not seeing where there is much basis for holding the exchange liable for the collapse in value of a traded asset.
Fraud, for accepting "USD" deposits and hiding the fact that they silently convert your balance to USDT.
And they don't have to win the lawsuit, they just need to not get it dismissed outright and scare others into leaving the exchange.
Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
#237Earlier quoted context omitted.
It took a serious tin hat warrior to actually believe that line. "If everybody in the world instantly switches over to my new currency overnight everything will be awesome!" That's so far divorced from reality only pure mathematicians could love it. Not to mention it would never work, the blockchain has way too much overhead (many many orders of magnitude) to support an entire world's worth of exchanges every day. Th…
Also consider nearly all of Bitcoin and other cryptocurrencies are "premined" in the sense that only a few early adopters control more then half the supply due to how the work readjustment algorithms are skewed to generate all the coins very easy for a few users but later new users don't have equal access to produce coins as easily or cheaply as those other users.
Also consider nearly all corporations are "premined" in the sense that only a few early founders/early investors control more then half the shares and new investors don't have equal access to buy shares as easyly (sic) or cheaply as those other investors.
Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
#238How trustworthy is Kraken? Tether looks like a good short since if it is a fraud it will go way down and if it isn't a fraud it will stay right where it is. I'm in the US and would like to short Tether. But I want to get paid if I'm right.
let's just say when there will be a run to the banks, Kraken is not likely to be the one with the longest opening hours.
Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
#239Earlier quoted context omitted.
> The exchanges get sued by the Tether bagholders On what basis? Other than ones that commingle USD and USDT and/or are organizationally associated with Tether (which, I think, is mostly Bitfinex and Bitfinex), I'm not seeing where there is much basis for holding the exchange liable for the collapse in value of a traded asset.
Fraud, for accepting "USD" deposits and hiding the fact that they silently convert your balance to USDT. And they don't have to win the lawsuit, they just need to not get it dismissed outright and scare others into leaving the exchange.
> Fraud, for accepting "USD" deposits and hiding the fact that they silently convert your balance to USDT.
Other than Bitfinex (with he comingling issue mentioned upthread), I understood the main use case for USDT on exchanges is to avoid even touching USD transactions in either direction; for exchanges doing this, they wouldn't be at risk here.
> And they don't have to win the lawsuit, they just need to not get it dismissed outright
Right, but I'm not seeing where you get a colorable cause of action that avoids that for a typical USDT-supporting exchange from a USDT value collapse.
Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
#240The SEC took much stronger action with AriseBank.[1] Emergency asset freeze. Receiver appointed. ICO shut down. The SEC alleges AriseBank "falsely stated that it purchased [a Federal Deposit Insurance Corporation]-insured bank which enabled it to offer customers FDIC-insured accounts." Clearly, the SEC has had it with people running these huge scams. [1] https://www.sec.gov/news/press-release/2018-8
AriseBank wasn't only acted on by SEC. For example, "Texas Banking Commissioner Charles Cooper finalized a cease-and-desist order on Friday that said the company, which is registered to a Texas address, is not authorized to engage in the business of banking in the state. The order also noted that Texas law prevents use of the word “bank” in a way that implies to the public that the person is engaged in the business o…
They went completely over the top as a phony bank. Their web site is down, but archived by the Internet Archive.[1] They claimed to be a VISA card issuer. They claimed to own a FDIC-insured bank. They claimed to have ATMs. Plus they had a make-money-fast scheme where their "AIs" would invest for you.
The only real question is "why aren't they in jail yet?"
[1] https://web.archive.org/web/20180110101846/https://www.arise...