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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

#251

Post by nsp »

sxates wrote: post #99

I'm not saying that there's nothing worth investigating in the Crypto space, but I wish the SEC spent half the time it spends chasing down shady ICOs looking into fraud at Goldman Sachs and other Wall St. banks. You know, the institutions that whose scale dwarfs crypto and actually has enormous economic repercussions?

There are no indications that the SEC spends remotely near half the time they spend investing big banks/the traditional financial sector on crypto currencies. I’d be shocked if even 10% of sec resources were devoted to cryptocurrencies.

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

#252

Post by seppel »

3pt14159 wrote: post #233
seppel wrote: post #177

Earlier quoted context omitted.

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…

> They set up a bunch of trades going forward a couple months and they just leave it.

Yeah, why not. But does it explain the increasing demand for USDT? Why are they printing Tethers like crazy?

> The problem with Bitcoin is that what do you sell it for? In many countries the only option is Tethers.

The problem with Tethers is that what do you sell it for? The only option is BTC :)

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

#253

Post by darawk »

PeterisP wrote: post #219
darawk wrote: post #189

Earlier quoted context omitted.

You is anyone. You can go open an account right now and do it.

Not if you're an "U.S. Person".

Yes, but that's irrelevant. The fact that some groups of people can arbitrage the price of tether against USD means they ought to be equivalent.

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

#254

Post by darawk »

PeterisP wrote: post #222
darawk wrote: post #208

Earlier quoted context omitted.

Indeed nobody has provided proof. However, Bitfinex claims to issue Taiwanese domestic wires unimpeded. I assume that, if that weren't the case, we'd be hearing from Taiwanese Bitfinex customers about it.

Why aren't we hearing from any Taiwanese Bitfinex customers with examples that they have successfully done so? Are there even meaningful numbers of Taiwanese customers? Has it been marketed in Taiwan?

I can't say, though I would assume that if there were Taiwanese customers who couldn't withdraw, we'd be more likely to hear about that.

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

#255

Post by s73ver_ »

darawk wrote: post #216
s73ver_ wrote: post #185

Earlier quoted context omitted.

And you know that, in reality, it's not guaranteed, right?

Yes. But that is likely a way of trying to skirt money laundering laws by saying technically it's not equivalent to USD. The fact of the matter is that they do redeem it 1:1, and have this whole time.

I cannot believe that, especially with that line in their TOS. Saying, "They're only saying that to skirt the law!" doesn't make things any better.

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

#256

Post by notahacker »

TeMPOraL wrote: post #209
JumpCrisscross wrote: post #190

Earlier quoted context omitted.

> It's becoming a public issue Pardon me, I didn't mean to say it isn't something regulators should go after. I was merely commenting on their incentives. If you're an ambitious regulator, an easy-to-explain high-profile bust is worth its career weight in gold. "I got Martin Shkreli convicted of securities fraud" is potent and messageable. "This cryptocurrency scheme...what's are cryptocurrencies?..anyway, this schem…

> This cryptocurrency scheme...what's are cryptocurrencies? "Remember that fake computer money used to buy hard drugs and order assasinations on the Dark Web? Those ones. Also, they're currently being used to scam people by megadollars. And I'm about to bust some of them." Maybe not Shkreli-level in media applause, but close enough, I think.

Probably bigger tbh. Suspect the guys behind Tether have printed themselves a lot more money than Shkreli was ever worth, and people will have vague recollections of the existence of a cryptocurrency Wild West long after they've forgotten why that securities fraudster who also dabbled in pharmeceuticals companies was so unpopular.

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

#257

Post by hvasishth »

seppel wrote: post #248
achompas wrote: post #182

Earlier quoted context omitted.

> Who is doing this? Why would you sell for USDT instead USD? On many international exchanges, USDT are the easiest way to convert BTC to a (supposedly) USD-backed asset.

> On many international exchanges, USDT are the easiest way to convert BTC to a (supposedly) USD-backed asset. I'm sorry, but I cannot follow. Let's say you want to sell a BTC, current worth about 10k. So you go to a shady exchange, click sell and 10k of USDT appear in your account. Good, but what is the next step? The next thing you will notice that there is nothing that you can buy for your USDT. You cannot buy a h…

You sell BTC to USDT if you are not looking to cash out of BTC. Instead, if you think that BTC is at a peak in the short term and you simply want to sell at the peak and get back in once it drops, selling to USDT is just fine. That way you can buy back BTC once price drops.

When you do want to cash out to real fiat, you have to sell to USD.

USDT allows a large number of exchanges to allow you to sell BTC and hold in something that looks like USD. Without USDT a number of exchanges won't see anywhere near the volume they get. By enabling a larger volume, USDT is indirectly helping inflate BTC (and other currencies) price.

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

#258

Post by Asparagirl »

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.

No. Go do some reading on all the charities and hospitals that were hit very hard by the Madoff ponzi scheme imploding. They had to give up millions that their invested-with-Madoff-and-Madoff-feeder-funds rich donors had promised them, donations they had been relying on and been planning their budgets around. Worse still, in a ponzi scheme there can be clawbacks of money you “made” before and already spent, not just loss of the existing money that goes poof.

EDIT: Or, if you’re a sports fan, consider the impact on the New York Mets and their budget over the last decade.

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

#259

Post by [deleted] »

seppel wrote: post #248
achompas wrote: post #182

Earlier quoted context omitted.

> Who is doing this? Why would you sell for USDT instead USD? On many international exchanges, USDT are the easiest way to convert BTC to a (supposedly) USD-backed asset.

> On many international exchanges, USDT are the easiest way to convert BTC to a (supposedly) USD-backed asset. I'm sorry, but I cannot follow. Let's say you want to sell a BTC, current worth about 10k. So you go to a shady exchange, click sell and 10k of USDT appear in your account. Good, but what is the next step? The next thing you will notice that there is nothing that you can buy for your USDT. You cannot buy a h…

[deleted]

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

#260

Post by rmrm »

paulmd wrote: post #232
rmrm wrote: post #184

Earlier quoted context omitted.

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 b…

Actually, you are the only one who has brought this up, that the liquidity dictates that they couldnt have sold BTC for USD. If that is true, then youve answered my question of what I was missing. I didnt aggressively fail to address this, it quite literally wasnt brought up. Thanks.

EDIT: This apparently is no longer a site to ask questions or to challenge assumptions in good faith to get at an understanding. Its a religious conversation. One takes things on faith, or GTFO, apparently.

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