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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

#341

Post by 0wing »

fpgaminer wrote: post #29

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".)

Tether is looking a lot like Liberty Reserve, and that ended in seizure of assets.

https://en.wikipedia.org/wiki/Liberty_Reserve#2013_seizure

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

#342

Post by mtgx »

fpgaminer wrote: post #29

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".)

I'll hijack this thread so everyone gets to see this.

STOP reading Bloomberg for cryptocurrency news! I don't know if they did this on purpose or not to manipulate the market and so some of their rich friends can get in at a cheaper price, but I find it quite unacceptable for a publication such as Bloomberg to mess up the fact that it was posting a two months old story.

But that's not even the worst part. No, the worst part is that they edited the article to change the date but you won't see anywhere that this edit was made, except for this, which you probably wouldn't have noticed anyway:

> Updated on January 31, 2018

I find that extremely unprofessional at the very least, if not malicious/manipulative, as I mentioned above.

https://www.reddit.com/r/CryptoCurrency/comments/7u4fd5/we_a...

Also, if I remember right, Bloomberg was one of the first to announce the fake South Korean cryptocurrency "ban", too, along with CNBC, which I believe was the first, and a few others, which may have just tried to "get there first", without actually verifying the story. So I would also say stay away from CNBC, they seem to be even worse, and you can tell from the way they write their headlines (always either in a panic or hype-inducing manner).

Finally, as for Bitfinex and Tether itself, if they got the subpoena since early December, how were they still able to "print so much fake money" in January - unless maybe they can actually back those Tethers. I don't know, but it is an interesting theory:

https://twitter.com/SatoshiLite/status/958427996209074176

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

#343

Post by quickthrower2 »

sna1l wrote: post #32
fpgaminer wrote: post #29

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".)

Seems like the local government can still make it difficult for them to enforce the subpoena, but I imagine Hong Kong will be pretty amenable. [1] [1] https://webcache.googleusercontent.com/search?q=cache:vl90MA... Disclaimer: I'm not a lawyer, just found this from a cursory search.

I think of Edward Snowden. HK helped him.

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

#344

Post by charlesdm »

Animats wrote: post #240
PeterisP wrote: post #217

Earlier quoted context omitted.

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.ar…

Easy: they're probably not based in the US

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

#345

Post by antonvs »

seppel wrote: post #267
hvasishth wrote: post #257

Earlier quoted context omitted.

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…

> 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. Yes, I get that. But as you mentioned this is "short term". How does it explain that Tether is printing more and more Tethers? Do you think more and more people are selling BTC for USDT for a "short term"? W…

> How does it explain that Tether is printing more and more Tethers?

The demand for Tethers is high because the demand to be able to trade is high.

> Do you think more and more people are selling BTC for USDT for a "short term"?

More and more people have been getting involved in trading as the price of Bitcoin and other cryptos was spiking. Now those people are in the market, but Bitcoin has been dropping. It makes sense that a lot of them would want to hold a USD proxy under these circumstances.

Of course, that's the optimistic scenario. It's also possible that There's are being used fraudulently to pump BTC. Without proper transparency, it's impossible to be sure.

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

#347

Post by jandrese »

andymal wrote: post #301
jandrese wrote: post #161

Earlier 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…

Curious what you mean by "There literally isn't enough electricity in the world."? BTC uses the same amount of energy to produce an empty block as it uses to produce a full block.

It has diminishing returns on the amount of work you get out of each hash, so if you wanted to support millions or billions of transactions per second (world scale) it would become impossible to sustain.

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

#348

Post by FireBeyond »

Blindedwino wrote: post #272
js2 wrote: post #51

Earlier quoted context omitted.

Here’s what I don’t understand. You can exchange bitcoins for fiat currency. But afaik you can’t exchange USDT for fiat. So why is anyone willing to take the risk of holding on to USDT? Why are any exchanges even willing to touch it?

You can't _easily_ exchange bitcoins for fiat currency, that's why USDT exists. Many banks are not accepting deposits coming from some shady offshore bank into a "normal people" account. The average Joe who's paper rich because he has 100 bitcoins on an exchange and sells them, there's a good chance their local bank branch won't be happy if he's receiving a wire transfer of $1M from the Virgin Islands or Cyprus. So i…

> there's a good chance their local bank branch won't be happy if he's receiving a wire transfer of $1M

Eh. If I'm Joe Average cashing out my 100 bitcoin in your situation, I call my bank manager a few days ahead, telling him to expect a wire transfer along those lines.

I think the risk on such transactions is _far and away_ "will your exchange honor the cash out?", "how long will it take?" (up to 12 weeks for some exchanges) "will there be onerous restrictions on cash out limits?" (this example would be 100 consecutive days of $10K transfers) - much more so than "Will Chase Bank NA be happy to accept a wire transfer from Scotiabank BVI?"

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

#349

Post by FireBeyond »

notyourday wrote: post #269
hvasishth wrote: post #257

Earlier quoted context omitted.

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…

If one cannot easily cash out USDT to USD or EUR or GBP or whatever else then USDT is also a garbage sea shell currency - you may as well sell for sea shells directly.

But if you're doing that, then the exchanges don't get to take their cut!

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

#350

Post by jandrese »

Nition wrote: post #325
rajacombinator wrote: post #318

Earlier quoted context omitted.

Why would anyone buy your tethers with usd?

It sounds like exchanges are using Tether because offering to cash out USD can be difficult if the exchange isn't in the US, so they let people use Tether as a proxy USD. e.g. If someone thinks the market's about to crash, they can sell their Bitcoin for Tether, then buy back Bitcoin when the price drops. So if your coin has the same use case as Tether does now, people may not buy MyTetheredCrypto off you directly fo…

The big problem being how you convince people to put real money into the system in the first place, especially if you want to keep the price fixed at 1:1. You end up with a huge quantity if BTC chasing tiny amounts of real USD. In a proper market the exchange rate should plummet due to the imbalance.
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