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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

#401

Post by sobani »

rocqua wrote: post #306
notyourday wrote: post #280

Earlier quoted context omitted.

I keep reading about these magical places. Say that I have a 1000 BTC. What is the exchange that would allow me to sell 500 BTC and wire money to my account in: a) Chase Manhattan Bank in New York City ( USD ) b) National Westminster Bank in London ( GBP ) c) HSBC ( Paris ), account in Euros. The wire must show up live in 72 business hours and post to the account within 72 * 2 hours.

For my small ventures ( Not sure how this works for non dutch citizens. Presumably a dutch bank-account suffices. They don't seem to be an exchange though. Instead they are essentially market making, keeping their own supply. You don't have an account there. Instead, when selling they present you an address to send to, and when buying you give them the address to send to, Moving 500 BTC there in a single trade would…

bitonic has a spread between buy/sell of about 200 EUR (on an average price of 8000 EUR). That seems a bit excessive.

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

#402

Post by notyourday »

Mtinie wrote: post #364
oculusthrift wrote: post #302

Earlier quoted context omitted.

yeah they only let most people withdraw 10k a day. some guy owed millions on taxes but couldn’t withdraw it fast enough to pay..

You can request an increase to your limits. For a customer with a large, verified portfolio I’m sure Coinbase would work with you if you needed to move funds in large amounts. It may not be overnight, and there may be additional fees, but it’s not going to take 100’s of days to move $1M unless you aren’t trying very hard.

My bank does not need to work with me to send a multimillion dollar wire. They only care that

(a) i am already a customer and they have verified that I'm me.

(b) i have completed all needed forms before

(c) i have followed the authorization protocol, including verification via control phone number registered with the bank and controlled authorization code

Same goes for any brokerage.

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

#403

Post by ekiru »

makomk wrote: post #397
dragonwriter wrote: post #389

Earlier quoted context omitted.

> How can you pump BTC with USDT? Get people to believe it's backed 1:1 by USD when it's not, so that it is viewed as equivalent to USD but less problematic in regulatory terms, and then print a bunch of unbacked USDT and use them to buy BTC. To the market, the effect is as if a whole lot more actual USD were chasing BTC, effectively looking like higher demand.

I'm not sure how effective that would be in practice. Total Tether issued as of the end of 2017 was about 1.3 billion. Coinbase booked over $1 billion in revenue in 2017; the amount of money going into them was presumably much bigger than that. (There's also weak evidence from price differences etc between exchanges that the bulk of the demand has been coming from Coinbase/GDAX.)

> Total Tether issued as of the end of 2017.

Total Tether issued as of the end of January 2018 is about 2.3 billion.

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

#404

Post by jonknee »

stanleydrew wrote: post #372
jonknee wrote: post #95

Earlier quoted context omitted.

The best way is probably to sell BTC futures, if Tether/Bitfinex go down the market will be chaos and won't have the Tether protection team to bid it back up. Those are cash settled and you will 100% get your money. Shorting on any crypto exchange has a lot more counterparty risk.

Let's say I'm hypothetically inclined to sell BTC futures. Where would I go to do that?

The easiest is probably through a stock broker. Futures are risky (typically highly levered, though less so for BTC) and they usually make you have a decent chunk of change before they'll give you access.

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

#405

Post by jnbiche »

jnbiche wrote: post #337
dingo_bat wrote: post #333

The more I read about USDT, more it looks like money laundering. These guys take your USD and issue you equivalent tokens you can trade with. As long as a lot of people don't try to encash their tokens everything will be fine. Also note that if holding USD is the only problem this is supposed to solve, why not just hold USD? Except if you want to bypass your local laws. I buy USDT in country A. Trade BTC for it, then…

> These guys take your USD and issue you equivalent tokens you can trade with. Nope. That's how it was until about a year ago, when all their banking accounts were closed (probably due to the issue you describe). For the past year, they just randomly printed millions of "US-Backed" tokens, and people trade them as if they were actually backed by dollars, even though they are not the result (since a year ago) of any U…

> and even though you can exchange them for actual USD.

That was a typo, I should have written, "and even though you can't exchange them for actual USD."

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

#406

Post by vzcx »

oculusthrift wrote: post #354
vzcx wrote: post #279

Earlier quoted context omitted.

It would rise as priced in tether, with tether depreciating against the dollar. You will see larger spreads between tether exchanges and dollar exchanges, which already regularly grow into the hundreds. If people were holding tether because they wanted to be flat with respect to the cryptocurrency market, they will likely sell their cryptocurrency on a dollar exchange, suppressing prices there.

btc would rise in terms of the real USD as well because the demand for it would increase.

I suppose it's possible, but holding all else equal? I don't immediately see why dollar demand would increase in the event of a tether collapse.

Dollar prices will adjust as BTC->Dollar and Dollar->BTC flows change. Dually the Tether prices. The only thing that keeps these prices in line is a Tether/Dollar arbitrage, but that arbitrage will slow and halt as people flee tether.

If anything, I would guess that a sudden increase in selling pressure from people doing Tether->Crypto->Dollar risks pushing people into a Crypto->Dollar fear feedback loop.

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

#407

Post by politician »

jandrese wrote: post #347
andymal wrote: post #301

Earlier quoted context omitted.

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.

There's also the problem that the block size is capped which is maybe what you were referring to?

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

#408

Post by rmrm »

TeMPOraL wrote: post #396
rmrm wrote: post #260

Earlier quoted context omitted.

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…

I might be getting lost in the discussion, but I still feel you miss the core point - it's not about liquidity. Even if they could sell BTC for USD without affecting the crypto market, they still seem to have printed out USDT out of thin air and - as I understand - proceeded to buy BTC with them. That is, you could say they literally stole those BTC. Going from USDT to USD in a roundabout way through BTC doesn't chan…

I do understand that, they engaged in fraud, slight of hand, whatever. But my main interest is what happened after they exchanged USDT for Bitcoin. When they did this, or as they did this, they added $2 billion or marginal demand that didn't exist in dollars to the bitcoin market. However, if they subsequently and along the way sold the BTC for USD, they also extinguished that extra demand, so the bitcoin market net-net had no extra demand - all purchases ended up being backed by USD.

I dont know the answer to the above, but its critical for the future price of bitcoin and is really really important. Everyone just seems to assume they held the bitcoin, which is a crazy move. If they could have sold for USD, it makes sense to me they would have...thats why I think its an important question. It doesnt seem to interest anyone else tho, which is fine.

The comment above said liquidity dictates they could not have, that they must still be holding bitcoin. But I also say today, bitfinex'ed, the blogger that has been on this story, says they redeemed 330 million in past 24 hrs. Which is far above the 10% of 2 billion number he said of the entire crypto market is backed by USD. So to say the liquidity doesnt exist doesnt seem to make sense, there seem to be a lot of dollars into crypto. 1 million people with $1000 invested is a billion alone. That isnt crazy.

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

#409

Post by seppel »

dragonwriter wrote: post #389
seppel wrote: post #386

Earlier quoted context omitted.

> It's also possible that There's are being used fraudulently to pump BTC. My point is: How can you pump BTC with USDT? You need somebody to buy your USDT if you want to sell USDT. In fact, you need somebody to buy an enormous amout of USDT if you want to pump BTC. Pumping BTC is not a one sided thing, and I fail to understand the other side. What I get from this thread is that that nobody really knows who is buying…

> How can you pump BTC with USDT? Get people to believe it's backed 1:1 by USD when it's not, so that it is viewed as equivalent to USD but less problematic in regulatory terms, and then print a bunch of unbacked USDT and use them to buy BTC. To the market, the effect is as if a whole lot more actual USD were chasing BTC, effectively looking like higher demand.

> and then print a bunch of unbacked USDT and use them to buy BTC.

But who is buying and HOLDING the USDT? Sorry that I repeat myself but this is the whole point I want to understand.

Yes, somebody is selling USDT for BTC, I get that. It is nice but I want to understand the other side. Who is buying USDT for BTC? Why? Somewhere there is a billion of USDT lying around. Somebody bought it. Somebody is keeping it. WHY is somebody keeping it? Why is somebody buying more and more of it?

I think it is a very crucial point to understand. Yes, maybe you can convice some fools to sell their BTC for USDT. But they will notice, because there is nothing that you can do with USDT except buying BTC. So they will BTC again and try to cash out somewhere else. So who is holding the one billion of USDT?

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

#410

Post by stanleydrew »

jonknee wrote: post #404
stanleydrew wrote: post #372

Earlier quoted context omitted.

Let's say I'm hypothetically inclined to sell BTC futures. Where would I go to do that?

The easiest is probably through a stock broker. Futures are risky (typically highly levered, though less so for BTC) and they usually make you have a decent chunk of change before they'll give you access.

I have a few brokerage accounts at a few places (Fidelity, E-Trade, Vanguard). Haven't done much margin trading and never worked with futures (done a little with options) so I just don't know what to look for in the interfaces. Is there a "ticker symbol" that represents a future contract for Bitcoin? Are there multiple parties offering such contracts? Is there a broker that you know of who's currently offering these contracts?

I found this, but it didn't clarify much: http://www.cmegroup.com/trading/equity-index/us-index/bitcoi...

Thanks for the help. If it's easier to follow up by email it's in my profile.

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