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Tether says its cryptocurrency is worth $2B–but its audit failed

arstechnica.com

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Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#101

Post by qwerty456127 »

Nursie wrote: post #92
qwerty456127 wrote: post #84

Every currency is only worth what people believe it is, nothing else, it doesn't really matter what did it actually cost to make it. Even if that's true, trying to convince people it's not backed the way it was meant to is nearly as questionable ethically as issuing unbaked coins probably was. If people keep believing nobody will get hurt, if people stop believing the results can be catastrophic. Of course this is a…

People have already been hurt - if it's not backed, bitfinex have helped themselves to two billion dollars worth of crytocurrency though fraud. Other people have paid more for crytocurrency than they might have had to because this fraud would have pushed up prices. You're begging us to let criminal activity carry on.

I am not begging you anything but think twice. I personally am not an interested party, I have no blockchain-related assets but I think about all those people who has and I see 2 possible outcomes: if it gets publicly confirmed that the coins were not backed many innocent people will loose their legitimate investments and if it's doesn't they won't, and this doesn't depend on whether the coins actually were backed or not. I don't advocate scam but punishing them may be not really worth the global consequences for people who were not consciously involved. I am not telling what should the people investigating this should choose, I am only telling they should consciously consider all potential results of their decisions. I personally believe that it usually is more important to save what we still have than to revenge what we have lost and that we should always think about the people who happen to be in a less advantageous position than we ourselves are at the time. In fact I love to speak unpopular and "inappropriate" things aloud and question "unquestionable", somebody has to anyway.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#102

Post by sushid »

AJ007 wrote: post #67
conanbatt wrote: post #57

Earlier quoted context omitted.

The difference between mtGox and this is that bitfinex is seemingly infinitely solvent. Some estimates are like 20-30 million revenue per day. Its the top running exchange. I doubt they would expose themselves to a bankrupcy event having such a cash cow. I believe they did market manipulation, and that they are committing fraud with tether, but I'm not convinced tether is not solvent.

What if they covered up other breaches?

We would have seen the losses happen in real time on various blockchains for ETH, BTC, BCH, etc.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#103

Post by Nursie »

qwerty456127 wrote: post #101
Nursie wrote: post #92

Earlier quoted context omitted.

People have already been hurt - if it's not backed, bitfinex have helped themselves to two billion dollars worth of crytocurrency though fraud. Other people have paid more for crytocurrency than they might have had to because this fraud would have pushed up prices. You're begging us to let criminal activity carry on.

I am not begging you anything but think twice. I personally am not an interested party, I have no blockchain-related assets but I think about all those people who has and I see 2 possible outcomes: if it gets publicly confirmed that the coins were not backed many innocent people will loose their legitimate investments and if it's doesn't they won't, and this doesn't depend on whether the coins actually were backed or…

It's not revenge, it's revealing the truth about the market, without which the market cannot function correctly. You are asking for continuation of the lie of overvaluation, which can only continue if more people continue to pump in more money under false pretences.

I'm sorry for people who were caught by this - they've been scammed. Pretending they haven't isn't going to help in the long term but make it worse and for more people.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#104

Post by panarky »

JumpCrisscross wrote: post #50
panarky wrote: post #45

Earlier quoted context omitted.

> So it's possible Tether is keeping the identity of its bank secret to avoid attracting scrutiny from local regulators The whole purpose of Tether is to trade USD after Bitfinex lost USD banking relationships. No naturally, if banking relationships were public, they would be at risk. More likely, these aren't traditional bank accounts at all. These are probably dollars pledged by corporations and hedge funds but hel…

> The whole purpose of Tether is to trade USD after Bitfinex lost USD banking relationships This is willful money laundering. If true, everyone who ever beneficially owned USDT would be subject to federal money laundering charges. AML law doesn't care about intent or knowledge, just actions. > if banking relationships were public, they would be at risk Any bank which holds electronic U.S. dollars reports, directly or…

I'm the last one to defend Tether because it looks as shady as hell, but ...

> This is willful money laundering

Money laundering is the concealment of the origins of illegally obtained money. If the money was legally obtained then it can't be money laundering.

Just creating an alternate way to move clean money isn't prima facie a crime.

> If a bank is hiding its direct or indirect relationship to Bitfinex, they are betting the bank on Bitfinex

Banks probably don't even know about Bitfinex.

If Fuckwit Capital Partners has $100m on deposit with Wells Fargo and pledges 10% of it to buy Ethereum, those dollars stay in FCP's account and the bank has no idea that the funds are pledged.

Upon receipt of the promissory note from FCP, 10m new Tethers get created with the Ethereum as collateral.

> claim that Tether has a "relatively simple balance sheet."

The balance sheet could be very simple, but devilishly difficult to audit.

ASSETS

Accounts Receivable from Investors, $2.4 billion

LIABILITIES

Tethers Payable to Traders, $2.4 billion

If Friedman LLP wanted to prove all the pledged USD to back up the receivables, that could be an expensive and invasive audit of counterparties who don't want their banks get wind of their cryptocurrency activities.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#105

Post by qwerty456127 »

Nursie wrote: post #103
qwerty456127 wrote: post #101

Earlier quoted context omitted.

I am not begging you anything but think twice. I personally am not an interested party, I have no blockchain-related assets but I think about all those people who has and I see 2 possible outcomes: if it gets publicly confirmed that the coins were not backed many innocent people will loose their legitimate investments and if it's doesn't they won't, and this doesn't depend on whether the coins actually were backed or…

It's not revenge, it's revealing the truth about the market, without which the market cannot function correctly. You are asking for continuation of the lie of overvaluation, which can only continue if more people continue to pump in more money under false pretences. I'm sorry for people who were caught by this - they've been scammed. Pretending they haven't isn't going to help in the long term but make it worse and f…

Don't get me wrong, I am not really arguing or trying to attach a moral label to whatever the side and convince you, but I am curious, perhaps there is an idea I can't get (I am a mediocre mind and didn't sleep well, that's possible). I feel like playing hide-and-seek trying to find it :-) Would you be so kind to confirm that you understand the rational (albeit questionable, possibly wrong, sure) side of my logic and try to explain if there are rational morality-free reasons other legality/justice/order (incl. preventing further market manipulations, unjustified profits and simple lie) to blow such a bubble up? I am just trying to view the situation from somewhat like a game theory point of view.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#106

Post by Sangermaine »

conanbatt wrote: post #93
Sangermaine wrote: post #70

Earlier quoted context omitted.

>Its the top running exchange. So was mtGox.

mtGOX was insolvent because they lost all their assets, thats not the case for bitfinex as far as we know. That is independent from tether itself, it can happen to all exchanges.

>as far as we know

Yes, precisely the sort of information an audit would reveal. Curious, then, that despite their repeated pledges for robust auditing they first declared they'd engaged a firm to do those audits that didn't actually do audits, then terminated their relationship with the second, legitimate auditor.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#107

Post by Nursie »

qwerty456127 wrote: post #105
Nursie wrote: post #103

Earlier quoted context omitted.

It's not revenge, it's revealing the truth about the market, without which the market cannot function correctly. You are asking for continuation of the lie of overvaluation, which can only continue if more people continue to pump in more money under false pretences. I'm sorry for people who were caught by this - they've been scammed. Pretending they haven't isn't going to help in the long term but make it worse and f…

Don't get me wrong, I am not really arguing or trying to attach a moral label to whatever the side and convince you, but I am curious, perhaps there is an idea I can't get (I am a mediocre mind and didn't sleep well, that's possible). I feel like playing hide-and-seek trying to find it :-) Would you be so kind to confirm that you understand the rational (albeit questionable, possibly wrong, sure) side of my logic and…

>> explain if there are rational morality-free reasons other legality/justice/order (incl. preventing further market manipulations, unjustified profits and simple lie) to blow such a bubble up?

You probably want to start looking into market theory. My understanding of it is imperfect but...

What you're effectively asking is for a market to be protected from bad news because investors who invested in good faith stand to lose out. In this case the bad news is news about (potential) fraud and large-scale fake liquidity. The consequences, outside of the morality of the continual diversion of a large amount of honest money to bad actors, is that price discovery is destroyed and the asset is no longer really tied to any underlying value or sentiment. Such a market could collapse at any moment - if the bad actor stops funneling fake fluidity into the market, for instance, then if that's not replaced with new 'real' money the price will still collapse because the support for the price was a fiction.

In a well regulated system the restitution for the (apparent) criminal activity would be by the state - the perps would get charged with fraud, their assets confiscated, and the state and/or market authorities would endeavour to make good the innocents, either by unwinding trades or paying out from insurance or something. In the cryptocoin space... well yeah, regulation bad, insider trading good.

Markets function well when there is transparency and honesty. Without it they distort and bad actors find ways to capture the profits.

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#108

Post by arisAlexis »

Sangermaine wrote: post #66
arisAlexis wrote: post #41

Earlier quoted context omitted.

it's actually because they are probably solvent. be critical when everyone is sure about something without insider knowledge

You're bizarrely reversing the burden of proof here. If they're solvent, it should be a simple matter to prove it. If "insider knowledge" has the answer, they should easily be able to assuage all doubts.

they have huge incentive not to disclose exactly where their accounts are offshore due to potential government crackdowns on crypto. that is why their previous audit was difficult, attested the amounts but ultimately was cancelled. you can see the amount of panic and fanatism by the downvotes on my previous comment. be sure to bookmark this chat for the future :)

Re: Tether says its cryptocurrency is worth $2B–but its audit failed

#110

Post by Sangermaine »

arisAlexis wrote: post #108
Sangermaine wrote: post #66

Earlier quoted context omitted.

You're bizarrely reversing the burden of proof here. If they're solvent, it should be a simple matter to prove it. If "insider knowledge" has the answer, they should easily be able to assuage all doubts.

they have huge incentive not to disclose exactly where their accounts are offshore due to potential government crackdowns on crypto. that is why their previous audit was difficult, attested the amounts but ultimately was cancelled. you can see the amount of panic and fanatism by the downvotes on my previous comment. be sure to bookmark this chat for the future :)

Sure, but I’m not sure why you’d want written proof of your gullibility and credulousness.
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