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Crypto Market Roiled by New Allegations Against Tether, Bitfinex

bloomberg.com

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Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex

#11

Post by oooshha »

csomar wrote: post #7

I think the news was out for some time and only now the rumor started to confirm. Tether is trading at exactly $1/$1 on Kraken. It had touched $0.85/$1 on October 2018 though. It was discounted for the last quarter of the last year. The discount lasted for several months suggesting lack of liquidity and possibly lack of funds. The Tether discount suddenly disappeared. And suddenly a discount/premium appeared on Bitfi…

It will hold it's peg until it doesn't, and when it doesn't you will take a 50-70% haircut. Just watch.

Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex

#13

Post by paulgb »

csomar wrote: post #7

I think the news was out for some time and only now the rumor started to confirm. Tether is trading at exactly $1/$1 on Kraken. It had touched $0.85/$1 on October 2018 though. It was discounted for the last quarter of the last year. The discount lasted for several months suggesting lack of liquidity and possibly lack of funds. The Tether discount suddenly disappeared. And suddenly a discount/premium appeared on Bitfi…

> And the current price suggests that iFinex has got its shit together.

Or, it could mean that they keep buying up coins on the market at face value to keep prices stable to avoid a run on the bank (which they can only do as long as their reserves remain).

Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex

#16

Post by driverdan »

patio11 wrote: post #10
berbec wrote: post #3

Is this a surprise to anyone? I was under the impression that even the most ardent HODL-er thought Tether was, at best, a very risky investment, and more likely a total scam.

This is pretty big news; the entire cryptocurrency economy relies on tethers being valued at par, given that they're how billions of dollars of liquidity are denominated. While rumors and suppositions about Tether have swirled for quite some time, that was also true of Mt. Gox before the fall, and those of us who have been saying loudly that they're insolvent have not been widely believed.

Anyone in the cryptocurrency space with half a brain knew something was up the minute they refused an independent audit. It was only a matter of time before someone brought charges and/or Tether collapsed.

Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex

#18

Post by hinkley »

seibelj wrote: post #2

The article: A cryptocurrency exchange that claims real dollars back its popular digital coin Tether raided those reserves to cover up $850 million that went missing, the New York Attorney General’s office said Thursday. State Attorney General Letitia James said Hong Kong-based iFinex Inc., which operates the Bitfinex cryptocurrency exchange and owns Tether Ltd., has been commingling client and corporate funds to cov…

When I was a kid, a comedian, possibly Carlin, lamented that it was "too bad that stupidity didn't hurt". In this age of disruption and the snake oil that seems to go along with it, it appears that is exactly what stupidity does. Hurt.

That's some serious bravado and optimism. Why the fuck would you ever move that much money at once? They should not have transferred a penny more than the monthly volume at a time. Was the volume $850 million a month? I seriously doubt it.

Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex

#19

Post by jpmattia »

> The attorney general said Bitfinex’s problems began in 2018, when it handed over $850 million to third-party payments processor Crypto Capital Corp. to handle customers-withdrawal requests. Over the months that followed, Panama-based Crypto Capital failed to process the orders, the attorney general said.

For all the noise about Tether being insolvent, it turns out that it was completely solvent? Then in 2018, Bitfinex got taken by Crypto Capital and raided the Tether reserves for $850M backing the Tether issuance?

So if I'm reading this right: The holders of tether are now screwed and should be converting to bitcoin/litecoin/etc asap.

Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex

#20

Post by chx »

jpmattia wrote: post #19

> The attorney general said Bitfinex’s problems began in 2018, when it handed over $850 million to third-party payments processor Crypto Capital Corp. to handle customers-withdrawal requests. Over the months that followed, Panama-based Crypto Capital failed to process the orders, the attorney general said. For all the noise about Tether being insolvent, it turns out that it was completely solvent? Then in 2018, Bitfi…

> For all the noise about Tether being insolvent, it turns out that it was completely solvent?

what makes you think so?

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