Anybody who read about the connection between Tether and Bitfinex when the paradise papers came out saw this coming.
Crypto Market Roiled by New Allegations Against Tether, Bitfinex
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Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex
#32It's almost like unregulated financial institutions have a tendency to screw over their customers... No one could have predicted this in the consistently solvent, regulated, and trustworthy cryptocurrency market. It's too bad bitfinex got ripped off by a surely unrelated entity. /s Have we learned our lesson yet?
Don't you know, the government is no better than a drug dealer, we'd all be better off without them.
Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex
#33> 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?
1. The primary suspicion about tether was lack of solvency, and the subpoena [edit: from CFTC] went out in late 2017. It would not have taken more than some weeks to determine if the assets were not present. Moreover, the NY AG would have hammered the point in the document if she knew.
2. It's hard to imagine bitfinex draining 100% of the tether reserves and thinking it wouldn't blow up. So I'd hazard a guess that they took only a fraction, with the expectation of replacement before getting caught. (Isn't that the embezzler's cliché?) Since that fraction amounted to $850M, it's probably not a bad guess that they were fully backed or at least pretty close, so that Tether could continue any redemption operations.
Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex
#34> 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?
I don't think this says that; it says that the ~$2bn in tether had at least $700 million in actual backing, because at least that much was transferred out of it's backing.
It still could have been insufficiently backed to start with.
Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex
#35Cryptocurrency exchanges seem to be full of fraud and deception.
It must be tempting to transfer the assets to some account you control as there's almost no way to prove who did it or catch you.
Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex
#36So why hasn't the bottom fallen out of Tether yet?
If they lost $850m they may have $1150m or so left in cash and can use that to support the tether price.
Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex
#37Predictably, the BTC/USDT market (on Binance) is showing an inflated price for BTC as people try and bail out. Elsewhere the price of BTC is falling. It's impossible to tell the real price anymore because, for the moment, both actions are cancelling each other out.
Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex
#38Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex
#39Re: Crypto Market Roiled by New Allegations Against Tether, Bitfinex
#40I 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.
Tether’s worthless if it’s not worth a dollar. You’ll either get 100% or 0%.