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Crypto Market Roiled by New Allegations Against Tether, Bitfinex

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

#41

Post by jpmattia »

dragonwriter wrote: post #34
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? 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.

To repeat the other reply:

The primary suspicion about tether was lack of solvency, and the [edit: CFTC] subpoena went out in late 2017. It would not have taken more than some weeks to determine if the assets were not present.

It's pretty hard to imagine the AG sat on tether insolvency for 18 months.

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

#43

Post by zik »

peterlk wrote: post #8

It'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?

Those guys actually are regulated. The axe falling on them was inevitable, it's just taken a long time.

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

#45

Post by oooshha »

matthewbauer wrote: post #40
oooshha wrote: post #11

Earlier quoted context omitted.

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%.

It's worth the market's perception of what the holders will get after a prolonged bankruptcy process.

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

#47

Post by bb88 »

Felz wrote: post #29
driverdan wrote: post #16

Earlier quoted context omitted.

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.

Which does make it rather curious that the music's kept playing, so far. Is "common knowledge" that it's probably a complete fraud (like this filing should give) required to pop the tether bubble? Or will even this not be enough?

Let's not think of it as a bubble. Let's think of it as Wyle E Coyote running off a cliff and forgetting to look down, because that seems to be the modus operandi of the average HODL.

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

#48

Post by MusaTheRedGuard »

driverdan wrote: post #16
patio11 wrote: post #10

Earlier quoted context omitted.

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.

Yep. Most smart people, even the most diehard fans, knew tether was at the very least, extremely shady.

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

#49

Post by caprese »

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.

WELL, do note that this is about an infraction that occurred in mid-2018, LONG after the "ardent HODL-ers" were skeptical about it and while Tether had its highest level of confidence in the market, instead of like 2016.

So it is almost like a caricature of its own criticisms.

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

#50

Post by dragonwriter »

jpmattia wrote: post #41
dragonwriter wrote: post #34

Earlier quoted context omitted.

> 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.

To repeat the other reply: The primary suspicion about tether was lack of solvency, and the [edit: CFTC] subpoena went out in late 2017. It would not have taken more than some weeks to determine if the assets were not present. It's pretty hard to imagine the AG sat on tether insolvency for 18 months.

> The primary suspicion about tether was lack of solvency, and the subpoena went out in late 2017

Per the court filing, the investigation of Bitfinex and Tether began in 2018 and the subpoena went out on November 27, 2018.

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