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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

#71

Post by themagician »

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?

The lesson will never be learned.

The Ponzi scheme is as old as money itself. It’s never gone away. The one thing that crypto currency truly has revolutionized is the Ponzi scheme. You can do it any number of ways, add any number of twists, and do it over and over again. With crypto you don’t even have to be subtle. When the pot gets big enough you just outright steal it.

It’s possible that Satoshi himself will try to liquidate his stake at some point, crashing BTC itself and make off with a cool billion. Who knows. That might have been the plan all along.

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

#72

Post by orblivion »

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?

No way. This stuff was created to be the wild west. Let it keep failing until people come to actually understand the risks and learn the appropriate amount of trust, and then for companies find ways to become trustable.

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

#73

Post by Scoundreller »

oooshha wrote: post #45
matthewbauer wrote: post #40

Earlier quoted context omitted.

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.

The lawyers and accountants get paid out of the leftover assets.

If there's practically zero assets left, the process won't even start.

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

#75

Post by eunoia »

nostrademons wrote: post #65
Animats wrote: post #17

So why hasn't the bottom fallen out of Tether yet?

Tether functions as sort of the reserve currency of crypto. Many exchanges don't even offer fiat money or banking connections - to use them, you have to send Bitcoin in from another exchange or a personal wallet, then you can convert it into Tether or other altcoins. People who are "getting out of crypto" by selling Bitcoins because they think the price is gonna drop oftentimes are actually buying Tethers. When 80% o…

> We'd expect to see a rise in the price of BTC at USDT-based exchanges as Tether holders need to convert to Bitcoin to get out, along with a fall in BTC at fiat exchanges as they sell that Bitcoin. To some extent this is happening (Coinbase Pro's BTC price is almost $100 less than Tether-only exchanges like Binance or Bitfinex), but it's less severe than I would expect from a true run on the bank.

The small spread is very interesting. I would also expect it to be much higher.

Tether seems to be pegged at $1.00 on Bitfinex but trading (increasingly) below that on Kraken [1].

Do you know of a better free resource for monitoring the situation by chance? No stake, just curious.

[1] https://www.cryptocompare.com/coins/usdt/markets/USD

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

#76

Post by therein »

themagician wrote: post #71
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?

The lesson will never be learned. The Ponzi scheme is as old as money itself. It’s never gone away. The one thing that crypto currency truly has revolutionized is the Ponzi scheme. You can do it any number of ways, add any number of twists, and do it over and over again. With crypto you don’t even have to be subtle. When the pot gets big enough you just outright steal it. It’s possible that Satoshi himself will try t…

> It’s possible that Satoshi himself will try to liquidate his stake at some point, crashing BTC itself and make off with a cool billion. Who knows. That might have been the plan all along.

Not quite possible with the auditing capabilities Bitcoin provides. The moment any amount from those accounts is moved, Bitcoin would probably tank.

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

#77

Post by ticmasta »

ShorsHammer wrote: post #67

Everyone agree's that tether should have a 1-to-1 backing. The delicious irony in it all is that the money in your bank is backed by about $0.10 for every dollar they owe savers. I hope for the day when people expect the same of the banking system that underpins the whole economy.

>> The delicious irony in it all is that the money in your bank is backed by about $0.10 for every dollar they owe savers.

I'll be generous and assume you know thtat banks don't store your money in a big vault a la Scrooge McDuck

There's a big difference between banks redistributing your money as loans and mortgages vs. a cryptocurrency tied to a supposed dollar-backed instrument 100% controlled by the same party. The entire premise of fiscal policy depends on their being a difference.

If you want to secure 100% of your money you're welcome to put it in a safety deposit box.

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

#78

Post by dragonwriter »

jpmattia wrote: post #64
dragonwriter wrote: post #50

Earlier quoted context omitted.

> 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.

We're apparently talking about two different subpoenas. CFTC subpoenaed Tether back in 2017: See eg https://webcache.googleusercontent.com/search?q=cache:4hW_8L...

So...the CFTC isn't a State of New York agency, so what does this have to do with the reading into a New York AG action that Tether must have been solvent otherwise the AG wouldn't have sat on information since then?

(Also, the CFTC and US DoJ investigations were still active at least as recently as November of 2018, which doesn't sound like they found that things were A-OK, more like they were—and presumably still are—trying to nail down the details and responsibility/liability issues surrounding identified irregularities.)

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

#79

Post by nostrademons »

animex wrote: post #15
patio11 wrote: post #12

You might enjoy this court order: https://ag.ny.gov/sites/default/files/2019.04.24_signed_orde...

Doesn't this mean they can't sell/buy/exchange tethers at all!

It appears to mean they can't issue new Tethers nor can they raid the Tether reserves, but it doesn't stop trading in Tethers themselves.

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

#80

Post by rsynnott »

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%.

You may remember the implosion of mtgox, and people buying mtgox ‘dollars’ at a discount. There’s always a greater fool, apparently.
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