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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

#91

Post by empath75 »

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?

You can keep dumb money flowing by screaming fud a lot and appealing to emotion.

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

#92

Post by wmf »

woah wrote: post #86
wmf wrote: post #38

Earlier quoted context omitted.

Just ask Trendon Shavers, Charlie Shrem, or Ross Ulbricht.

Don’t ask Ross Ulbricht. You’ll have to ask the DEA agents who embezzled money while making unsubstantiated accusations of murder for hire. https://arstechnica.com/tech-policy/2016/08/stealing-bitcoin...

And those DEA agents are also in prison.

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

#94

Post by empath75 »

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…

I imagine that bitfinex/tether is liquidating reserves to hold the peg. They can keep it pegged until they run out of money and then not only is tether worthless but so are all your coins on their exchange (and probably most other exchanges that use tether). That’s how bank runs work.

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

#95

Post by jpmattia »

dragonwriter wrote: post #78
jpmattia wrote: post #64

Earlier quoted context omitted.

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 a…

> 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?

Because it's pretty hard to imagine the CFTC would not have communicated with the NY AG if they had the info about Tether's insolvency. Also hard to imagine NY AG not contacting CFTC before filing.

> (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.)

Again, with regard to insolvency, it's pretty hard to imagine CFTC would allow Tether to continue operations for more than a year if they had evidence of insolvency.

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

#96

Post by shawnz »

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?

What's the lesson? That cryptocurrencies have different risks than other kinds of financial technologies? I think that is pretty commonly understood already.

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

#97

Post by gruez »

rsynnott wrote: post #80
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%.

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

Wait, what's so foolish about buying debts for a discount? There's an entire industry (collections) devoted to that. Sure, that time they lost, but hindsight is 20/20.

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

#98

Post by kadendogthing »

shawnz wrote: post #96
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?

What's the lesson? That cryptocurrencies have different risks than other kinds of financial technologies? I think that is pretty commonly understood already.

In the same way that eating raw meat has "different risks" than eating cooked meat.

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

#99

Post by ShorsHammer »

nlh wrote: post #70
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.

There's a huge difference: Yes, the bank only holds $0.10 in cash, but at least in the US, the F.D.I.C. backs up every dollar in your bank account up to $250,000. That's a major reason the reserve banking system functions. If there were an F.D.I.C. for tether then I'm sure people would have different expectations (and likewise, if there were no F.D.I.C. for the US banking system).

I can only imagine what would happen to the value of that USD were the FDIC invoked.

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

#100

Post by dragonwriter »

jpmattia wrote: post #95
dragonwriter wrote: post #78

Earlier quoted context omitted.

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 a…

> 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? Because it's pretty hard to imagine the CFTC would not have communicated with the NY AG if they had the info about Tether's insolvency. Also hard to imagine NY AG not contacting CFTC before filing. > (…

> Because it's pretty hard to imagine the CFTC would not have communicated with the NY AG if they had the info about Tether's insolvency

It's also pretty hard to imagine that, in filing their own case, the NY AG would reveal sensitive information about a still-active federal investigation, but that's your apparent theory.

> it's pretty hard to imagine CFTC would allow Tether to continue operations for more than a year if they had evidence of insolvency.

It's pretty easy to imagine that of taking action would in any endanger the ongoing DoJ criminal investigation that it would hold back; it's worth noting that the ongoing law enforcement investigation exemption was among the exemptions CFTC cited in June of last year in declining to provide documents in response to an FOIA request about the Tether-related subpoena.

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