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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

#231

Post by JumpCrisscross »

panarky wrote: post #126
Felz wrote: post #29

Earlier quoted context omitted.

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?

People have been yelling that Tether is a ponzi fraud since it launched in 2015. And yet it still trades 1:1 to USD today, after the court filing was released. So is there some magic force that keeps the fraud running, and prevents market participants from cashing out their Tether in the mother of all bank runs? If you hold Tether why wouldn't you sell? Or is there more to the story than just "Tether is an obvious fr…

> it still trades 1:1 to USD today

On exchanges of questionably integrity. And where it is impossible to reliably short the instrument.

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

#233

Post by Scoundreller »

9935c101ab17a66 wrote: post #221
Scoundreller wrote: post #163

Earlier quoted context omitted.

This may be 100% unrelated/wrong: Check out "OZ49 Corporation". It has some shared directors with some other Panama crypto companies, and a director name Oz: https://opencorporates.com/companies/pa/155664811

Here's a video that seems to be the same guy mentioned in the link you shared: https://www.youtube.com/watch?v=1iXBwQMls0o If this is the guy, there's quite a goddamn rabbit hole. He owns some companies registered in Panama with MEYR ABIZIZ (Authorized Movers https://opencorporates.com/companies/pa/571706 ). A quick search turned up these reports of Authorized Movers being a scam: https://www.movingscam.com/forum/vie…

I think there's 2+ Oz Yosefs. The one you linked to doesn't seem to have overlap with crypto/finance, just basic IT stuff.

Under the OZ49 Corporation's directors (as linked above), you see one of them, and IVAN MANUEL MOLINA LEE, a director of Crypto Capital Corp.

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

#234

Post by conanbatt »

marvinalone wrote: post #128
nostrademons wrote: post #116

Earlier quoted context omitted.

By the same token, cryptocurrencies are backed by the computing networks underlying them, the potential future usage of these computing networks, and by your ability to buy guns, drugs, and hacks with them. This is also not gold (although you can buy gold-backed cryptocurrency: see Digix), but not nothing either. That's why cryptocurrency evangelists harp on adoption and new use-cases: the value of any currency is pr…

USD is backed (among other things) by the government accepting taxes in it. If you don't pay, they will come to your house with guns and take you away. This creates a demand for USD that is completely unlike any demand for crypto.

Again this weird argument. If the USD were valued due to its tax-demand, raising taxes would increase the value of the dollar!

Also the gov creates more supply to the dollar than the tax demand always, so its not really clear. And most taxation is a percentage of income or value measured in dollars itself.

This argument never clicked for me: where is it coming from?

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

#235

Post by mzs »

sctb wrote: post #23

Since the WSJ is hard-paywalled, we've updated the link from https://www.wsj.com/articles/bitfinex-used-tether-reserves-t... . We're happy to update it again if someone can suggest a better source!

WSJ isn't hard-paywalled though, just add "?mod=rsswn" to the end of the URL and open in a private window, here try it for yourself: https://www.wsj.com/articles/bitfinex-used-tether-reserves-t...

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

#236

Post by bitreality »

aijoe wrote: post #192
bitreality wrote: post #190

Earlier quoted context omitted.

Tether is currently being traded around 99 cents. The market, so far, has assigned a 1% devaluation, despite this report showing that they basically lost $850M. From what I can see on Coinmarketcap, there is $2.83 Billion Tether in circulation. So it would appear Tether has lost at least 30% of its assets (cash converted to Crypto Capital debt, which = toilet paper). I am shocked that people aren't taking this more s…

1% fluctuation is normal. Tethering is stabilized through arbitrage.

The only way Tether can be stablized through "arbitrage" is if there is a risk-free way to trade 1 Tether for 1 USD.

For the average user, there is no direct way to cash out your Tether for 1:1 USD. I imagine that big clients do have the ability to trade Tether for USD. Because of that, they will buy up discounted Tethers on exchanges and redeem them to Tether Company for 1 USD each.

HOWEVER, this clearly relies on Tether Company providing that exchange. If Tether Company STOPS allowing the big guys to do this arbitrage, then suddenly the house of cards would collapse very quickly. The longer Tether stays below 1 USD, the more pressure is being put on their company by arbitrageurs.

Furthermore, we know that Tether has made a loan to Bitfinex for $900M. The Tether Company therefore only has cash on hand for about 2/3 of the outstanding Tether, assuming they had 1:1 reserves prior to lending cash to Bitfinex.

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

#237

Post by kgwgk »

chimpburger wrote: post #125
ticmasta wrote: post #77

Earlier quoted context omitted.

>> 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. Th…

You misunderstood. With the "Fractional Reserve Banking" system, banks lend out money that is NOT under deposit. They are licensed to lend out money created from nothing. This is the mechanism by which money is created https://courses.lumenlearning.com/boundless-economics/chapte...

> banks lend out money that is NOT under deposit

What do you mean? From that link: “banks lend out most of the deposits they have collected”, “keep a fraction of their deposits in reserve and may loan out the rest”. Obviously they can not hold and lend the money at the same time.

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

#238

Post by ShorsHammer »

nonbel wrote: post #66
impostervt wrote: post #37

Predictably, 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.

Looks like the last shakeout, not a big deal to anyone who didn't trust tether to begin with: >"OAG does not seek lo enjoin or interfere with the orderly operation of Bitfinex or Tether' s legitimate businesses. if any. including orders by legitimate traders on the Bitfinex platform, or legitimate tether holders, to redeem their tethers for dollars. Indeed. protecting legitimate traders using the Bitfinex platform. a…

> protecting legitimate traders using the Bitfinex platform. and legitimate holders of tether. primarily those residing in New York

Bitfinex doesn't accept US customers though?

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

#239

Post by avinium »

hendzen wrote: post #114
ronsor wrote: post #30

Cryptocurrency exchanges seem to be full of fraud and deception.

Speaking as someone who was deeply interested in bitcoin in ~2013, cryptocurrency today is a wretched hive of scum and villainy. When someone tells me today that they are working on something related to crypto I make a mental note to never work with them or take anything they do seriously.

I feel the same about 99% of crypto participants - but you can't deny there are a handful of legitimate areas. IPFS and Golem come to mind.

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

#240

Post by bhouston »

lalaland1125 wrote: post #222
abakker wrote: post #110

Earlier quoted context omitted.

Lessons learned from sovereign debt crises: don't defend the peg. Let it float now, it will hurt more if you defend it all the way to insolvency. Devaluation is better than forced debt restructuring or full bankruptcy. Oh well, we'll see it all again.

That reasoning doesn't matter for Bitfinex because when the money runs out they can just exit scam.

Maybe they already have. 850m is missing right?
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