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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

#281

Post by TheOtherHobbes »

Nursie wrote: post #274
panarky wrote: post #126

Earlier quoted context omitted.

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's basically a giant game of chicken AFAICT, because tether is so endemic to the market that if the market as a whole gives up on that valuation then everything goes boom.

It's basically a giant game of bullshit - just the latest iteration of "Never give a sucker an even break."

When you have nothing to trade but trust and hope, people who take advantage of trust and hope are always massively rewarded.

Occasionally someone crosses the wrong people and jail time ensues, but if you're politically adept enough to avoid that - at least until you die and/or disappear - no career pays as well as financial fraud.

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

#282

Post by tim333 »

avinium wrote: post #239
hendzen wrote: post #114

Earlier quoted context omitted.

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.

I'm not sure IPFS uses blockchain? It seems to work like bittorent.

Golem I'll give you might be a legit use.

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

#283

Post by askmike »

bitcoinbutter wrote: post #254
ehrtt wrote: post #243

Earlier quoted context omitted.

Not true. You can trade USDT for USD on Kraken.

That's not arbitrage though. Kraken has a market rate. The only way to arbitrage the USDT / USD rate is if you have a reliable place to sell USDT at 1:1.

You can definitely use Kraken's market to arb:

- buy BTC with your USD on Coinbase Pro.

- sell your BTC into USDT on Binance.

- Sell your USDT back into USD on Kraken.

It really doesn't matter if the last step is 1:1 or another rate. If the price between Coinbase and Binance is big enough you can profitably arb this.

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

#284

Post by andrewdubinsky »

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.

This is the reason there are 4-5 tether competitors. All who have more reliable management & better audit controls.

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

#285

Post by jacobush »

LandoCalrissian wrote: post #210
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.

I'm pretty sure most people here understand how fractional banking works. Tether isn't a bank, it's claiming to be a currency, and not only that but one that is fully backed by the reserves of their US dollars. This is like a government claiming they lost their most sovereign currency and have no idea where it went.

Now, the USD is the most trustworthy fiat currency on the planet, but it's a little (ironic? don't know) interesting the USD in turn is also a scheme of sorts. Albeit with a very powerful guarantor. But as others have said here, the banks don't hold funds for all their accounts. If each Tether was backed not only by funds in a bank, but actual funds at the Fed, that would be a true 1:1 backing.

https://www.econlib.org/who-should-be-allowed-to-deposit-mon...

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

#286

Post by tim333 »

55555 wrote: post #267

So, let me get this straight... Crypto Capital has claimed that the money is frozen and that's why they can't send it back. Execs at Bitfinex/Tether believe maybe Crypto Capital's principal, Ivan Lee, has stolen it and that's why he won't send it back. The NY AG contacted Portugese and Polish authorities and, from them, was informed that there were no official orders freezing Crypto Capital bank accounts in those cou…

Recent release from Tether:

"The New York Attorney General’s court filings were written in bad faith and are riddled with false assertions, including as to a purported $850 million ‘loss’ at Crypto Capital. On the contrary, we have been informed that these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded. We are and have been actively working to exercise our rights and remedies and get those funds released.” https://cointelegraph.com/news/tether-hits-back-at-claims-it...

So basically they are saying Ivan didn't nick it - the authorities froze it.

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

#287

Post by 55555 »

stzup7 wrote: post #268
55555 wrote: post #267

So, let me get this straight... Crypto Capital has claimed that the money is frozen and that's why they can't send it back. Execs at Bitfinex/Tether believe maybe Crypto Capital's principal, Ivan Lee, has stolen it and that's why he won't send it back. The NY AG contacted Portugese and Polish authorities and, from them, was informed that there were no official orders freezing Crypto Capital bank accounts in those cou…

"The NY AG contacted Portugese and Polish authorities and, from them, was informed that there were no official orders freezing Crypto Capital bank accounts in those countries" I've read the 24 pages report and missed that part, could you quote it please? To me, the whole thing looks like this: "Hey Bitfinex, you can't keep running your operations when you're missing 800M. We know that, because we're the one who seize…

Oops, I misread page 15 and confused the Respondents for the OAG. I was skimming. My bad.

> To me, the whole thing looks like this: "Hey Bitfinex, you can't keep running your operations when you're missing 800M. We know that, because we're the one who seized that money from you"

This sounds right. Pretty interesting stuff

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

#288

Post by carrja99 »

ccjnsn wrote: post #253
aedron wrote: post #249

This article goes to great alarmist lengths, past the point of being deceiving. Just the very first line: > One of the world’s most widely traded virtual currencies faces renewed doubts about its stability [...] Tether is nothing in terms of crypto currency penetration. It does not even have a percent of daily trading. Then a few paragraphs down: > [...] within an hour of the attorney general’s statement and Tether s…

For something pegged 1:1 with the US dollar a 1.4% decrease is quite unusual. It's volume is 2nd only to Bitcoin per [1]coinmarketcap. With your 3rd point about pricing changes, yeah correlation/causation, it's a theory that is plausible though. 1.coinmarketcap.com

You would think, but not for tether. I've seen it sit comfortably at 98-99% and even once dip as low as 89%.

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

#290

Post by shawnz »

csa wrote: post #121
shawnz wrote: post #96

Earlier quoted context omitted.

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

> That cryptocurrencies have different risks than other kinds of financial technologies? These are known risks that have regulations that significantly reduce the chance of them happening in regulated currency markets and banks. Cryptos took the Wild West approach due to... something... and somehow think that the scams that people have used in the past with banks will not be used again with crypto. SURPRISE!!!

> somehow think that the scams that people have used in the past with banks will not be used again with crypto. SURPRISE!!!

But nobody thinks that. That's the point I was just making.

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