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Bitfinex and Tether required to end all trading activity with New Yorkers

ag.ny.gov

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Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#61

Post by bhouston »

PragmaticPulp wrote: post #20
raiyu wrote: post #9

Is this the first official ruling on tether that shows it isn’t backed 1:1 by the US dollar? That has long been speculated, but if this is the first official verification how does that affect the Market. Especially the self dealing of Bitfinex.

Tether themselves essentially admitted that it wasn’t fully backed in 2019: https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7... The strangest part of the Tether story is how much of it was obvious or even out in the open. Cryptocurrency proponents were happy to look the other way as long as prices were only going up. I suspect cryptocurrency proponents and Bitfinex are working hard to spin this as a win f…

Getting rid of the fraud (tether) at the core of btc will strengthen btc. This cryptocurrency proponents should be all for it.

I have honestly been surprised how long this obvious tether saga has gone on.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#62

Post by lifty »

bhouston wrote: post #53
lifty wrote: post #46

This news is so funny. Tether detractors see this as confirmation that they were right all along, while crypto currency fans say that this is confirmation that it was FUD all along. No bridges were built in this endeavour.

I like btc but in a declaring that tether is fraud isn’t about building bridges, it is about being correct. Getting rid of tether is the best way to legitimize btc. The sooner the better. It is confusing why you care about bridges with regards to fraud. When was fraud related to consensus building activities? Huh?

I meant it as a figure of speech, in that the 2 parts can't see eye to eye. I care about the legitimacy of the space and I am not a big fan of these backed stable coins, because they can't be easily verified.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#64

Post by TacticalCoder »

Clewza313 wrote: post #28
filleokus wrote: post #21

So there are 34B outstanding USDT right now. In the documents I see talk about some 850M USD is missing. Are all the other ≈ 33B USDT backed? Will we only know that on the first report they obliged to do each quarter? Will those reports be made public? I'm confused what to make of this.

The NYAG investigation is about what happened up to 2019 or so. What has happened since (which includes printing 33 of those 34 billion) is a separate matter, and NYAG is basically saying it's irrelevant because nobody in NY should be able to use Tether/Bitfinex anymore.

What's confusing is that in addition to the slap on the wrist of 18.5m and the prohibition for BitFinex to operate in NY, it is written:

"agreement with iFinex, Tether, and their related entities will require them to cease any further trading activity with New Yorkers, as well as force the companies to pay $18.5 million in penalties, in addition to requiring a number of steps to increase transparency."

What are these steps to "increase transparency"? On activities related to these 850m or on the 33 bn+ printed since then?

To benefit whom? New Yorkers cannot use BitFinex anymore. If it's now irrelevant to the NYAG because from NY's point of view BitFinex is out, why ask for "a number of steps to increase transparency"?

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#65

Post by PragmaticPulp »

api wrote: post #48
PragmaticPulp wrote: post #31

Earlier quoted context omitted.

Cryptocurrency isn’t the only way to escape USD inflation. Investors have been investing to avoid inflation long before Bitcoin was invented. Investing in virtually any asset other than cash will, almost by definition, shield you from inflation. Inflation is an increase in asset prices, resulted in reduced buying power. You only need to invest in assets (stocks for example) and minimize holdings in cash if your goal…

> Investing in virtually any asset other than cash will, almost by definition, shield you from inflation. ... which is why virtually every nation on Earth adopted some kind of inflationary fiat currency. It pushes money to be invested, not held. Wealth is a verb, not a noun.

The world would certainly be a strange and sad place if the best thing for everyone to do with their wealth was hoard it in currency.

Not holding wealth in cash has been investing 101 material long before cryptocurrency. It is fascinating how crypto proponents took over that narrative to imply that crypto was the only investment that could escape inflation.

They’ve also spread an idea that money printing is the singular source of inflation, which isn’t true at all. Bitcoin, for example, is an inflating asset due to hype-driven demand. It hasn’t spiked upward 100% of the time because USD became 50% less valuable overnight

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#66

Post by celticninja »

londons_explore wrote: post #49
capnorange wrote: post #23

wait.. this seems contradictory to this -- https://www.theblockcrypto.com/post/95207/bitfinex-tether-ne...

I think I trust ag.ny.gov much more than theblockcrypto.com... It suggests the latter is 100% made up news, possibly with the aim of market manipulation by sentiment bots who will be fooled for a few minutes until humans intervene.

I would also prefer to trust that source, however it is written as a press release. So they write it to make them look as positive as they can and stress the Bitfinex bad points. The blockcrypto article seems to indicate that the accounts were now balanced, but the ag.ny.gov makes no mention of it, which is expected if they are still trying to paint bitfinex as a wrongdoer, but calls into question their impartiality, so it becomes difficult to accept either at face value.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#67

Post by bhouston »

BelenusMordred wrote: post #59
temp wrote: post #19

So even back in 2017, Tether was backed only by a fraction of USD. >Until September 15, 2017, the only U.S. dollars held by Tether ostensibly backing the approximately 442 million tethers in circulation was the approximately $61 million on deposit at the Bank of Montreal. Wonder how much of the tether they pumped out through last year has been backed?

Do people here not realise that people give them bitcoin and other cryptocurrencies for that in exchange for tethers? If they were only a week late in converting it to USD they'd be up tens of billion in profit this year. The lack of critical thinking and mindless mob mentality around tether is amusing and has been going on for years now. Proven wrong everytime.[1][2][3] Even this announcement is dumb politiking that…

And if they used made up tether to buy a bit of extra btc or a lot they would be even further ahead. The easily exploitable opportunities for fraud surrounding tether is huge. Bernie Madoff should be jealous.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#68

Post by teknopurge »

andreaorru wrote: post #12

"Contrary to online speculation, there was no finding that Tether ever issued tethers [USDT] without backing, or to manipulate crypto prices," said Weinstein, a former federal prosecutor. [0] [0] https://www.theblockcrypto.com/post/95207/bitfinex-tether-ne... EDIT: For some reason I'm being downvoted, but I'm genuinely curious to understand why this news is being simultaneously interpreted in two opposite ways.

From 2019:

https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7...

"The USDT stablecoin is only about 74 percent backed by fiat equivalents as of April 30, says its issuer’s general counsel.

Tether, the company behind USDT, holds about $2.1 billion in cash and short-term securities, wrote its general counsel Stuart Hoegner in an affidavit Tuesday. Hoegner is also general counsel to Bitfinex, a crypto exchange which shares executives and has overlapping owners with Tether.

The two companies are at the heart of allegations by the New York Attorney General, who says Bitfinex borrowed more than $600 million from Tether after losing as much as $850 million to a currency converter."

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#69

Post by jkhdigital »

owenmarshall wrote: post #40
jkhdigital wrote: post #26

Honestly, this is kind of a nothingburger. The press release seems to merely reinforce what was an open secret in the cryptocurrency world, which is that Bitfinex and Tether have played fast and loose with whatever reserves they received for their Tether issuance. Which is, of course, utterly unremarkable to anyone who knows anything about how financial sausage is really made. Bitfinex and Tether are shady. Caveat em…

Considering the meteoric rise of BTC is tied so deeply to Tether issuances, it sounds an awful lot like you’re trying to convince us the emperor really has clothes.

Correlation is not causation. And your mental model of how the cryptocurrency markets work is likely way too simplistic--did you know that cryptocurrency perpetual swap derivatives clear over $350B in daily volume?

Pretend for a moment that Tether pulls a Nixon, and closes the "dollar window" ending redeemability. Then what would be the difference between Tether and e.g. the BitMEX XBTUSD perpetual swap contract? Just think about it for a while.

Re: Bitfinex and Tether required to end all trading activity with New Yorkers

#70

Post by bhouston »

lettergram wrote: post #57

It appears from the link in the settlement agreement: https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... Tether wasn’t backed at all times. The argument was that this happened due to asset seizures in Poland and Portugal in 2017-2018. https://www.theblockcrypto.com/post/95207/bitfinex-tether-ne... Seems to me they couldn’t prove malicious intent, so they suggested they stop trading. Frankly this seems a…

The issue is that if it isn’t backed they can print more at any time. But they claim it is backed to avoid inflation devaluation of the currency. Banks are not lower to print currency but tether can at any time. The potential for fraud sufrounding tether is huge and no one is checking over them. Do you trust them? They are already known for lying. This is why banking regulations exist.
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