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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

#121

Post by albntomat0 »

jcfrei wrote: post #113
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.

The market doesn't care. Hasn't cared for years now, just look at the Kraken USDT/USD market which is freely tradable. Tethers are mostly backed by USD - no 100% but that's because some funds were seized due to regulatory scrutiny, not because they disappeared.

I'm not convinced your argument works. Bubbles exist until they suddenly don't.

This isn't a strong argument that it's a bubble, but the burden of proof is solidly on the tether folks to show that they're 100% backed, not the other way around.

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

#122

Post by lifty »

jMyles wrote: post #117
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.

> Tether detractors see this... while crypto currency fans Be reminded that the overlap in this venn diagram is enormous.

Absolutely! I’m part of that venn diagram and I am disappointed that there wasn’t more light shone on the whole thing.

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

#123

Post by dgellow »

im3w1l wrote: post #81
dgellow wrote: post #58

Earlier quoted context omitted.

It's the title of the linked press release, with a minor change to fit the maximum length required for HN submissions.

You make it sound like they have been taken down globally. That's not a "minor change".

How would the New York attorney general shut down the company globally? That doesn't make sense. But feel free to contact dang or other moderators and ask for a change of the title if you think that can be improved.

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

#124

Post by TrackerFF »

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…

If they are shady, then it's high time to employ and enforce regulations - if they can't regulate themselves, then someone else has to.

Arguing that this is old news, and that a small minority has been "in the know" doesn't hold much water either - the crypto scene has long since become mainstream, and as such, attracted regular masses.

In the end, it boils down to consumer protection.

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

#125

Post by ceejayoz »

psychlops wrote: post #98
ceejayoz wrote: post #76

Earlier quoted context omitted.

Madoff’s fraud took decades to unravel, too. You’d have looked silly declining to invest there, until the collapse.

Madoff took in large sums of money, gave out little and lied about solvency. Tether is 1/30th the market cap of bitcoin, yet there is a magical belief (based on anonymous articles) that it's the primary source of price levitation. If true, Grayscale would have this same power.

> Madoff took in large sums of money, gave out little and lied about solvency.

That's exactly what Tether has done?

Large sums? Check - tens of billions.

Gave out little? Check - https://cointelegraph.com/news/tether-explains-why-it-hasnt-....

Lied about solvency? They admit in this suit that they weren't 1:1 backed, despite asserting it on their website. They also claimed to be regularly audited, until they had to admit they'd never completed one. (Still haven't, to my knowledge?)

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

#126

Post by 35fbe7d3d5b9 »

lettergram wrote: post #118
35fbe7d3d5b9 wrote: post #104

Earlier quoted context omitted.

> You can take redemption from tether and they will wire you the money Tether says they will. Has anyone successfully done this? > on several exchanges it can be exchanged into fiat, for smaller participant.s No one says you can't trade USDT. But that requires a counterparty, and if it turns out that Tether is mostly backed by air they may evaporate as well.

That’s usually the way these things work. That’s why the AG is making statements like “stop the illegal activity” and stuff, it degrades trust. However, if you read the statement it’s a win for the crypto exchange. Only an $18m fine for supposedly “billions in fraud” (course if you read deeper, they found no fraud).

I'm surprised that you read a settlement narrowly focused on activities in 2017-2018 and apply it to today.

Tether was nearing a lifetime market cap of two billion when investigated. Their "100% backed!" claim at two billion turned out to be 13.8% backed.

They printed two billion USDT over the course of six days earlier this month. Wonder how backed that is.

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

#127

Post by londons_explore »

celticninja wrote: post #66
londons_explore wrote: post #49

Earlier quoted context omitted.

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,…

The settlement agreement[1] I suspect is a good middle ground.

It looks like the NYAG believes the loan from bitfinex to tether has now been repaid, but makes no claims about either having sufficient reserves to cover liabilities.

[1]: https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...

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

#128

Post by dgellow »

tectec wrote: post #108
jcfrei wrote: post #97

"Contrary to online speculation, there was no finding that Tether ever issued tethers [USDT] without backing, or to manipulate crypto prices" I hope that ends the spreading of FUD - claiming that bitcoin and other cryptos are propped up by the printing of fake tethers - which seems to spread here every time there is a sharp rise in prices.

Where is that quote from? I don't see it in the linked article

It's from https://www.theblockcrypto.com/post/95207/bitfinex-tether-ne....

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

#129

Post by CarelessExpert »

ForHackernews wrote: post #80
bhouston wrote: post #61

Earlier quoted context omitted.

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.

This is only true if we accept your unstated premise that BTC itself isn't a big ole Ponzi scheme. I guess we could argue, "It's good news for our slightly more subtle fraud if the blatant, obvious fraud gets stamped out."

> This is only true if we accept your unstated premise that BTC itself isn't a big ole Ponzi scheme.

Let's be clear, here: There's a substantial difference between Bitfinex engaging in outright financial fraud vs a bunch of people buying into the value of a virtual currency for reasons no one can understand.

BTC is not a ponzi. It's just a long-running speculative bubble. A collective delusion. You can disagree with that, sure, but it's certainly no more a fraud than Beanie Babies or tulip bulbs.

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

#130

Post by PragmaticPulp »

thedudeabides5 wrote: post #90
pavlov wrote: post #79

Earlier quoted context omitted.

> (probably is now) This kind of argumentation makes cryptocurrency proponents so insufferable. There’s no evidence Tether is backed, but somehow we can just assume in a parenthesis that they probably are, and then go on a tangential rant about banks or fiat or digital gold or something.

Exactly. We've traded confidence in centralized, old world financial institutions, for decentralized, techno-utopian...financial institutions. Same s**, different marketing.

At least banks have to operate within the realities of regulations and legal recourse. It’s not perfect, but it does provide a forcing function to make them think long and hard before doing anything that might be fraudulent.

Cryptocurrency proponents like to tout crypto’s ability to escape regulation as a good thing, while ignoring that the same property makes it a dream come true for financial fraud schemes.

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