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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

#161

Post by kenneth »

bronzeage wrote: post #16

I'm waiting patiently for the whole Tether printing scheme to fall and crush to finally purchase Bitcoin / Ether. However I'm not viewing them as inflation hedges so long as Bitfinex / etc. are allowed to continue with their obvious money printing scheme. When most crypto trading volume is traded at trustworthy exchanges which actually hold dollars as much as they say they do, I'll trust $/BTC to be a fair market. It…

I have the same doubts you do about Tether's legitimacy, but there's a few conclusions I believe you're jumping to which I think don't quite hold:

- Tether's volumes being greater than other crypto-currencies don't have much impact on the legitimacy of other crypto-currencies. The volume is so high because USDT is the other side of most crypto-currency trading pair. Given the liquidity of the market, you can trade almost anything (BTC, ETH, all alts, etc) against USDT without being exposed to any underlying USDT risk.

- The market value of crypto-currencies minus any deposit-backed USD coins far exceeds those coins. Tether "printing" coins out of nothing cannot alone explain the market capitalization of cryptocurrencies.

- Even if everything alleged were true, it really wouldn't be a drop in the bucket compared to the kind of shenanigans central banks have been pulling for centuries. If the crypto-currency market is illegitimate due to money printing by Tether, then so is the conventional financial system due to quantitive easing by the Federal Reserve and other central banks around the world.

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

#162

Post by CapmCrackaWaka »

safog wrote: post #148
bronzeage wrote: post #16

I'm waiting patiently for the whole Tether printing scheme to fall and crush to finally purchase Bitcoin / Ether. However I'm not viewing them as inflation hedges so long as Bitfinex / etc. are allowed to continue with their obvious money printing scheme. When most crypto trading volume is traded at trustworthy exchanges which actually hold dollars as much as they say they do, I'll trust $/BTC to be a fair market. It…

You'd need to do better than that. How exactly does printing USDT lead to BTC price inflation? I haven't heard anything convincing yet. Most of the vol doesn't come from the BTC USDT pair. Exchanges don't seem to be doing anything shady like manipulating the price upwards by themselves.

The story is that Tether has been printing tethers and buying Bitcoins. However, they haven't released any concrete holdings or submitted to an audit AFAIK, so there's a lot of speculation on how big of a problem this actually is.

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

#163

Post by kpaystaxes »

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.

This isn't a "ruling" at all. The parties just reached a settlement agreement and Bitfinex/Tether did not admit any wrongdoing.

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

#164

Post by Forbo »

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…

If they're backed then they can prove it with an audit. Considering their last auditor told them to kick rocks, I'm highly skeptical.

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

#166

Post by chollida1 »

inter_netuser wrote: post #91
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.

You can take redemption from tether and they will wire you the money, they are in fact registered and regulated. on several exchanges it can be exchanged into fiat, for smaller participant.s It would collapse a long time ago, if it weren't backed.

I've tried, six months on they are still stringing me along saying we'll get back to you.

As far as I know tether only allowed a few crypto "king makers" to redeem tether, and even then, only at a very small scale.

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

#167

Post by SilasX »

rthomas6 wrote: post #78
bronzeage wrote: post #16

I'm waiting patiently for the whole Tether printing scheme to fall and crush to finally purchase Bitcoin / Ether. However I'm not viewing them as inflation hedges so long as Bitfinex / etc. are allowed to continue with their obvious money printing scheme. When most crypto trading volume is traded at trustworthy exchanges which actually hold dollars as much as they say they do, I'll trust $/BTC to be a fair market. It…

I've always championed DAI for a stablecoin. I don't know why it's not more popular. https://makerdao.com/en/ Instead of it being (supposedly) backed by a dollar reserve, it's collateralized by ETH and several ERC20 tokens in a smart contract. The smart contract does things to make DAI tend toward $1. It's been out for years and I think it has worked pretty well: https://coinmarketcap.com/currencies/multi-collateral-…

Can you summarize the dynamics/phenomena that those smartcontracts in DAI exploit to maintain stable value? What stops it from gaining -- or, more importantly, losing -- value?

I couldn't tell from the link.

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

#168

Post by PragmaticPulp »

andreaorru wrote: post #15
Clewza313 wrote: post #13

Earlier quoted context omitted.

Huh? The NYAG press release literally says: "Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie." Edit: The difference between the two statements is that Tether can still be "backed" by something other than USD, notably crypto. And the PR is silent on what exactly Tether is backed by. This saga isn't over yet.

I'm also confused by the contradicting news. CryptoTwitter (and the markets) reacted enthusiastically...

When was the last time CryptoTwitter didn’t try to spin something as good for Bitcoin?

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

#169

Post by spiralx »

redblacktree wrote: post #152
erwan wrote: post #133

Earlier quoted context omitted.

You can inflate the money supply and still be "deflationary" if the convenience yield of holding the money (tokens, UTXOs, or whatnot) exceeds or neutralize that inflation rate. You make an excellent point, Bitcoin doesn't have to overtake gold or become a global-reserve to change the world. It just has to be a plausible alternative that enables people to opt-in or out of the system. It has largely already achieved t…

> I'm hopeful for a future of monetary pluralism. My big concern about monetary pluralism is what happens to US citizens, when their day-to-day currency stops being used as the reserve currency for the world? I have trouble imagining any way in which that turns out good for me, as someone living and working in the US. Anything you can do to assuage my fears, since you seem to be educated on the matter?

For one the USD is only the largest reserve currency used internationally: GBP, EUR and JPY are also used as reserve currencies. For another the US has been trying to reduce the role of the dollar as a reserve currency because it actually has significant downsides and fewer benefits than is popularly portrayed - this even has it's own term, "exorbitant privilege". Here's Ben Bernanke talking about it:

https://www.brookings.edu/blog/ben-bernanke/2016/01/07/the-d...

TL;DR: the USD's reserve currency status is very much exaggerated.

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

#170

Post by PragmaticPulp »

erwan wrote: post #109
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.

That's a really good point, this settlement is extremely favorable to Tether and Bitfinex. It's odd to see people persist in pinning Bitcoin's market performance on Tether issuance after reading this settlement from NYAG. Chunks of Tether collateral weren't fully liquid but my takeaway is that they operated on a genuine best-effort basis. As another comment put it, Tether definitely operated in a grey area legally -…

This settlement shows they operated as if Tether was fully backed and claimed Tether was fully backed when they knew it was not.

How it that extremely favorable?

If someone sells something they don’t have under false pretenses, that’s fraud. It’s not a simple liquidity issue.

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