Bitfinex and Tether required to end all trading activity with New Yorkers • Hacker News Board

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

#171

Post by BenoitEssiambre » Tue, Feb 23, 2021, 2:50 PM UTC

PragmaticPulp wrote: post #31

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…

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…

On top of that, any asset for which demand comes mostly from being an "inflation hedge" is a bad inflation hedge since prices will rise when people want more inflation hedging and drop when they want less hedging, meaning the majority of people inflation hedging will buy high and sell low.

Gold has had that dynamic for a long time, which is one reason it is not considered a good investment most of the time. Buy assets that are productive and you will be much less subject to that. Real inflation hedges look like stockpiles of goods, inventory or production capacity thereof.

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

#172

Post by wpietri » Tue, Feb 23, 2021, 2:51 PM UTC

PragmaticPulp wrote: post #74

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…

> Sure, tether wasn’t backed at all times (probably is now), Even Tether admitted that they weren’t backed by funds, and that was before they printed most of their current supply: https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7... I don’t understand why anyone would be in a rush to take them at their word when every new piece of evidence demonstrates that Tether’s operators are not interested in behaving…

I think it has a pretty simple explanation. The crypto community started with a few dedicated idealists. But it quickly attracted loons, fantasists, scammers, and get-rich-quick dreamers, along with some reasonable people interested in the hype.

Over time, as the space has produced almost no actual utility and generated billions in theft, fraud, and losses, the reasonable people generally got out, often with fingers burned. A few idealists remain. But by now the dominant group are the people low on sense and scruples who are hoping to Make Money Fast, so anything that keeps the industry aloft is great by them.

That's how bubbles work, alas. The dot-com bubble was less extreme, but still at the end there was all sorts chicanery that made no sense to a vaguely rational actor. We saw it again in the mortgage bubble. There was one bank CEO who stayed out of the more dubious mortgages; when questioned, he said, "If something grows too fast, it's a weed." But there were plenty of hucksters saying that everything was normal and good.

The good news is that bubbles eventually pop. I loved the post dot-com bubble period! Most of the MBA-holding locusts who had rushed in went away again. I hope the people truly interested in digital financial innovation enjoy a similar period of quiet soon.

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

#173

Post by kaibee » Tue, Feb 23, 2021, 2:55 PM UTC

kenneth wrote: post #161

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 al…

> 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.

The difference is that central banks aren't lying about whether they're printing money or not.

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

#174

Post by olalonde » Tue, Feb 23, 2021, 2:56 PM UTC

The hypocrisy. Tether was pushed to the "darkest corners of the financial system" *because* of regulators. It seems they tried their best to remain solvent and didn't steal cash reserves. But regulators made their life hard at every turn. If you care about protecting USDT holders, maybe stop interfering with their operations and stop seizing their funds? And now, they have to submit regular reports to the NY regulators while being banned from doing any business in NY? I doubt many USDT holders are very happy today about the NYAG's attempts to protect them.

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

#175

Post by gruez » Tue, Feb 23, 2021, 2:56 PM UTC

pavlov wrote: post #79

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…

> (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.

>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.

Ah yes, because all cryptocurrency proponents are pro-tether.

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

#176

Post by cdiddy2 » Tue, Feb 23, 2021, 2:58 PM UTC

cwhiz wrote: post #101

cdiddy2 wrote: post #47

Earlier quoted context omitted.

no its not. that is bad data from no name exchanges lying about their volume

Ha. The exchange reporting the highest volume is... Bitfinex. I believe you that Bitfinex would lie. Coinbase is reporting $210 billion daily volume. Is every market lying? Or are you just personally wrong?

where on earth are you seeing coinbase doing $210 billion daily volume? Coinbase has only done 94 billion of volume for the month of February so far

monthly volumes by exchange: https://www.theblockcrypto.com/data/crypto-markets/spot/cryp...

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

#177

Post by aplummer » Tue, Feb 23, 2021, 3:00 PM UTC

olalonde wrote: post #174

The hypocrisy. Tether was pushed to the "darkest corners of the financial system" *because* of regulators. It seems they tried their best to remain solvent and didn't steal cash reserves. But regulators made their life hard at every turn. If you care about protecting USDT holders, maybe stop interfering with their operations and stop seizing their funds? And now, they have to submit regular reports to the NY regulato…

From the article:

> Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines,” said Attorney General James. “Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie

Are you claiming this is false and they paid the 18.5m penalty for not lying about USD reserves?

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

#178

Post by deanmoriarty » Tue, Feb 23, 2021, 3:00 PM UTC

devoutsalsa wrote: post #147

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…

Stocks prices get negatively impacted by rising interest rates. With interest rates at ~0%, there's little money to be made in bonds, savings accounts, or anything that pays interest income, so people put money into stocks w/ the hope the stocks will go up. When interest rates go up to fight inflation, there's more incentive to put money into bond markets, which means there's not as much money going into stocks, whic…

What’s your recommendation for least-worse inflation hedge?

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

#179

Post by ncallaway » Tue, Feb 23, 2021, 3:01 PM UTC

ssakamoto wrote: post #38

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…

Both are still printing machines. Dollars are backed by faith in the USA. Is there any difference ? Powell - "We print money digitally. As a central bank, we have the ability to create money." https://www.youtube.com/watch?v=ff6SDsaS7rI

I mean, if you accept that Bitfinex is printing tether, then the difference would seem to be the fact that Bitfinex is lying about it while the US Government isn't lying about it?

The ability of the US Government to create more dollars is a well understood aspect of the financial system. The US Government acknowledges is has the power to print money, and regularly tells us how much it is printing.

Bitfinex claims they do not print USDT and that it is backed by USD.

For a system that's based largely on trust (for both the USD and USDT), lying is a significant problem.

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

#180

Post by jcfrei » Tue, Feb 23, 2021, 3:01 PM UTC

albntomat0 wrote: post #121

jcfrei wrote: post #113

Earlier quoted context omitted.

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.

I'm not arguing - I'm making a statement. It's evident from market prices that investors don't care. Whether the market should care is another discussion but the parent asked about the market's reaction.