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

#371

Post by DebtDeflation » Tue, Feb 23, 2021, 6:58 PM UTC

lazide wrote: post #312

dcolkitt wrote: post #296

Earlier quoted context omitted.

> There's no way to transfer USDT into USD. The few exchanges that say they offer withdraws actually don't if you go and try. There is an easy way. Swap USDT to USDC on Curve. Deposit USDC on Coinbase. Convert USDC to USD on Coinbase. Withdraw USD. I'm not saying I disagree with your overall thesis. But this specific point makes it sound like USDT is some sort of roach motel ("you can get in, but you can't get out").…

That's fairly easy?!?! That's a textbook yak shaving exercise if I heard of one, and seems like it would have to involve multiple parties during the exercise. Many exchanges have pretended for a long time that USDT is 'the same' as dollars, and there are going to be a lot of folks pissed that it isn't actually the same thing.

>That's fairly easy?!?! That's a textbook yak shaving exercise if I heard of one

This. If Tether truly were just a token backed 1:1 with USD on deposit at a commercial bank, you would not need to make multiple hops across multiple entities to actually convert it to dollars.

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

#372

Post by kragen » Tue, Feb 23, 2021, 7:00 PM UTC

vkou wrote: post #366

UncleMeat wrote: post #265

Earlier quoted context omitted.

The same four countries get brought up by BTC proponents all the time. Yes, evading authoritarian regimes can be useful. But like 1/3 of the planet lives in just India/China. Going from "a use case is sending cash from the US to your family in Iran" to "2/3 of the world population wants this" is a big leap.

Not to mention that the reason you can't send money to Iran is not because of any problem in Iran - it's because the United States doesn't want you to do it. If you live in the US, and you are using bitcoin to circumvent the embargo, you're just adding to the list of crimes you're committing.

Family remittances to Iran are specifically exempted from the USA embargo, but good luck finding a way to do that through a bank: https://www.wiggin.com/wp-content/uploads/2019/09/26580_advi...

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

#373

Post by quentinadam » Tue, Feb 23, 2021, 7:04 PM UTC

dudus wrote: post #272

I've been following Tether for quite a long time. I have no absolute proof it is a scam but the writing is on the wall. Here are some facts. - The current Market Cap of USDT is 34 Billion Dollars. It was 4B this time last year. Since the value is pegged this means there has been an influx of cash of 30 B into this shady company in the last year alone. Who invested this money? We have no idea since Tether doesn't disc…

> There's no way to transfer USDT into USD. The few exchanges that say they offer withdraws actually don't if you go and try.

It's perfectly possible to exchange USDT for USD and withdraw USD to your bank account; it does not involve complicated steps nor outrageous fees. Kraken, for example, has a very liquid USDT/USD market, is a well respected exchange, and processes USD withdrawals that arrive within minutes to US bank accounts. I'am speaking as an industry insider and hedge fund manager that trades ~$1B/month on the crypto markets.

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

#374

Post by vmception » Tue, Feb 23, 2021, 7:05 PM UTC

jdemaeyer wrote: post #368

vmception wrote: post #290

Earlier quoted context omitted.

Almost all fiat deposits into Bitfinex create USDT. Thats an additional fact that the amount is in line with the amounts that would be deposited into any big exchange. If Coinbase minted USDC whenever someone deposited, you would see the same kind of growth. The basis of your entire post is assuming impropriety based on pretty normal behavior with the addition of the business quirk of when USDT is created. The abilit…

If fiat deposits into Bitfinex create USDT, shouldn't fiat withdrawals from Bitfinex burn USDT? I'm having trouble to find comprehensive data on USDT burns but https://coinmarketcap.com/headlines/news/tether-just-burned-... seems to suggest that one billion is extraordinary (and those weren't removed from circulation but swapped to another chain), and Tether finds it Twitter-worthy when they burn 100 million: https:/…

I agree and have always found this interesting. But it is similar behavior in more transparent stablecoins. Only Gemini’s GUSD has seemed to completely burned to nothing at one point. But USDC and DAI have growth so similar to Tether during bear markets that I cant put the lack of burns squarely on Bitfinex.

Either there is a broader accounting issue with minting and burning methodologies or people/entities really do hold.

During bear markets large market participants are still buying, and a tiny portion of people are providing the price discovery, and this is mirrored in the increasing amounts of crypto that have not moved from addresses in a long time.

Many people hold the stablecoin itself, instead of going back to fiat. So there is growth of all market participants, even during bear markets when other cryptos are falling out of favor.

Thinking out loud, I've paid a lot of graphic designers and marketers in India this year in Tether. They arent familiar with crypto but just notice that their Unocoin app takes it. We’re not doing paypal, and all fiat transfers are domestic with none of fees, time, or scrutiny that an international fiat transfer would have.

The nature of all stablecoins is that if the supply does not match the demand then there are arbitrage opportunities to mint more, which can be initiated by the user. If Tether is worth $1.02 then you can mint a new tether by depositing on Bitfinex and selling that Tether for a 2% premium.

So if all the stablecoins have similar growth patterns, the things going for Tether are simply first mover advantage and greater clout in Asia.

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

#375

Post by saalweachter » Tue, Feb 23, 2021, 7:06 PM UTC

varispeed wrote: post #354

saalweachter wrote: post #297

Earlier quoted context omitted.

The innovation of Bitcoin is that it is a decentralized Ponzi scheme. Bernie Madoff's scheme fell apart because it was centralized, and so, once you arrested Madoff, it was over. The end. There's no one at the center of Bitcoin. There are big players, sure, but they are all replaceable. It's happened before and it will happen again. And each time one exchange or big player is arrested, shut down, or slinks away havin…

Almost every currency is a ponzi scheme - that does not only apply to crypto.

Wombats poop cubes -- they stack them to mark their territory.

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

#376

Post by lazide » Tue, Feb 23, 2021, 7:08 PM UTC

ban5wall wrote: post #347

lazide wrote: post #324

Earlier quoted context omitted.

Is 'pretty normal business behavior' pretending two entities (bitfinex and Tether) are arms lengths entities with no relationship to each other to hide the conflict of interest, along with the provably lying about the actual backing of the coin, and using what were supposed to be customer trust funds to bail out what was supposed to be an explicitly stated unrelated business? If so - be aware those are felonies in ma…

Surprisingly, yes. That is fairly normal in financial institutions. It seems nonsensical at a first glance, but: https://www.investopedia.com/articles/analyst/090501.asp

What you are pointing to is expressly pointing out that 1) it is illegal, 2) it is illegal for a very good reason, 3) if anyone finds out the illegal things going on, it will likely result in catastrophic (or at least very, very expensive) consequences.

The pretending part that Tether and Bitfinex were doing was fundamentally different than the walling happening within financial institutions, where it has to be disjoint staff, disjoint control/leadership, and if someone sneaks through compliance and shares data (wink wink) it is highly likely someone will get fired if compliance finds out.

In the Tether/Bitfinex issue, they shared board members and ownership despite claiming they didn't in public, and were misrepresenting themselves in a very material way as independent.

If you were just adding some information, apologies. If you were advocating that clear evidence someone is brazenly committing a crime is not a justifiable and strong reason to distrust them, or even that it is inappropriate to hypothesize how they could be getting rich while continue to do similar things - then yikes?

If you were saying Situation Normal, All Fucked Up - then extra yikes?

Goldman Sachs (or some random VC firm) say might have some subtle versions of this going on, but if they were doing what Tether is and has been doing right now, they wouldn't be a solvent entity for very long. That Tether is hiding from jurisdictions (for now) in a way that Goldman can't doesn't inspire confidence in their trustworthiness or stability going forward, as they're clearly on the radar now and blood is in the water. Along with a lot of money and some high profile political promotions, potentially.

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

#377

Post by firekvz » Tue, Feb 23, 2021, 7:13 PM UTC

vmception wrote: post #290

dudus wrote: post #272

I've been following Tether for quite a long time. I have no absolute proof it is a scam but the writing is on the wall. Here are some facts. - The current Market Cap of USDT is 34 Billion Dollars. It was 4B this time last year. Since the value is pegged this means there has been an influx of cash of 30 B into this shady company in the last year alone. Who invested this money? We have no idea since Tether doesn't disc…

Almost all fiat deposits into Bitfinex create USDT. Thats an additional fact that the amount is in line with the amounts that would be deposited into any big exchange. If Coinbase minted USDC whenever someone deposited, you would see the same kind of growth. The basis of your entire post is assuming impropriety based on pretty normal behavior with the addition of the business quirk of when USDT is created. The abilit…

How come you just come here telling that deposits in bitfinex creates USDT

But Paolo himself post that all the usdt minted is 'tron replenish' everytime whale alert tweets about 800,000,000 USDT frwshly minted

So, basically, in your intentions to defend USDT you are even contradicting what its own CEO says...

It's also funny how tesla 1.5b investment and microstrategy few millions buy are to be 'celebrated' as big and huge, yet you are trying to convince us there is people depositing 800m daily into bitfinex?

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

#378

Post by grey-area » Tue, Feb 23, 2021, 7:13 PM UTC

jdemaeyer wrote: post #368

vmception wrote: post #290

Earlier quoted context omitted.

Almost all fiat deposits into Bitfinex create USDT. Thats an additional fact that the amount is in line with the amounts that would be deposited into any big exchange. If Coinbase minted USDC whenever someone deposited, you would see the same kind of growth. The basis of your entire post is assuming impropriety based on pretty normal behavior with the addition of the business quirk of when USDT is created. The abilit…

If fiat deposits into Bitfinex create USDT, shouldn't fiat withdrawals from Bitfinex burn USDT? I'm having trouble to find comprehensive data on USDT burns but https://coinmarketcap.com/headlines/news/tether-just-burned-... seems to suggest that one billion is extraordinary (and those weren't removed from circulation but swapped to another chain), and Tether finds it Twitter-worthy when they burn 100 million: https:/…

Yes it’s a scam and 30 billion dollars deposited in a year is a laughable claim, particularly from a company with a history of lies and fraud. Nobody in the crypto space calls them on it because the fact they get away with it calls into question the entire ecosystem.

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

#379

Post by tim333 » Tue, Feb 23, 2021, 7:15 PM UTC

dudus wrote: post #272

I've been following Tether for quite a long time. I have no absolute proof it is a scam but the writing is on the wall. Here are some facts. - The current Market Cap of USDT is 34 Billion Dollars. It was 4B this time last year. Since the value is pegged this means there has been an influx of cash of 30 B into this shady company in the last year alone. Who invested this money? We have no idea since Tether doesn't disc…

>There's no way to transfer USDT into USD

Use Kraken. You can change USDT to USD and withdraw money. I've done both.

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

#380

Post by hntrader » Tue, Feb 23, 2021, 7:16 PM UTC

_jjkk wrote: post #369

hntrader wrote: post #365

Earlier quoted context omitted.

Good explanation. Why do they do step (3)? Aren't they just opening themselves up to massive legal liability?

Some believe this is an intentional Ponzi scheme to print some money for the owners of Tether and Bitfinex, others believe they had good intentions at first, but through bad investment or otherwise got underwater, and started "investing" their USDT-backing dollars to claw back up. Bitfinex originally denied relation to Tether but it's been proven that was a lie. The worry is, at some point there could be a "run" on T…

Another dumb question: If they've been buying assets like BTC using the USD that they were supposedly keeping as reserves, shouldn't they have made massive amounts of profits since 2018, and be in a position to now return the USD reserves so that it's 1:1, while keeping billions in profits for themselves?