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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

#441

Post by vkou »

tim333 wrote: post #394
vkou wrote: post #363

Earlier quoted context omitted.

Go look at that same graph from 2007 to 2021. If you bought in at the top of the 2008 bubble, you'd have tripled your money by now. Unless you're planning on retiring in the next 10 years, buy stocks.

The S&P is unusually pricey at the moment though.

It's only unusually pricey if you expect to always live in a world of 3-4% interest rates. We're no longer living in that world, though.

The thing is, you could say the same thing at nearly any point between 1999 and 2021, and be right, and it would still have been a good idea to invest into the S&P.

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

#442

Post by SkyMarshal »

jonplackett wrote: post #437
vmception wrote: post #428

Earlier quoted context omitted.

Nice this is how Coinbase functions with USDC too Likely they all piggyback off of each other’s implementations in the face of evolving regulatory guidance

Why does USDC and USDT need to exist for this? What’s the benefit of not just having USD in your Coinbase/bitfinex acc if they’re meant to be pegged anyway?

Tax arbitrage, iirc. In some jurisdictions like the US, exiting your position into USD is a taxable event for capital gains taxes. I seem to recall stable coins were invented to avoid that. I can't imagine tax authorities allow that loophole though.

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

#443

Post by vkou »

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…

> Almost all fiat deposits into Bitfinex create USDT.

Which is insane. Those are customer funds, that Bitfinex owes to their customers, if they choose to withdraw from their ecosystem.

They aren't a personal piggybank for them to dip into as they please.

This is not at all like fractional reserve banking, where a financial liability (customer deposts) are used to print dollars (in the form of loans), because customer deposits can be called back anytime, while loans cannot.

With Tether, if Bitfinex takes a dollar a customer deposits, and then prints and sells a USDT, and the customer withdraws their deposit, they have to destroy a USDT, in order to maintain the 1:1 peg. There is zero evidence that they are doing this at anywhere near the rate they claim.

Ironically, what they are doing is very similar to a double-spend.

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

#444

Post by kevingadd »

T0Bi wrote: post #410
mcintyre1994 wrote: post #370

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. So what actually happens when people sell Bitcoin? They get USDT on an exchange and then can never get cash out? Is there some convoluted series of trades you can make from USDT -> ??? -> USD or something instead? And people selling Bitcoin have made enough profit to just ignore the overhead o…

OP got that wrong. It's very simple to exchange USDT for USD, you can do it on Kraken and Binance and withdraw to your bank account. No problem at all

Isn't that trading, you're selling USDT to someone who wants to give you USD for it? That's different from telling the operators of Tether itself "Here's some USDT, give me the USD that backs it".

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

#445

Post by charcircuit »

cbhl wrote: post #27

If I'm reading the settlement correctly, Bitfinex will now have even less USD to back Tethers, since they'll have to wire an $18,500,000 transfer to the State of New York.

Tether is over collateralized. If they paid that $18.5M from their collateral it would still be over collateralized by $145.9M https://wallet.tether.to/transparency

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

#447

Post by tablespoon »

SkyMarshal wrote: post #442
jonplackett wrote: post #437

Earlier quoted context omitted.

Why does USDC and USDT need to exist for this? What’s the benefit of not just having USD in your Coinbase/bitfinex acc if they’re meant to be pegged anyway?

Tax arbitrage, iirc. In some jurisdictions like the US, exiting your position into USD is a taxable event for capital gains taxes. I seem to recall stable coins were invented to avoid that. I can't imagine tax authorities allow that loophole though.

> Tax arbitrage, iirc. In some jurisdictions like the US, exiting your position into USD is a taxable event for capital gains taxes. I seem to recall stable coins were invented to avoid that. I can't imagine tax authorities allow that loophole though.

If they did, it looks like it's closed now. At least in the US, converting between two cryptocurrencies is a taxable event:

> There are plenty of questions about whether or not investors can claim a direct crypto conversion (e.g. bitcoin to ethereum) as "like-kind", avoiding taxes on those transactions. The tax laws changed beginning in 2018, and like-kind exchanges are only applicable to real estate transactions.

https://www.coinbase.com/learn/tips-and-tutorials/crypto-and...

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

#450

Post by RC_ITR »

inter_netuser wrote: post #438
jonplackett wrote: post #437

Earlier quoted context omitted.

Why does USDC and USDT need to exist for this? What’s the benefit of not just having USD in your Coinbase/bitfinex acc if they’re meant to be pegged anyway?

a significant amount of cross-border trade (yes, actual goods transported in meatspace) is conducted in USDT for many years now.

I still am waiting for a source on this, unless the implication is that those meat-space trades are all illegal / ML and therefore not tracked....
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