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Exposing Tether [video]

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Re: Exposing Tether [video]

#81

Post by espadrine »

ethbr0 wrote: post #75
espadrine wrote: post #71

Earlier quoted context omitted.

> It would be valued at the current market price it could be quickly cleared at. To clarify: there are two markets, one is redemption of USDT through the Tether company, the other is independent transaction of USDT vs. payment typically through exchanges. During asset liquidation, Tether’s assets would not be sold for the users’ redemption, but for the company’s creditors and shareholders. As soon as the suspicion of…

Can't we excise non-redemptions from this picture? As redemptions are (ultimately) the only way USDT is converted back to USD (regardless of how many times the USDT was traded, or at what price). That said, at the time of a redemption, isn't Tether legally required to sell or transfer assets to service the redemption (as long as they are able, subject to the timelines and qualifiers promised in their agreements)? Whi…

> While Tether may not be a bank, their users aren't just users: they're holders of Tether credit

Contractually, they are not considered creditors. Furthermore, liability for any loss is explicitly put on the user. (Whether the contract is valid can be litigated though.)

> isn't Tether legally required to sell or transfer assets to service the redemption

Sadly not… From the contract: “Tether makes no representations or warranties about whether Tether Tokens that may be traded on the Site may be traded on the Site at any point in the future, if at all.”

In fact, US citizens are already disallowed from redeeming tokens, and have been for years.

Re: Exposing Tether [video]

#82

Post by raesene9 »

thebean11 wrote: post #80
raesene9 wrote: post #77

Earlier quoted context omitted.

USD Coin has indeed increased in use, although given the supposed liquidity of these two assets, you could wonder why the move doesn't happen far faster than it has... Also there's a very interesting difference between USDC and Tether in terms of volume. based on https://nomics.com/ Tether has a market cap of $62.85B and a 24 hour volume of $70.19B USDC has a market cap of $23.90B and a 24h volume of $1.84B So, for s…

That seems potentially easy to explain given that some of the bigger (higher volume) exchanges support USDT and not USDC.

I know that was the case in the past, but is it still the case? from a 10 minute look, the 4 largest exchanges by volume (Binance, Coinbase, Huobi, and Kraken) all seem to list USDC

Re: Exposing Tether [video]

#83

Post by thebean11 »

raesene9 wrote: post #82
thebean11 wrote: post #80

Earlier quoted context omitted.

That seems potentially easy to explain given that some of the bigger (higher volume) exchanges support USDT and not USDC.

I know that was the case in the past, but is it still the case? from a 10 minute look, the 4 largest exchanges by volume (Binance, Coinbase, Huobi, and Kraken) all seem to list USDC

Hmm yeah maybe not, even Bitfinex trades USDC, and anyway they're a much smaller percentage of volume than I thought (jesus binance is huge).

Wonder if it's just network effect then? Big traders use the USDT markets because they're more liquid -> the USDT markets become even more liquid and the cycle continues.

Re: Exposing Tether [video]

#84

Post by ac29 »

ethbr0 wrote: post #68
qeternity wrote: post #67

Earlier quoted context omitted.

> At worst, they're choosing investments to maximize personal gain. At worst, they don't have any investments.

It's possible, but given a choice between "flagrantly lying to the New York AG who just investigated you" vs "buying cheap debt no one else would touch and then overvaluing it, because you aren't regulated", the latter seems like a less legally perilous way of keeping things going.

The latter would imply they had any cash to buy debt in the first place. One of the most common, and most credible theories is that they issue Tether to exchanges in exchange for short term debt obligations. There's never any actual money changing hands.

Re: Exposing Tether [video]

#85

Post by ac29 »

pclmulqdq wrote: post #11

Stablecoins have ridiculous fraud potential. The idea of a crypto that holds 100% of its value in USD is just an unstable business. There's too much cash just sitting there, and it's too tempting to debase the coin just a little bit. Tether looks like they have been caught with their hand in the cookie jar a few too many times. I might trust a stablecoin backed by a big bank, but nothing else.

Turning a profit on a $60B cashpile should be easy, even with current rock bottom interest rates. Even more so since Tether reserves the right to deny redemptions, or redeem them in-kind for securities (which would allow them to invest in relatively illiquid investments that might have a higher yield).

Problem: there never was $60B to begin with, and to the extent there was/is some real money, Tether has the nearly impossible task of proving its not related to money laundering, proceeds of crime, etc if they want access to regulated financial markets. But, no one with clean, legitimate cash has any reason to do business with Tether (or any other stablecoin for that matter - exchanges would be more than happy to take clean USD if people want to buy cryptocurrency).

Re: Exposing Tether [video]

#86

Post by nly »

ac29 wrote: post #85
pclmulqdq wrote: post #11

Stablecoins have ridiculous fraud potential. The idea of a crypto that holds 100% of its value in USD is just an unstable business. There's too much cash just sitting there, and it's too tempting to debase the coin just a little bit. Tether looks like they have been caught with their hand in the cookie jar a few too many times. I might trust a stablecoin backed by a big bank, but nothing else.

Turning a profit on a $60B cashpile should be easy, even with current rock bottom interest rates. Even more so since Tether reserves the right to deny redemptions, or redeem them in-kind for securities (which would allow them to invest in relatively illiquid investments that might have a higher yield). Problem: there never was $60B to begin with, and to the extent there was/is some real money, Tether has the nearly i…

> Turning a profit on a $60B cashpile should be easy

Yeah, even 3 month US treasuries would yield $24M/year in revenue.

Re: Exposing Tether [video]

#88

Post by ethbr0 »

espadrine wrote: post #81
ethbr0 wrote: post #75

Earlier quoted context omitted.

Can't we excise non-redemptions from this picture? As redemptions are (ultimately) the only way USDT is converted back to USD (regardless of how many times the USDT was traded, or at what price). That said, at the time of a redemption, isn't Tether legally required to sell or transfer assets to service the redemption (as long as they are able, subject to the timelines and qualifiers promised in their agreements)? Whi…

> While Tether may not be a bank, their users aren't just users: they're holders of Tether credit Contractually, they are not considered creditors. Furthermore, liability for any loss is explicitly put on the user. (Whether the contract is valid can be litigated though.) > isn't Tether legally required to sell or transfer assets to service the redemption Sadly not… From the contract: “Tether makes no representations…

The prohibition on US citizens redeeming tokens probably stems from the SEC's declaration that duck typing will be applied to cryptocurrencies trying to avoid classification as securities.

Re: Exposing Tether [video]

#89

Post by tehlike »

qeternity wrote: post #59
tiku wrote: post #20

They do not need to have 100% USD at Tether. Exchanges buy UDST from Tether, that means that there is an exchange. It would be problematic if they would give it for free to the exchanges. The exchanges won't give you free USDT either, they charge something in return. The only way this could be a problem if they would use USDT from within Tether to buy crypto. I have not seen any evidence of this.

> They do not need to have 100% USD at Tether. Exchanges buy UDST from Tether, that means that there is an exchange. How are these two things related at all? If an exchange buys Tether with USD, then they will have 1:1 USD backing.

Crypto. Exchanges can buy tether with crypto.

Or... Tether can print and buy crypto, these two scenarios are exactly the same.

Re: Exposing Tether [video]

#90

Post by xref »

jonplackett wrote: post #26
freeAgent wrote: post #19

Earlier quoted context omitted.

People who assume that are in for a rude awakening. The IRS has aggressively been going after records from cryptocurrency exchanges. Now maybe they’re using a DEX or something, but at some point they’re going to have to spend the crypto natively (much of which is now KYCed) or convert to real USD. People who think they’re being clever are trapped.

Do you mean even if people are just converting into USDT the IRS are going to be after them? FYI I'm just going on what I know friends are doing - no skin in the game! Just see this happening and don't see any other reason why anyone would buy Tether.

Yes, any exchange of coins is a taxable event. Going BTC->USDT is the same to the IRS as going TSLA->AAPL. It’s a sell and a buy on the books.
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