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Tether executives said to face criminal probe into bank fraud

bloomberg.com

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Re: Tether executives said to face criminal probe into bank fraud

#31

Post by spookthesunset »

gammarator wrote: post #28
graeme wrote: post #2

> But the Justice Department investigation is focused on conduct that occurred years ago, when Tether was in its more nascent stages. Specifically, federal prosecutors are scrutinizing whether Tether concealed from banks that transactions were linked to crypto, said three people with direct knowledge of the matter who asked not to be named because the probe is confidential. Notably this is for events some time ago. I…

This thread speculates that Tether’s commercial paper may be in Chinese real estate, which is currently suffering huge losses… https://twitter.com/TheLastBearSta1/status/14183024655571107...

Or more likely tether isn’t backed by anything at all. The auditor they hired quit before completing their audit. Seems legit to me.

These dudes are a complete scam but as long as BTC goes to the moon nobody seems to care.

Re: Tether executives said to face criminal probe into bank fraud

#32

Post by dsyrk »

fergie wrote: post #12

Some smart crypto people are saying that if Tether goes down it will take a whole load of other crypto down with it.

I’d not be surprised at an opposite effect because what will Tether holders “run to” in case of a bank run? With every crisis people will gain trust in Bitcoin not the reverse. Tether holders will bid up Bitcoin as it is something they can custody themselves.

Re: Tether executives said to face criminal probe into bank fraud

#34

Post by Semaphor »

spookthesunset wrote: post #30
pwned1 wrote: post #10

An interesting primer on Tether, and whether it is a scam: https://www.zerohedge.com/crypto/what-effect-would-tether-be... (Yes, I know it's zerohedge, but this is a decent article) Tether usually has 2-3x the volume of bitcoin in any given day. And no one seems to know anything about how it works. So in my estimation, it probably is a scam...

And yet people are so bought into crypto hype they look the other way. These dudes have been running this scam in plain sight for years now. It always amazes me that the whole house of cards continues to stand and hasn’t completely blown up.

Probably because most people don’t care much? Tether always seemed like a thing for day-traders and whales.

Re: Tether executives said to face criminal probe into bank fraud

#36

Post by runbathtime »

jasonlaramburu wrote: post #14

Edit: Isn't it a huge red flag that Tether doesn't make any money off transaction fees? Their daily volume is almost 2x that of BTC. They could fully support the company with a tiny transaction fee and avoid all the regulatory uncertainty/FUD. How does tether make money (aside from potential fraud)? Is there a transaction fee that supports the people and cost of running tether (the company)?

All of those reserves are technically theirs, they do not belong to token holders.

Re: Tether executives said to face criminal probe into bank fraud

#38

Post by mikeblackson »

onepointsixC wrote: post #27
mikeblackson wrote: post #13

Earlier quoted context omitted.

Some people being ignorant about how it works makes it (probably) a scam? That ZH article's ifs, possiblies, and maybes are doing a lot of heavy lifting. Is the Bitcoin price up? Queue the Tether FUD.

Unlike Bitcoin, Eth, and other coins, Tether was always claimed to be backed by something which ensured it's stable value. Tether the company claims that their tether coins are each worth $1. There are now >$60Bn worth of Tether coin issued. With that much money they'd be a very serious private financial institution, and yet they only have 13 employee's. They have never been audited by any independent third party. Th…

>There is nothing which proves that Tether actually is backed by anything

Also, there is nothing which proves that Tether actually isn't backed by anything.

I see a lot of people jumping to conclusions about a topic they are self admittedly ignorant about. Perhaps wait for the DOJ to do their jobs if you don't have insider knowledge.

In response to -dsr's sarcasm below (rate limit), I've got a bit of my own.

"I've run a profitable business for years and haven't committed fraud during the time I spent in an unregulated environment. Now that regulators are nearing my doorstep, it's the perfect time to start committing fraud." /s

Re: Tether executives said to face criminal probe into bank fraud

#39

Post by overtonwhy »

phpnode wrote: post #24
fergie wrote: post #12

Some smart crypto people are saying that if Tether goes down it will take a whole load of other crypto down with it.

Any rational person can see that Tether poses an existential risk to the crypto economy - but the market is highly irrational. There was an interview with tether's CTO and GC the other day that was an absolute car crash[0] and should be sounding deafening warning bells for anyone invested in crypto, but instead we see the BTC price shoot up by 15% in the days since it aired. It is utter madness. [0] https://www.youtu…

In the ending days of Mt Gox's meltdown, prices went up up up for quite a few digital assets, until they didn't.

Basically the shady exchanges are insolvent and they stop cashing out real money, so peoples' only chance to cash out is to buy crypto and transfer it out, driving up crypto pricing on the insolvent exchanges, that greedy people try to arbitrage.

Re: Tether executives said to face criminal probe into bank fraud

#40

Post by jellicle »

What Tether is doing is replaying the banking scams from the 1800s. A bank would open up, issue an unlimited amount of its paper currency, collect deposits in other, valuable currency, and operate for a while. Eventually it would collapse and the owners would walk away rich, having fleeced the public of a great deal of their money.

https://en.wikipedia.org/wiki/Wildcat_banking

US banking regulation is nearly weak enough to permit this for regular banking, but not quite. However, US banking regulation is weak enough to permit it as long as you call it "cryptocurrency" instead of "private currency".

> "Commissioner Alpheus Felch recalled that one bank's "cash reserves" consisted of boxes of nails and glass topped with silver coins."

Pithy! A box that's heavy, makes good clinking noises when you shake it, and has only the tiniest bit of money in it. And so apropos for Tether. I wonder if we'll get some similarly pithy remarks about the modern wildcat banks.

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