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Tether executives said to face criminal probe into bank fraud

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

#71

Post by rvz »

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...

> So in my estimation, it probably is a scam...

It IS a scam and it is backed by nothing. Only to pump the BTC price artificially.

The unveiling of this scam was seen and covered a mile away and was a long time coming.

To Downvoters: I'm sorry BTC maximalists, but this scandal was waiting to be cracked down and no, it is not FUD, or whatever denial spiral you are going through.

Just read: https://twitter.com/smdiehl/status/1393669812220465162

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

#72

Post by [deleted] »

nateberkopec wrote: post #61
gruez wrote: post #42

Earlier quoted context omitted.

If I were running it as a 100% legal/safe operation I'd invest the balance in short term treasuries. If you multiply tether's liabilities ($61.9B) by the current 1 year treasury rate (0.09%), you get $55.7M, which seems like plenty of money to run such an operation.

How much of a chunk of the 1-year treasury market is $61.9B? Can't figure out how to look that up. Seems like it could be a decent business if it was legit.

[deleted]

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

#73

Post by mikeblackson »

Majromax wrote: post #66
mikeblackson wrote: post #59

Earlier quoted context omitted.

>The NYAG showed that Tether was not fully backed. In 2017, when they were busy securing other banking partners due to accounts being shutdown. I consider this a gap due to growing pains, as did the NYAG. How would you shutdown Tether temporarily (2-3 months) if a bank ends a relationship?

> How would you shutdown Tether temporarily (2-3 months) if a bank ends a relationship? By refusing to take deposits for new Tether, and by shutting down redemptions if necessary while the banking relationship is sorted out. Tether doesn't exist ex nihilo; it requires active management to issue and redeem coins. If it ever cannot live up to its "fully backed" claim, then continuing to operate under a pretense is frau…

>By refusing to take deposits for new Tether, and by shutting down redemptions if necessary while the banking relationship is sorted out.

I agree and expect that is the lesson the $18M fine taught them.

The key point is, they had a legitimate reason for under-collateralizing during the biggest bull run in crypto history at that point. 2014-2017 was the perfect period to begin fraudulent activity if they were really interested in it.

I guess the question is, what is the best time to commit fraud in the crypto space, earlier or later (during-post increased regulatory scrutiny)?

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

#74

Post by bostonsre »

deepvibrations wrote: post #43
spookthesunset wrote: post #30

Earlier quoted context omitted.

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.

We don't truly know the severity of it yet, but we do know that money has been moving over to other stablecoins such as USDC over the past year or so and so risk is slowly decreasing. There is a huge amount of innovation in the space and i think to gloss over it as a 'house of cards' is a bit naive - there is no denying it is a volatile market, but it is here to stay, so best to embrace it and see if there are actual…

I'm not sure lots of innovation means it's not a house of cards. We don't know how many fraudulent companies there are in this space. It seems possible that a few pieces of information could lead to a crash and that would definitely mean it's a house of cards if it was the case.

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

#75

Post by spywaregorilla »

spookthesunset wrote: post #31
gammarator wrote: post #28

Earlier quoted context omitted.

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.

Given that you're not allowed to redeem tether for dollars I never quite understood why it mattered.

edit: Note the difference between "trade" for dollars and "redeem" for dollars

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

#76

Post by swang »

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…

it is because binance got transferred a whole bunch of tether and also created a whole bunch of its own stablecoin right before that huge spike last night.

its not irrational, it is just pure fraud.

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

#78

Post by spywaregorilla »

As someone who doesn't really care about the virtues of crypto, but has a small investment in btc that has grown into several thousand dollars, I'm feeling that if I want some casual investment in crypto I should move it into eth to avoid regulatory risk from bitcoin's environmental cost and tether collapsing and destroying bitcoin's value. I'm sure eth would tumble down with btc for a while but feel it might diverge positively after a while if either of these two threats hit btc? It feels like btc just has a lot more guns pointed at it.

Any opinions on this?

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

#79

Post by santamex »

This one explains the Tether scam quite nice: https://youtu.be/-whuXHSL1Pg

Edit: summary: 8 people founding the tether company, 7 of them with a criminal background. Lying and denying and then admitting after they have no other option. Yeah, seems like a nice company…

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

#80

Post by matheusmoreira »

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...

USD is the real scam. It's not backed by anything either. Tether only exists because nobody else wants to touch the USD and its annoying regulations. I find it hard to care about Tether printing billions when the US government prints trillions.

Wish we could have a 100% XMR world without even a single dollar in sight. Won't happen until the end of the petrodollar which won't happen until the end of the US military.

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