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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

#101

Post by jpmattia »

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.

> Or more likely tether isn’t backed by anything at all.

In order to believe this, you have to believe that Leticia James got the data from the NYAG subpoenas, and then ignored the fact that Tether has no backing.

So no, not "more likely".

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

#102

Post by ketzo »

matheusmoreira wrote: post #100
rchaud wrote: post #91

Earlier quoted context omitted.

It is, though. It's backed by the economic output of the United States, which is transacted in USD. But why are you conflating USD with crypto anyway? USD is a currency that is actually used for purchasing goods and services. Crypto isn't used for anything except speculation. If capital gains is the goal, then yes, the USD won't be of much value to you as it's not particularly volatile.

https://www.treasury.gov/resource-center/faqs/Currency/Pages... > Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything Bigger scam than Tether. Has been running for almost a century now. > Crypto isn't used for anything except speculation. Looks like Amazon's going to accept cryptocurrency as payment: https://www.businessinsider.com/amazon-cryptocurrency-…

And yet if I walk into a grocery store, I can buy milk with USD. Weird — it’s almost like there is something backing it, and it’s not just strictly gold/silver!

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

#103

Post by jpmattia »

Quick summary: The investigation relates to whether Tether misrepresented transactions for crypto in 2014. The statute of limitations for fraud is 5 years, but because it involves a financial org the SoL is 10 years.

Note that the lawsuit has nothing to do with Tether backing (despite the majority of HN comments as of this writing). As I've said elsewhere: In order to believe that Tether lacks backing, you have to believe that AG Leticia James got the data from the NYAG subpoenas, and then ignored the fact that Tether has insufficient backing. Not likely.

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

#104

Post by cycrutchfield »

jpmattia wrote: post #103

Quick summary: The investigation relates to whether Tether misrepresented transactions for crypto in 2014. The statute of limitations for fraud is 5 years, but because it involves a financial org the SoL is 10 years. Note that the lawsuit has nothing to do with Tether backing (despite the majority of HN comments as of this writing). As I've said elsewhere: In order to believe that Tether lacks backing, you have to be…

"Tether's claims that its virtual currency was fully backed by U.S. dollars at all times was a lie." -- NYAG Letitia James

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

#105

Post by duxup »

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…

I wonder if this is a situation where there is reason to be concerned about this given event, but it's also an easy path for an investigation to proceed / check if it has happened even further?

Pull this stunt once, maybe twice, more?

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

#106

Post by Aperocky »

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...

LOL Evergrande is a ticking time bomb. Assets frozen by a Chinese bank just a week ago, and before that they were peddling CP in the range of 12% annual... It's about to explode.

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

#107

Post by counternotions »

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.

Most serious crypto traders purport that the risks of Tether are already “priced in”: https://twitter.com/raoulgmi/status/1408921296281407488?s=21

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

#108

Post by josh2600 »

I have thought tether was a scam for years. I am very deep in the industry. I now think tether is neither a scam nor a Ponzi scheme in the classic sense of the word (they’re not borrowing from Peter to pay Paul).

What tether is doing is reframing what 1:1 collateralization means. Typically when we think of a fully collateralized stablecoin, we think a 1:1 mapping of dollars to synthetics. Tether is backed by ‘dollars or other dollar equivalent assets’.

Whether ‘other dollar equivalent assets’ will actually add up to dollars in the event of a crash is an exercise for the reader.

As for these current charges, they definitely did not have the dollars they said they did once upon a time. They definitely have a ton of money now but whether that’s the right ton of money in the event the market moves a lot is anyone’s guess.

For now, the seemingly unstoppable rampage that is tether continues on…

Edit: just to be clear I don’t hold tether and don’t make use of the currency personally but I understand why others do.

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

#109

Post by tannhauser23 »

jonahbenton wrote: post #26
jstx1 wrote: post #4

> In February, Bitfinex and several Tether affiliates agreed to pay $18.5 million to settle claims from New York Attorney General Letitia James that the firms hid losses and lied that each token was supported by one U.S. dollar. Can anyone explain this because I'm not familiar with the legal framework here - they paid to settle with NYAG? So you pay and then having potentially broken a law isn't a problem anymore? Ho…

The reason this happens is that the bar for proving criminal intent on the part of a corporation- which would lead to jail for executives and could lead to dissolution of the corp- is very very high. Getting the evidence related to "mindset" and linking it to action and doing so in a way that sufficiently resists various defense strategies is almost impossible, and extremely expensive and time consuming to litigate.…

Want to offer a clarification to what you said here.

Government doesn't have to prove that the corporation acted with criminal intent - that's impossible since corporations don't have minds.

To hold a corporation criminally liable, government must prove that an employee/agent of the company violated the law while acting within the scope of the employment.

So, if you can prove that a Tether executive committed bank fraud, it's rather trivial to hold Tether the corporation responsible as well.

The difficulty is proving that the individual acted with criminal intent. This is indeed a laborious, expensive process that involves trawling through millions of documents and IM messages. The targets of the investigation will often be able to afford the best defense lawyers. Which is why government will often settle a case rather than take it to trial.

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

#110

Post by matheusmoreira »

ketzo wrote: post #102
matheusmoreira wrote: post #100

Earlier quoted context omitted.

https://www.treasury.gov/resource-center/faqs/Currency/Pages... > Federal Reserve notes are not redeemable in gold, silver or any other commodity, and receive no backing by anything Bigger scam than Tether. Has been running for almost a century now. > Crypto isn't used for anything except speculation. Looks like Amazon's going to accept cryptocurrency as payment: https://www.businessinsider.com/amazon-cryptocurrency-…

And yet if I walk into a grocery store, I can buy milk with USD. Weird — it’s almost like there is something backing it, and it’s not just strictly gold/silver!

People can buy cryptocurrencies with USDT as well. They can even cash out dollars later. Weird, right? It's almost like there's something backing USDT as well even though it's all nonsense.

Another truth is governments force their citizens to use their own currencies. They require citizens to pay taxes in those currencies. They probably even require stores to accept those currencies.

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