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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

#151

Post by selectodude »

nostrademons wrote: post #126
ketzo wrote: post #102

Earlier quoted context omitted.

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!

So does that mean that if Amazon [1], Paypal [2], Square [2], and Visa [3] start accepting Bitcoin, it's now backed by the U.S. economy? [1] https://gizmodo.com/amazon-to-accept-bitcoin-by-end-of-2021-... [2] https://www.barrons.com/articles/bitcoin-goes-mainstream-as-... [3] https://www.cnbc.com/2021/07/07/visa-says-crypto-linked-card...

Once I can pay my taxes in Bitcoin will be the day that it's backed by the US Economy.

I've helped friends move in exchange for beer and pizza but nobody would call that a transaction "backed by the US Economy".

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

#152

Post by [deleted] »

tannhauser23 wrote: post #109
jonahbenton wrote: post #26

Earlier quoted context omitted.

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 fr…

[deleted]

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

#153

Post by JumpCrisscross »

jpmattia wrote: post #112
cycrutchfield wrote: post #104

Earlier quoted context omitted.

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

... which is consistent with having sufficient backing. Again: She did not open a criminal prosecution for fraud. Do you think she would just let go of a criminal prosecution?

> Do you think she would just let go of a criminal prosecution?

Yes? Those are my tax dollars at work. There are better places to prosecute. Let the Feds do the international heavy lifting such a prosecution will require.

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

#154

Post by eingaeKaiy8ujie »

wjohnsto wrote: post #134
deepvibrations wrote: post #45

Earlier quoted context omitted.

It certainly would, as currently USDT is used as collateral throughout the system, but I don't think Tether would just 'go down'. Regulators aren't stupid and the worst case imo is that there is a time period where people are told to redeem tether to USD or other stablecoins such as USDC/DAI. The space has been through worse things and always recovered, I do hope Tether is properly investigated so that we can have co…

DAI is backed by USDC, and USDC is a competing stablecoin. Why would a competing stablecoin want to use their own reserves to redeem USDT for you? I don't mean to be antagonistic here, but there is no safe and steady off ramp for holders of USDT if it is found to be a scam. The value of USDT will collapse, and anyone holding it will have to take a 100% loss. The only way to remedy that would be in the form of some so…

DAI is not backed by USDT.

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

#155

Post by JumpCrisscross »

ceejayoz wrote: post #118
josh2600 wrote: post #108

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…

> What tether is doing is reframing what 1:1 collateralization means. Which is, to be clear, fraudulent. Their website long claimed that for every 1 USDT, that they held $1 in USD. This claim fell apart years ago, as did their claim to regular audits (they still never completed one). It may indeed be that they are collateralized now , but they got there via fraud.

> It may indeed be that they are collateralized now, but they got there via fraud

They claim to be collateralized with commercial paper which, without further information, is worthless. They could print a billion Tethers, sell them to a buddy for an IOU, and be "collateralized" by that definition.

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

#156

Post by eingaeKaiy8ujie »

h2odragon wrote: post #50
jellicle wrote: post #40

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 eno…

Recall E-gold? Them folks were at least honestly nuts... I think they're all out of jail now.

There is also XAUT (Tether Gold) by the way.

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

#157

Post by [deleted] »

nostrademons wrote: post #132
phpnode wrote: post #24

Earlier quoted context omitted.

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…

BTC shot up (by about 250%) the last time Tether was nearly shut down as well, as the NY AG was investigating them from Apr - Jun 2019. It makes sense when you consider that the population holding cryptocurrencies generally considers the USD worthless (you see that in some of the other posts here). USD are not an option. If Tether goes under, the next most stable reserve currency of the crypto economy is Bitcoin, so…

[deleted]

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

#158

Post by Marazan »

mikeblackson wrote: post #73
Majromax wrote: post #66

Earlier quoted context omitted.

> 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 i…

They siphoned money from Tether to fund Bitfinex.

This was while they did have a banking relationship. What was the exscuse then?

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

#159

Post by yawaworht1978 »

Aren't many executives Italian? So, whatever the US justice department does, as long they stay in Italy, they will not see jail time, or am I wrong?

The company sure can be shut down and blacklisted globally, as well as the current executives.

It looks like a shift to USDC is happening, why is that not stopped? It looks like a tether fork with different board, but backing etc look all the same.

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