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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

#191

Post by arcticbull »

leppr wrote: post #190
arcticbull wrote: post #165

Earlier quoted context omitted.

Can they though? (1) US persons and entities cannot redeem, period, so that leaves out all of Coinbase doesn't it? [edit] originally I mentioned FTX but of course they're based on Antigua and Barbuda and Hong Kong. [1 - Section 3/ and 3/3]. (2) Only individuals Tether deems as customers at their sole discretion are permitted to redeem. [1 - Section 9/ - "Tether in its absolute and sole discretion may determine that y…

> Roughly speaking nobody has tried to redeem any - for obvious reasons. They know they can't. Usually you at least come up with FUD that sounds reasonable to an outsider. Obviously many people (some that I know personally) have "redeemed" USDT for a USD wire via Tether. Tether may be fraudulent but it wouldn't have held up until now without some aspect of credibility. There are many 8 figures+ redemptions going on,…

> Obviously many people (some that I know personally) have "redeemed" USDT for a USD wire from Tether. Tether may be fraudulent but it wouldn't have held up until now without some aspect of credibility. There are many 8 figures+ redemptions going on, sometimes multiple times a day.

I have not seen a single piece of evidence of this, and I have not seen any burns to line up with this. If you'd like to provide some I'll happily retract my statement.

For what it's worth 8 figures is small potatoes, Bitfinex literally grabbed 800M worth of their reserves one time, so we know they have some money in the piggy bank. They have some cash, but way, way, way less than they would require for a semblance of actual legitimacy.

Otherwise, everything I posted is directly from their legal page and whitepaper.

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

#192

Post by jpmattia »

arcticbull wrote: post #189
jpmattia wrote: post #186

Earlier quoted context omitted.

> Did you read the settlement? Yes. It says that tether held securities/receivables denominated in dollars rather than actual dollars, despite Tether's claim that they held dollars. I could not find anywhere that the settlement claimed "no reserves", despite CNBC's quote. [edit: It came out of the AG press release, not the settlement. As near as I can tell the settlement makes no representation that tether is unbacke…

They lost all access to banking meaning that there was no physical way for them to create redeem Tethers. That makes it de facto un-backed. This is addressed in 14/ through 18/. They lost access to banking, and continued to issue Tethers. > 18/ Because Tether did not have a significant bank relationship in its name from at least March 2017 until September 15, 2017, it could not directly process any fiat deposits for…

> That makes it de facto un-backed.

It makes them un-backed by US Dollars in a bank account.

It does not make them un-backed by securities denominated in US dollars, which was my point. It's also likely why she never pursued a fraud case.

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

#193

Post by FireBeyond »

mikeblackson wrote: post #176
jcranmer wrote: post #167

Earlier quoted context omitted.

> Also, there is nothing which proves that Tether actually isn't backed by anything. There is a lot of circumstantial evidence though. To wit: * Tether was previously caught lying, in a manner that is attuned to how many big frauds start (you hit a small road bump, so you lie to cover up the road bump, figuring you'll be able to make up the shortfall before too long. But now your lying projections are going faster th…

>Tether had had the cash, until it was stolen from them, and they started lying to pretend that it wasn't stolen. My understanding is funds in a bank account were seized and the account closed. Describing the shortfall that followed, while they tried to recover said funds, as fraud, is a tremendous mischaracterization. Did somebody at Bloomberg have a BTC short position blowup? They have a long history of publishing…

They also shipped tens of millions of dollars in BTC to another group to "assist" them with movement of funds (I want to say but am willing to be corrected, that the amount was actually ~$80M).

The group ... didn't do that. They kept the BTC and said "sucks to be you".

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

#194

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

#195

Post by mikeblackson »

swang wrote: post #76
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…

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.

>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.

What you are describing is just people moving money to an exchange and buying with leverage, not fraud. Price moves up when large buyers step in with FOMO.

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

#196

Post by arcticbull »

jpmattia wrote: post #192
arcticbull wrote: post #189

Earlier quoted context omitted.

They lost all access to banking meaning that there was no physical way for them to create redeem Tethers. That makes it de facto un-backed. This is addressed in 14/ through 18/. They lost access to banking, and continued to issue Tethers. > 18/ Because Tether did not have a significant bank relationship in its name from at least March 2017 until September 15, 2017, it could not directly process any fiat deposits for…

> That makes it de facto un-backed. It makes them un-backed by US Dollars in a bank account. It does not make them un-backed by securities denominated in US dollars, which was my point. It's also likely why she never pursued a fraud case.

That was a settlement for fraud under the Martin act. Fraud was the charge settled.

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

#197

Post by jcranmer »

mikeblackson wrote: post #176
jcranmer wrote: post #167

Earlier quoted context omitted.

> Also, there is nothing which proves that Tether actually isn't backed by anything. There is a lot of circumstantial evidence though. To wit: * Tether was previously caught lying, in a manner that is attuned to how many big frauds start (you hit a small road bump, so you lie to cover up the road bump, figuring you'll be able to make up the shortfall before too long. But now your lying projections are going faster th…

>Tether had had the cash, until it was stolen from them, and they started lying to pretend that it wasn't stolen. My understanding is funds in a bank account were seized and the account closed. Describing the shortfall that followed, while they tried to recover said funds, as fraud, is a tremendous mischaracterization. Did somebody at Bloomberg have a BTC short position blowup? They have a long history of publishing…

> My understanding is funds in a bank account were seized and the account closed. Describing the shortfall that followed, while they tried to recover said funds, as fraud, is a tremendous mischaracterization.

They covered up pertinent facts that would seriously question their liquidity and/or solvency.

Let me put it like this: suppose you were selling your house to me for $1 million. If I had $1 million in We Are Criminals Shadow Bank, Ltd., and I've been struggling for weeks to get them to give me any of my money back, how would you feel if I told you that I had $1 million in cash without mentioning any of those details? That's exactly what Tether did.

If you still feel that calling that fraud is a mischaracterization, well, I have a bridge to sell you. I mean, I've been having a bit of trouble with the recorder of deeds over it, but that should get straightened out any day now, so it shouldn't matter, don't worry about it.

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

#198

Post by nikanj »

rubyist5eva wrote: post #138

Cryptocurrency pegged to fiat is quite possibly the dumbest possible use of a cryptocurrency I can think of, except for Tether which was an obvious scam from the get go.

It's great for crime though. It's like USD cash, except you can transfer it instantaneously across the globe.

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

#199

Post by renewiltord »

leppr wrote: post #190
arcticbull wrote: post #165

Earlier quoted context omitted.

Can they though? (1) US persons and entities cannot redeem, period, so that leaves out all of Coinbase doesn't it? [edit] originally I mentioned FTX but of course they're based on Antigua and Barbuda and Hong Kong. [1 - Section 3/ and 3/3]. (2) Only individuals Tether deems as customers at their sole discretion are permitted to redeem. [1 - Section 9/ - "Tether in its absolute and sole discretion may determine that y…

> Roughly speaking nobody has tried to redeem any - for obvious reasons. They know they can't. Usually you at least come up with FUD that sounds reasonable to an outsider. Obviously many people (some that I know personally) have "redeemed" USDT for a USD wire via Tether. Tether may be fraudulent but it wouldn't have held up until now without some aspect of credibility. There are many 8 figures+ redemptions going on,…

Won’t we expect to see token burns to match redemption? That should be easy to point to on the blockchain. Such a low cost way to just blow away all FUD.

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

#200

Post by AgentME »

rubyist5eva wrote: post #138

Cryptocurrency pegged to fiat is quite possibly the dumbest possible use of a cryptocurrency I can think of, except for Tether which was an obvious scam from the get go.

A lot of stablecoins sacrifice decentralization, but there are some like DAI that get you all of the (non-volatility-related) benefits of cryptocurrency like direct control without the price volatility. If you want to use cryptocurrency as money, the price volatility is often a big downside.
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