Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tether minted most USDT to just 2 firms – Alameda and Cumberland

protos.com

Post reply on HN
Print view View original

121–130 of 211 posts

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#121

Post by Consultant32452 »

svachalek wrote: post #108
Spivak wrote: post #64

Earlier quoted context omitted.

But like how? I get why the SEC might have words for Tether the company but I don't get how users of tether have been scammed. You buy coin at around $1 and sell at around $1. Like from an end-user perspective as long as the thing actually functions as a stablecoin for some time interval you care about what else is there?

You can sell around $1 as long as people believe it's worth $1, which it's not, so there's no guarantee they will continue to believe it forever. It's supposed to have enough backing to actually represent a $1 which would mean that faith wouldn't be part of the equation, but that's not the actual situation.

If you read this out of context it looks like you're bashing the dollar.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#122

Post by X6S1x6Okd1st »

jqpabc123 wrote: post #80
gruez wrote: post #62

Earlier quoted context omitted.

How is minting to a few companies proof of fraud?

These minting were done as loans --- on an IOU basis. An IOU is a promise to pay --- not the same as being paid in hard currency.

Where does it say that?

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#123

Post by uncletammy »

Bombthecat wrote: post #99
rubyist5eva wrote: post #13

If it wasn't obvious from the get go that Tether was a scam, what more do you need.

I call it again and again and again :tether is the fed of crypto

It's worse. At least the Fed is checked to some degree by Congress.

Tether is outside of the control of any goverment. It's just another faceless shell company.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#124

Post by trutannus »

tablespoon wrote: post #120
trutannus wrote: post #50

Earlier quoted context omitted.

> others have found ways to build and keep an understanding of the crypto ecosystem without fully going down the rabbit hole You're right on the mark. Most of the content around crypto is heavily biased and just looks untrustworthy for a number of reasons. From what I can tell, it's because they're actually unreliable sources. Not because they're trying to scam you, but because there's more money in selling you crypt…

A lot of it also has a strong "Power of Positive Thinking"-vibe. Basically people believing that if only they act and talk like something is true hard enough, it will become true (e.g. nonsense talk about NFTs representing ownership of anything besides the NFT itself). So you have the extra task of trying to distinguish between what is actually true and what some community wants to be true, when almost the only peopl…

> A lot of it also has a strong "Power of Positive Thinking"-vibe

You know what, I could never put my finger on what exactly it was other than the amature feel of some of the content. But you're correct here, there's a lot of magical thinking that goes along with the crypto world. Lots of random sounding predictions about how crypto will evolve that are clearly not grounded in any deep understanding of technology.

I wonder how much of it is magical or wishful thinking in the classical sense, versus people who lack knowledge in general making claims about things that they don't really understand, which come off as bizarre. I've noticed actual technical knowledge is inversely predictive of interest in crypto.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#125

Post by dalbasal »

>> Over $60 billion worth of USDT now circulates through the crypto ecosystem... Tether has historically never faced a large amount of redemptions. Issuances have outpaced redemptions by more than 20:1.

Does that mean that $60bn in net Tether has been sold by the "mint?"

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#126

Post by PragmaticPulp »

vmception wrote: post #109
gringoDan wrote: post #72

I'm no Tether apologist, but this doesn't seem like an issue to me? Alameda and Cumberland are the 2 biggest liquidity providers in crypto trading. Tether is the source of liquidity for many of the exchanges that they trade on. So of course they'd use Tether to on-ramp into the crypto ecosystem and trade. I suppose the real news here is that Alameda and Cumberland haven't redeemed much Tether (proportionally), so if…

hmm no OTC traders here? When you call the OTC desk and wire them dollars they mint stablecoins using their account with - presumably - Bitfinex. Bitfinex issues Tethers no different than Coinbase/Circle issues USDC in a just in time transaction. You either receive the Tether you asked for to make your own trades, or they keep the Tether and purchase the crypto you really wanted. In either scenario, someone besides t…

> You either receive the Tether you asked for to make your own trades, or they keep the Tether and purchase the crypto you really wanted. In either scenario, someone besides the OTC has the Tether now.

So instead of buying coins directly, people are buying Tether then immediately selling that Tether to… someone? Who apparently is okay holding on to huge quantities of Tether?

It’s weird that crypto proponents always act perplexed at why anyone would hold large amounts of fiat losing out to inflation, but when that fiat comes in the form of a cryptocurrency representation it’s actually okay and perfectly logical for huge amounts of it to exist in the crypto system, sitting in a few very large accounts somewhere.

Comparing Tether to USDC is also conveniently ignoring the fact that Bitfinex and Tether tried to mislead everyone into thinking they were unrelated companies, when in fact they were tightly coupled this whole time.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#128

Post by PragmaticPulp »

JofArnold wrote: post #53
ctur wrote: post #29

I often find the headlines, and even stories about, crypto to be inscrutable to those looking in from the outside. The stories also seem to come from an ecosystem of sites I don't recognize so it's hard to even judge if it's reputable site (or at least guess at the biases it might have). None of this is inherently bad, but there seems to be a growing divide between "mainstream" tech and the crypto world that is harde…

I've recently started listening to a lot of podcast episodes on the subject (primarily Unchained and a16z) which has been great for raising my general awareness of what's going on. I'm very skeptical of 90% of what I hear and I've limited interest getting involved in the industry right now but crypto is hugely impactful no matter how you look at it so it's worth keeping a decent amount of curiosity in my opinion. ---…

> I've recently started listening to a lot of podcast episodes on the subject (primarily Unchained and a16z)

It’s an okay podcast if (and only if) you recognize that a16z is in the business of “investing” early into new coins, using their brand to hype those coins, then selling them off when they can get the market excited about the coin.

The technical content of the podcast might be reasonable, but you can’t separate it from their very large conflict of interests.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#129

Post by vmception »

PragmaticPulp wrote: post #126
vmception wrote: post #109

Earlier quoted context omitted.

hmm no OTC traders here? When you call the OTC desk and wire them dollars they mint stablecoins using their account with - presumably - Bitfinex. Bitfinex issues Tethers no different than Coinbase/Circle issues USDC in a just in time transaction. You either receive the Tether you asked for to make your own trades, or they keep the Tether and purchase the crypto you really wanted. In either scenario, someone besides t…

> You either receive the Tether you asked for to make your own trades, or they keep the Tether and purchase the crypto you really wanted. In either scenario, someone besides the OTC has the Tether now. So instead of buying coins directly, people are buying Tether then immediately selling that Tether to… someone? Who apparently is okay holding on to huge quantities of Tether? It’s weird that crypto proponents always a…

Any major stablecoin is good for buying cryptos within the crypto ecosystem which have no fiat markets. Tether happens to be the one with the most liquidity and broad acceptance. As others mentioned, they are a stable value interface into the crypto native ecosystem. Nobody in our conversation is advocating for fiat in cryptocurrency representation, I’m telling you the answer, our feelings about Tether doesnt change the accuracy of the answer.

Liquidity providers are the ones okay holding large amounts of tether. Just look at the liquidity pools, they all earn commissions from other people routing trades through those pools onchain, and many of them yield farm too. The risk is tolerable for them, Tether has had much greater crisis of confidence in the past and didn't implode, trading at worse 15% away from $1 for prolongued periods of time so if those werent going to make holders lose all their money than (compared to the 99% drops in most crypto assets) then people have more confidence amongst the universe of pricing confidence. That's where we are.

Like I said, and what you walked directly into anyway: Bitfinex and Tether’s poor management and governance and opaqueness are issues, randomly picking any Tether headline as validation of those issues are a distraction, as it clouds everyone’s ability to focus on real issues with Tether.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#130

Post by jqpabc123 »

X6S1x6Okd1st wrote: post #122
jqpabc123 wrote: post #80

Earlier quoted context omitted.

These minting were done as loans --- on an IOU basis. An IOU is a promise to pay --- not the same as being paid in hard currency.

Where does it say that?

The audits/attestations reveal this and Tether itself has confirmed it holds a large quantity of "commercial paper". They have steadily backed away from the claim that USDT is backed by dollars.

"Commercial paper" is a loan, an IOU --- not hard currency/assets.

You can't have your dollars and loan them to others too. If I give Donald Trump an unsecured loan for $1000, I can't "legally" claim to still hold the $1000 in cash.

The idea that an unsecured IOU is without risk and is worth just as much as dollars in hand is pure fantasy. Yet all the exchanges collectively peg USDT at $1.

https://www.wsj.com/articles/tether-says-massive-reserves-he...

Post reply on HN