181–190 of 211 posts
Coinbase can be considered the cleanest thing out there. On the other hand their employee Charlie Lee without any trouble did inside trading with the knowledge of CEO.
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> What is actually bad about Tether that doesn't apply to USD and the current largely functional banking system? You answered your own question. There are no 1. regulations 2. regulators 3. capital requirements 4. backing insurance guarantees
Argh I feel like I'm going mad here. What did Tether actually do that people are mad about then? Everyone knew going in that it was basically an unregulated bank! The only thing I've heard is that they used to claim they were 100% backed in cash and maybe weren't but regardless aren't now. Which is super shady and the epitome of "growth hacking" but their current state is fine, right?
> ceejayoz 4 hours ago [–]
> Yup. https://tether.to/legal/
>> Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of securities and other assets held in the Reserves. Tether makes no representations or warranties about whether Tether Tokens that may be traded on the Site may be traded on the Site at any point in the future, if at all.
To me, that disclaimer sounds like they are trying to make a scam legal later when a rug is pulled out from underneath everyone and a trap is sprung like darknet drug bazars that shutdown and take everyone's assets once there was enough money on the platform.
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Do you have references? Edit: Haha.. asking legit question for data because I’m curious gets downvoted. Lol. I should know to avoid the crypto discussions here. Lots of emotion and not much useful information getting shared
Yes, Tether is my source: https://tether.to/wp-content/uploads/2021/05/tether-march-31...
I would say that’s definitely problematic. Still wouldn’t call it a scam. That’d be like calling Lehman Brothers a scam.
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Well it’s supposed to be pegged to the dollar by maintaining USD deposits. Nothing here or that I’ve yet seen indicated that hasn’t been happening. Banks are worse anyway, all banks function on fractional reserve, but we don’t immediately call them scams.
> all banks function on fractional reserve, but we don’t immediately call them scams. US (and many other) Banks have capital requirements, regulations, regulators, and insurance that covers the deposits!
Reserve requirements were lowered to zero percent in 2020 to ease lending during the pandemic:
https://www.federalreserve.gov/monetarypolicy/reservereq.htm
Also a good read on the implications… basically banks can keep loaning out to infinity.. a situation that doesn’t seem a whole lot better than tether in my opinion:
https://www.forbes.com/sites/bobhaber/2020/03/16/the-fed-fir...
And perhaps you have noticed inflation starting to creep up.. this and QE5 very likely a source
https://www.usinflationcalculator.com/inflation/current-infl...
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> Tether might be a scam in the sense that they don't actually have the backing assets they claim > They are absolutely running afoul of banking regulations > the only thing Tether actually needs to do is keep the trading value of their coin near $1. How do you propose Tether do that if they don't have financial backing to create a watermark below which the value won't fall? Increase the scam?
Is anything other than 100% cash backing a scam to you because that seems like a stretch? Oh lawdy did they defraud people by claiming to be 100% cash backed when they weren't but I don't think fractional reserve is a scam in general. At any given moment you just need the ability to pay out the people who come to you and ask which is already teeny tiny (as evident by banks needing less than 5% cash reserves of deposi…
> as evident by banks needing less than 5% cash reserves of deposits
You may not be aware, but when you deposit money into a bank, deposits are insured, so it doesn't matter if they have 1% on hand. You will eventually get your deposit back. That is not even close to what Tether is.
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> Tether might be a scam in the sense that they don't actually have the backing assets they claim Tether is a scam on a whole other level than this
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?
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Yes, Tether is my source: https://tether.to/wp-content/uploads/2021/05/tether-march-31...
And that’s why I asked the question! Thank you, I hadn’t seen that before. I would say that’s definitely problematic. Still wouldn’t call it a scam. That’d be like calling Lehman Brothers a scam.
A scam is pretending something is true when it clearly is not --- for financial gain.
The scam here is the fact that the exchanges cooperate to keep the price of USDT pegged at $1 USD --- even after Tether itself has admitted they do NOT have $1 USD for each USDT minted and they are NOT obligated to redeem 1 USDT for $1 USD.
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> all banks function on fractional reserve, but we don’t immediately call them scams. US (and many other) Banks have capital requirements, regulations, regulators, and insurance that covers the deposits!
Capital requirements mean the bank won’t go bankrupt, ie it can pay its employees etc. But does not deal with deposit reserve. FDIC insurance also covers only $200,000 and that’s insured by the US government. Reserve requirements were lowered to zero percent in 2020 to ease lending during the pandemic: https://www.federalreserve.gov/monetarypolicy/reservereq.htm Also a good read on the implications… basically banks c…
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Totally agree, however I haven't seen any sources saying that these mint operations were paid for by commerical paper given by Alameda or Cumberland. That's what I suspect and I'll be shorting more USDT today on AAVE.
Actually, that got me curious. Couldn't a billionaire crush tether by shorting so much of it that it exceeded the cash reserves?
Short answer --- no. They can just print more tethers --- which exchanges and crypto-fools will readily accept as being worth $1 USD.
You're making a common mistake --- you're assuming that the crypto market is actually a "free market" similar to the regulated stock and currency markets. You're assuming it is free of the inside manipulation that keeps the price of USDT artificially pegged at $1 USD no matter what.
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Is anything other than 100% cash backing a scam to you because that seems like a stretch? Oh lawdy did they defraud people by claiming to be 100% cash backed when they weren't but I don't think fractional reserve is a scam in general. At any given moment you just need the ability to pay out the people who come to you and ask which is already teeny tiny (as evident by banks needing less than 5% cash reserves of deposi…
I think you are looking at this through rose-colored glasses. Not everything you read on the Internet is true, and Tether is likely to not even pay a small fraction of what they have made. It is almost certain they have stolen an incredible amount of money, using a song and a dance, and made people shill for them - because hey tbey have all the bad parts of banks and none of the good parts - so what's the problem? >…