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Tether Fined $41M for Lying About Reserves

bloomberg.com

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Re: Tether Fined $41M for Lying About Reserves

#141

Post by itsoktocry »

bko wrote: post #88
pfisherman wrote: post #13

Earlier quoted context omitted.

fiat debasing the currency. What I find ironic is that the crypto ecosystem still ended up with something like central banks, only in this case their mandate is make money for its owners, and they have no accountability or obligation to serve the general public.

The difference is I can choose not to hold Tether. Removing my exposure to dollars as a US citizen is a lot harder. Not to mention people that are on a fixed income like my parents. So debasing fiat is a lot worse

>The difference is I can choose not to hold Tether. Removing my exposure to dollars as a US citizen is a lot harder.

Did you miss the part about them lying?

"I have a right to choose to buy something" for whom the value is deceptively obfuscated is quite the argument.

Re: Tether Fined $41M for Lying About Reserves

#142

Post by mwint »

clusterfish wrote: post #134
AnthonyMouse wrote: post #119

Earlier quoted context omitted.

> I don't think crypto gets to claim the benefits of the oft touted protection against centralized bullies or scams. The big problem here is that the core benefit of cryptocurrency is in removing the bank as a middle man. But the bank is the chokepoint where governments impose constraints. When you're up against an authoritarian government imposing unreasonable constraints, that's what you need. But it works the same…

You can't uninvent Bitcoin but you can certainly make it illegal, making it all but useless for drug trade or money laundering. Nobody needs a currency that you can't exchange for, you know, real currency that you can buy real things with. So although the government doesn't have the power to eliminate Bitcoin, they do have the power to make it useless. I don't think they will though, because guess who is using it for…

If you can’t trade BTC for USD, you’ll trade it for Yen, and then trade for USD.

Some country will want to cash in on the demand for their currency, and will leave it legal to exchange.

Re: Tether Fined $41M for Lying About Reserves

#144

Post by SandB0x »

SilasX wrote: post #67
SandB0x wrote: post #28

Earlier quoted context omitted.

This is simply insolvency, not fractional reserve.

I think that would be illiquidity -- having only assets that need to be converted, rather than dollars themselves -- rather than insolvency, right?

Well that too

Re: Tether Fined $41M for Lying About Reserves

#146

Post by majormajor »

dragonwriter wrote: post #80
pfisherman wrote: post #13

Earlier quoted context omitted.

fiat debasing the currency. What I find ironic is that the crypto ecosystem still ended up with something like central banks, only in this case their mandate is make money for its owners, and they have no accountability or obligation to serve the general public.

> What I find ironic is that the crypto ecosystem still ended up with something like central banks, only in this case their mandate is make money for its owners, and they have no accountability or obligation to serve the general public So, like private currency-printing banks before government monopolies (and like private banks, which subject to central regulation still create money though they don't print currency),…

> So, like private currency-printing banks before government monopolies (and like private banks, which subject to central regulation still create money though they don't print currency), not like central banks.

Yes, nothing prevents a crypto bank from "creating money" (aka lending) in the same way that a fiat bank does. Loan out your deposits. It's that easy.

Not having it blow up on you in a run-on-the-bank scenario is the harder part than "creating the money". ;)

Re: Tether Fined $41M for Lying About Reserves

#147

Post by orthecreedence »

35fbe7d3d5b9 wrote: post #100
35fbe7d3d5b9 wrote: post #85

Earlier quoted context omitted.

There is an entire branch of the Department of Treasury designed to enforce stiff sanctions and financial penalties against people, companies, and even countries that defy US regulations. If the federal government decides Tether needs shut down, it won't be a struggle.

Since I didn't really talk through this before, a bit of an effort post. OFAC sanctioned Suex, a crypto exchange based in the Czech Republic, less than a month ago[1]. As far as I can tell it is gone from the face of the earth. Here's why: > As a result of today’s designation, all property and interests in property of the designated target that are subject to U.S. jurisdiction are blocked, and U.S. persons are genera…

This is really interesting. I've long thought of as the US' empire being a primarily financial one (as opposed to military, like many other past empires) and I didn't even realize OFAC existed until reading your comment, much less the types of activities they engage in. This certainly cements my suspicions even more about the financial empire of the US and how they exercise that power.

Thanks for the post.

Re: Tether Fined $41M for Lying About Reserves

#148

Post by [deleted] »

frankbreetz wrote: post #108
bko wrote: post #88

Earlier quoted context omitted.

The difference is I can choose not to hold Tether. Removing my exposure to dollars as a US citizen is a lot harder. Not to mention people that are on a fixed income like my parents. So debasing fiat is a lot worse

I believe a tether collapse would have a significant effect on the entire cryptocurrency ecosystem

[deleted]

Re: Tether Fined $41M for Lying About Reserves

#149

Post by orthecreedence »

_3u10 wrote: post #78
tdeck wrote: post #39

Earlier quoted context omitted.

Because the "misleading statement" (i.e. deliberate lie) is the entire basis of Tether's business. The service they claim to provide is fiat backing for their cryptocurrency and they didn't do that. That's not "a few inaccuracies", it's fraud.

Isn’t the basis of the business that tethers are exchangeable for USD? Have they failed to provide USD when asked?

Wait, has anybody ever in the entire existence of Tether actually withdrawn their USDT for USD??

Re: Tether Fined $41M for Lying About Reserves

#150

Post by orthecreedence »

pkulak wrote: post #145
missedthecue wrote: post #2

Hear that? That's the sound of 41 million new tether coins entering the market

Jokes aside, Tether can't both determine how many coins are in the market and the price of those coins.

No, but apparently they can tell people "this is worth $1" and people will believe them, even if there's nothing backing it. On a long enough timeline what you say might be true, but in the short term it seems that most people haven't gotten the memo.
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