201–210 of 267 posts
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The effect is the same: people want to cash out and they can't. The solution is the same: bail out the banks in order to avoid even worse economic impact. I don't see why banks deserve this royal treatment while Tether doesn't. Whether Tether was or wasn't responsible with the money is another matter entirely. I fully support any efforts to hold them accountable for their actions there.
Banks don't get that special treatment for free. They pay for insurance and comply with regulations. Some of those regulations exist to reduce the risks associated with FDIC insurance, and a lot of those regulations exist to force banks to serve important social functions. You can fault banking regulation for not being stringent enough, and I won't argue with you. But I'll never understand how "fuck banks getting spe…
They're not. Cryptocurrency is not even supposed to have banks in the first place! It was supposed to put an end to all that stuff. People should not be exchanging crypto for fiat, they should be transacting directly in crypto.
Instead the exchanges became banks and people invented USDT because dealing with USD is hell on earth. There was supposed to be no need to ever deal with USD or any other fiat currency. Everything crypto was invented to solve became integral to the crypto market ...
> I don't want to bail out the big banks; why in fuck's sake would I want to bail out Tether speculators?
I don't want that either. I want banks to face the consequences of their risk taking. It's never gonna happen though. They'll keep bailing out the banks. So there's no reason they shouldn't do the same for crypto.
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I haven't looked into it, but it looks like they lied about being backed by cash (or at least, somehow implied it). Now they claim to be backed by cash and cash equivalents, namely a lot of "commercial paper" (short term debt obligations), which is widely believed to be in Chinese markets. For some reason though, they won't reveal exactly what it is they hold. It could be that they think the market will not react kin…
The problem is worse than that. They also use their BTC holdings as part of their assets they hold, which allows them to pump the BTC/USDT rate (print USDT, use it to buy BTC, see prices of BTC going up because of artificial demand, say "BTC is up, our holdings have increased in value and we can print more", rinse and repeat.
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If the price is under $1, the backer can purchase the coins with reserves and pocket the difference. The price will only depart from the peg if selling forces the market price down and the backer doesn't have enough reserves to purchase tokens sold beneath the peg. This scenario is similar to a bank run and would require high selling volume to set if off. The lending rates are determined by a separate mechanism and r…
The rumor is the backer is using the reserves to trade crypto. You won't ever see an attack on Teather during a crypto bull run as the reserves will be strong. In the depths of a crash, the potential is definitely there. Last time Bitfinex bailed out Teather when its reserves came up short. So to really see Teather fail, we probably need a crypto crash and a weakened Bitfinex. This is why people still use Teather. Ev…
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I'm more surprised that anyone still holds Tether, unless they're stuck with it. The company has been caught in lies several times before, it's not as if a $41M fine will turn them honest.
I haven't looked into it, but it looks like they lied about being backed by cash (or at least, somehow implied it). Now they claim to be backed by cash and cash equivalents, namely a lot of "commercial paper" (short term debt obligations), which is widely believed to be in Chinese markets. For some reason though, they won't reveal exactly what it is they hold. It could be that they think the market will not react kin…
Which auditors? The only ones I know of quit before making a statement (which is a very bad sign).
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I'm more surprised that anyone still holds Tether, unless they're stuck with it. The company has been caught in lies several times before, it's not as if a $41M fine will turn them honest.
I haven't looked into it, but it looks like they lied about being backed by cash (or at least, somehow implied it). Now they claim to be backed by cash and cash equivalents, namely a lot of "commercial paper" (short term debt obligations), which is widely believed to be in Chinese markets. For some reason though, they won't reveal exactly what it is they hold. It could be that they think the market will not react kin…
Don’t really get you guys saying Tether should be shut down… the big banks get routinely fined with much bigger fines for much bigger crimes, are we gonna shut them all down then? At least Tether did not steal from nor defraud anyone. Just as a random example: https://www.justice.gov/opa/pr/jpmorgan-chase-co-agrees-pay-...
Yeah. The truth is the entire banking system is running the exact same scam ad Tether. The only difference is the governments think banks are too important to allow the consequences of their actions to catch up with them. So whenever there's a bank run and there's no money in the bank, the government bails them out. They should just bail Tether out too.
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Basic question: why doesn't this affect the currency pair exchange rate? If lending rates reflect the (realistic!) idea that holding 1 USDT is less valuable than holding 1 USD, how does 1 USDT trade at par?
Once the peg is broken it will collapse quickly. That means it's in their interest to keep the peg. If they have enough reserves (hard to imagine they have even 5% in cash but maybe they managed to buy enough BTC with their tokens to keep afloat for a while) they can keep the facade going for a very long time (until some kind of bank run is triggered).
How much crypto is borrowed on platforms like Compound against USDT? That collateral takes a 5% haircut, we’ll see painful liquidations. 10% or 20%? Fire sale everywhere.
I don't understand why this is something they can settle rather than something that gets them completely shut down.
The CFTC doesn't have that authority; a company can only get shut down for a criminal offense and Tether is not accused of any crime. Only the Department of Justice can prosecute or investigate crimes, the CFTC is an independent agency and as such has no authority to do so. All the CFTC can do is levy a fine, so both parties are fairly indifferent as to whether that money comes from a judgement or from a settlement.…
Fraud is a crime.
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Once the peg is broken it will collapse quickly. That means it's in their interest to keep the peg. If they have enough reserves (hard to imagine they have even 5% in cash but maybe they managed to buy enough BTC with their tokens to keep afloat for a while) they can keep the facade going for a very long time (until some kind of bank run is triggered).
The last few years of BTC, ETH, and DeFi all collapse quickly if the USDT peg fails. How much crypto is borrowed on platforms like Compound against USDT? That collateral takes a 5% haircut, we’ll see painful liquidations. 10% or 20%? Fire sale everywhere.
Close to zero. Compound, Aave, Maker - none of them allow folks to use USDT as collateral to borrow against. You can lend it for yield, and borrow it from others, but you can't use it as collateral.
There are some riskier protocol that allow it (rari, cream) but those are much smaller.