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Tether Fined $41M for Lying About Reserves

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Re: Tether Fined $41M for Lying About Reserves

#261

Post by pkulak »

orthecreedence wrote: post #150
pkulak wrote: post #145

Earlier quoted context omitted.

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.

It's worth one dollar because, at least until now, Tether has sold as many as people will buy for 1 dollar, and bought as many as people will sell for 1 dollar. I get that everyone hates Tether, and I'm not a huge fan myself, but that doesn't mean that high school econ gets thrown out because you're emotional.

Re: Tether Fined $41M for Lying About Reserves

#262

Post by bagels »

vkou wrote: post #227
bagels wrote: post #224

Is it possible to short tether effectively to profit when the whole scam collapses?

Sure, if you'd like to collect your winnings in bottle caps and IOUs. And if the exchange you are shorting it on doesn't wipe your position out through a margin call, in one of those strange moments where due to a mysterious glitch, tether breaks the USD peg for a few seconds. If you're looking for easier money, I'd recommend card-counting at a speak-easy ran by the mob, before I'd recommend getting into this busines…

Yes, this is why I said effectively. That does not sound very effective.

Re: Tether Fined $41M for Lying About Reserves

#263

Post by gws »

fouric wrote: post #260
notyourwork wrote: post #216

Earlier quoted context omitted.

> But in practice there was not and nobody suffered any damage, zero, nada, nicht. So I guess its ok. Might as well pack it up and let them carry on with manipulation, lying and profiting. I don't get your rationale whatsoever.

I don't see where the GP poster wrote anything like "I guess its ok. Might as well pack it up and let them carry on with manipulation, lying and profiting." - could you quote the relevant passage? Did they edit their comment?

I did not edit :)

Re: Tether Fined $41M for Lying About Reserves

#264

Post by Retric »

AnthonyMouse wrote: post #258
Retric wrote: post #188

Earlier quoted context omitted.

Do you expect the guy laundering money to accept bitcoins without charging extra? Because if the guy selling bitcoins takes ~10% from the AK-47 buyer and the guy laundering money also takes his ~10% cut for using bitcoins on top of his X% cut for laundering money, suddenly it’s starting to look really unappealing. The real appeal of bitcoin for illegal purposes is it’s effectively a poor but really cheap way to laund…

> Do you expect the guy laundering money to accept bitcoins without charging extra? That's the entire purpose of using them. Someone who has a million dollars in physical cash either needs to get someone local to launder it, which might be hard to find or require paying them a thick margin, or they have to find a way to ship a huge amount of physical cash to the place it's being laundered and risk it being seized at…

Money laundering can’t just be done in an arbitrary location. You need to transfer money back into your country’s banking system while looking legitimate to safely spend it.

Put another way, banks are already operating on digital money that’s the problem.

Re: Tether Fined $41M for Lying About Reserves

#265

Post by norswap »

tehlike wrote: post #199
norswap wrote: post #193

Earlier quoted context omitted.

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…

No auditor audited tether. Tether got few attestations from an unknown company a few times, but they have also been caught red handed by NYAG for moving funds a day before attestation snapshot is taken, and moved it the day after. For the uninitiated, attestation verifies a single point in time, so it's easy to game it. And this is something tether has done.

It might indeed have been such an attestation.

Re: Tether Fined $41M for Lying About Reserves

#266

Post by spiralx »

heurisko wrote: post #95
dragonwriter wrote: post #83

Earlier quoted context omitted.

> Isn't this pretty much the description of every company? Which is why we don't let private companies create currency willy-nilly anymore.

> Which is why we don't let private companies create currency willy-nilly anymore. As I understand, private banks extend loans, which while not being printing money, the loans being deposits (which can be withdrawn) the effect of creating currency is the same.

No, banks do create money through loans, a bank with zero deposits could still loan out money.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...

Re: Tether Fined $41M for Lying About Reserves

#267

Post by orthecreedence »

pkulak wrote: post #261
orthecreedence wrote: post #150

Earlier quoted context omitted.

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.

It's worth one dollar because, at least until now, Tether has sold as many as people will buy for 1 dollar, and bought as many as people will sell for 1 dollar. I get that everyone hates Tether, and I'm not a huge fan myself, but that doesn't mean that high school econ gets thrown out because you're emotional.

> and bought as many as people will sell for 1 dollar

From my understanding, they don't buy them back at all. Has this changed recently?

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