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$1M bounty for details on Tether’s backing

hindenburgresearch.com

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Re: $1M bounty for details on Tether’s backing

#31

Post by rossdavidh »

xur17 wrote: post #16
rexstjohn wrote: post #12

Federal Reserve was crafted in a secret meeting on Jekyll Island ( https://en.m.wikipedia.org/wiki/Federal_Reserve ) between industry and government. Still exists and functions today. Lot of people don’t like it, but it’s there regardless. Even if the origin, operation of Tether is highly suspicious: if it functions, is widely adopted and does what is expected … may last longer than people think. Best response is mor…

> Even if the origin, operation of Tether is highly suspicious: if it functions, is widely adopted and does what is expected … may last longer than people think. I think you're right about this point, and I've been trying to imagine what might cause Tether to collapse - you really need a run on the bank situation triggered by something causing them to become insolvent.

Like, say, a bunch of Chinese firms who need cash quickly to pay dollar-denominated bonds, all selling their Tether at the same time?

Re: $1M bounty for details on Tether’s backing

#32

Post by skybrian »

tcgv wrote: post #19
filvdg wrote: post #4

Disclosure: Hindenburg Research does not hold positions, either long or short, in Tether, bitcoin or any cryptocurrency at the time of this press release.

I wonder why this Reaserch firm is offering such a substantial bounty for information on Tether. What's in it for them? Where will this money come from? From their site they provide an answer (and even a "track record") [1]: > We look for (...) man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims. Hence it seems they're doing it for the bennefit…

There are firms that look for good opportunities to short stocks. Find some credible bad news, short the stock, then publicize the bad news.

If the news is actually true, this might even be considered a public service (as well as obviously a way to make money).

They probably wouldn’t do until they actually got a tip. Also, they might short crypto-related stocks if that’s easier.

Re: $1M bounty for details on Tether’s backing

#35

Post by perl4ever »

rexstjohn wrote: post #12

Federal Reserve was crafted in a secret meeting on Jekyll Island ( https://en.m.wikipedia.org/wiki/Federal_Reserve ) between industry and government. Still exists and functions today. Lot of people don’t like it, but it’s there regardless. Even if the origin, operation of Tether is highly suspicious: if it functions, is widely adopted and does what is expected … may last longer than people think. Best response is mor…

When people say "hey, Tether is no worse than the existing financial system" I wonder if they don't understand the difference between holding a fraction of deposited money as reserves, and only having a fraction of deposited money as assets, period. As far as I know, when the latter happens in a real bank, they get shut down, shareholders lose their money, and only the FDIC saves the depositors.

Just because that's the primary factoid I know about banking.

Re: $1M bounty for details on Tether’s backing

#36

Post by spzb »

humanbeinc wrote: post #10

But... does it ultimately matter? All the other sh*tcoins are backed against nothing and have huge market caps as well.

It’s almost certain now that Tether doesn’t have fiat currency to back up its claimed value. But it’s a convenient fiction for everyone to keep believing as long as you’re not the one holding the Tethers when everyone suddenly decides to stop believing.

Re: $1M bounty for details on Tether’s backing

#37

Post by lgierth »

Taikonerd wrote: post #9
graeme wrote: post #2

This is very interesting. Hindenburg is the real deal. One challenge may be that, like the Mafia, Tether keeps its inner circle and employs family members. They have ~15 employees for a 70 billion dollar operation. The CTO’s wife is a manager, and the CEO’s daughter works for an unnamed crypto family office, which may be related. Their counterparties in Chinese commercial paper may not know they are counterparties du…

I just realized that the Bloomberg reporter who wrote the recent story is named "Zeke Faux." ( Faux meaning "fake" in French, in a story about fraud.) Is his name a pseudonym? If not, it's another surreal point in a surreal story.

Zeke = ZK = zero-knowledge?

Re: $1M bounty for details on Tether’s backing

#38

Post by Traster »

xur17 wrote: post #16
rexstjohn wrote: post #12

Federal Reserve was crafted in a secret meeting on Jekyll Island ( https://en.m.wikipedia.org/wiki/Federal_Reserve ) between industry and government. Still exists and functions today. Lot of people don’t like it, but it’s there regardless. Even if the origin, operation of Tether is highly suspicious: if it functions, is widely adopted and does what is expected … may last longer than people think. Best response is mor…

> Even if the origin, operation of Tether is highly suspicious: if it functions, is widely adopted and does what is expected … may last longer than people think. I think you're right about this point, and I've been trying to imagine what might cause Tether to collapse - you really need a run on the bank situation triggered by something causing them to become insolvent.

The real question is basically how much is it leveraged. We learned this from so many other frauds/crashes. It's not so much that "as long as there isn't a run on the bank it's fine" it's that an outflow of a tiny percentage could effectively be a run on the bank, since they may only be backed by a tiny fraction of what they claim to be backed by. It's one thing if they have 90% backing. What happens if it turns out it's only backed 0.05%? A run on the bank won't kill them, an averagely bad few days could see it all collapse. This is exactly why banks have regulations.

Re: $1M bounty for details on Tether’s backing

#39

Post by exdsq »

paulpan wrote: post #21

Last week CFTC fined both Tether and Bitfinex $42.5M for allegedly not holding enough reserves and colluding together. https://www.cftc.gov/PressRoom/PressReleases/8450-21 Seems like a fairly small fine in grand scheme of things no? If the critics are right and $70B+ supply is just made up paper money, then it'll be huge losses for all Tether holders. I'd conjecture it would tank the entire crypto market - and possib…

Or people will accept it as paper dollars and carry on regardless. Honestly this wouldn't surprise me - it'll just be a representation of the dollar that things use as an intermediary step.

Re: $1M bounty for details on Tether’s backing

#40

Post by paulpauper »

tcgv wrote: post #19
filvdg wrote: post #4

Disclosure: Hindenburg Research does not hold positions, either long or short, in Tether, bitcoin or any cryptocurrency at the time of this press release.

I wonder why this Reaserch firm is offering such a substantial bounty for information on Tether. What's in it for them? Where will this money come from? From their site they provide an answer (and even a "track record") [1]: > We look for (...) man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims. Hence it seems they're doing it for the bennefit…

so they can trade on it before announcing it and then with the profit pay for the bounty, assuming they pay up or assuming tether falls. Tether has survived thus far everything thrown at it. The market is evidently very confident about tether.
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