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Tether starting to lose its peg too, after Terra did

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Re: Tether starting to lose its peg too, after Terra did

#591

Post by criddell »

fooyc wrote: post #489
jmyeet wrote: post #470

Earlier quoted context omitted.

Here's a question for tether "investors": why are you investing in something whose stated goal is to maintain a peg to the USD instead of, you know, just holding money in US dollars? You're adding a bunch of risk for literally no upside. The only thing you gain is to to trade that on the blockchain, which is really a response to the oracle problem. So you've greatly increased your risk with no upside to slightly incr…

My understanding is that people don't invest in stable coins (like you don't invest in USD when you have USD on your brokerage account). Stable coins can be exchanged against other crypto currencies on chain. So if you are willing to trade crypto currencies, stable coins are more practical than USD. There are also tax implications: Depending on where you live, crypto-to-crypto profits are not taxable. You will be tax…

> You will be taxed if you sell crypto currencies for USD, but not if you sell crypto currencies for a stable coin.

Does that also mean if a stable coin fails you can't write off losses?

Re: Tether starting to lose its peg too, after Terra did

#592

Post by dagw »

throwxxxaway wrote: post #581

I don't have much understanding about Tether/Crypto. You can go to Tether and they will give you 1 dollar for 1 USDT? Then, who was selling 1 USDT for $0.95 ? Why didn't those people juts go to Tether and get 1 dollar for 1 USDT?

From Tether's homepage:

"verified customers (in allowed jurisdictions) are able to redeem USDt on Tether.to for USD$1."

A lot of people aren't "verified customers" in "allowed jurisdictions".

Re: Tether starting to lose its peg too, after Terra did

#593

Post by lmm »

thkim wrote: post #259
adhesive_wombat wrote: post #30

The fact that they've been minting billions of tether without collateral should make it abundantly obvious that this isn't a stablecoin and never had been. Anyone can pretend to have a peg in the good times, that doesn't mean there's really a peg or that the peg will remain in bad times. And if you can't count on the peg in bad times, it's not a stablecoin. If you've been honestly working on the assumption that it is…

I think Tether can get away with less than 100% collateralization. At the current market cap of 82bn, even if they are only 20% collateralized, it takes 16.4bn one way movement to deplete their reserve. Is that likely event? Guess it depends, but I think market makers would be more willing to backstop them than UST shitshow. UST has "death spiral" structure that makes MMs less willing to backstop them once it goes on…

The sharks still smell blood in the water. If there's money to be made on the other side, the other side will be able to get all the capital it needs.

Re: Tether starting to lose its peg too, after Terra did

#594

Post by jmyeet »

raiyu wrote: post #468
jmyeet wrote: post #455

Earlier quoted context omitted.

I actually hate people disavowing themselves of responsibility here. While there is definitely some shady stuff in Crypto (particularly NFTs, which seem to be 99% scams), there's a certain level of personal responsibility required here. People saw the meteoric rise of Bitcoin and got a serious case of FOMO. Everyone wanted to be on the next Bitcoin. This, ultimately, is the American Dream: to get rich by doing nothin…

The American dream is to make it through hard work, what you are referring to is simple greed and laziness and it’s been around since humanity attained consciousness.

This is propaganda based on a mix of the Protestant work ethic and stoicism in an effort to keep the populace compliant and malleable. This is why political parties are constantly in the business of creating wedge issues to distract people so they don't figure out their lot in life is determined by their material conditions.

Re: Tether starting to lose its peg too, after Terra did

#595

Post by bratwurst3000 »

dagw wrote: post #576
bratwurst3000 wrote: post #572

Earlier quoted context omitted.

If people cant handle the basic of investing they shouldnt do it. If its too good to be true it mostly isnt. Is it the casino foult that their customers loose money because the ambient is so inviting and screams wining?

Is it the casino foult that their customers loose money Casinos are very strictly regulated and must post the exact rules and probability of winning for all their games. If the casino lies about the rules of the game or your chances of winning, then yes it is absolutely their fault and they will be held liable.

Yes and everyone warned everyone investing in crypto that it could go from hero to zero instantly. I cant believe anyone didnt know this risk.

Re: Tether starting to lose its peg too, after Terra did

#596

Post by mumblemumble »

bratwurst3000 wrote: post #572
Mvandenbergh wrote: post #472

Earlier quoted context omitted.

The reasons this is nonsense are twofold: First, I have never actually seen any comments here disavowing themselves of responsibility. It is always aimed at protecting others and this is rooted in the obvious fact that a very large number of people are not (and we do not expect them to be) experts in investment. That assets can go up or down is one thing, and nobody can be protected from that, but there is an extensi…

If people cant handle the basic of investing they shouldnt do it. If its too good to be true it mostly isnt. Is it the casino foult that their customers loose money because the ambient is so inviting and screams wining?

That word "fault" is doing a lot of work. Strictly speaking, no, that bit isn't a fault, it's a great success. They did exactly what they set out to do.

But there's always that separate question of whether it's a moral failing to set out to do what they did in the first place.

And then you dig a little deeper and you can ask, even if we grant for the sake of argument that it's a moral failing, is it the state's responsibility to do anything about that?

And then you can dig even deeper, maybe ease off on the deontological ethics a bit, and instead ask, "What's worse for society in the long run: this behavior, or whatever enforcement mechanisms it would take to curb it?" I'd argue that that's a much more edifying way to frame the question.

Re: Tether starting to lose its peg too, after Terra did

#598

Post by ceejayoz »

hanniabu wrote: post #565
ceejayoz wrote: post #548

Earlier quoted context omitted.

> Consider that being "nakedly" unbacked (no underlying assets) in any meaningful capacity would qualify Tether's leadership for a quick trip to prison — as they've repeatedly said they were fully backed. They said on their website they were regularly audited, too, and never completed one. There’s years worth of clear lies from Tether.

They did internal audits but not external ones, which of course it's what everyone assumes

Why did they feel the need to post misleading third-party documents they claimed were audits, then?

Why did they admit to dissolving their relationship with their auditor without completing one?

https://www.coindesk.com/markets/2018/01/27/tether-confirms-...

> We confirm that the relationship with Friedman is dissolved. Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame.

https://www.cftc.gov/PressRoom/PressReleases/8450-21

> The Tether order finds that since its launch in 2014, Tether has represented that the tether token is a stablecoin with its value pegged to fiat currency and 100% backed by corresponding fiat assets, including U.S. dollars and euros. However, the Tether order finds that from at least June 1, 2016 to February 25, 2019, Tether misrepresented to customers and the market that Tether maintained sufficient U.S. dollar reserves to back every USDT in circulation with the “equivalent amount of corresponding fiat currency” held by Tether and “safely deposited” in Tether’s bank accounts. In fact Tether reserves were not “fully-backed” the majority of the time. The order further finds that Tether failed to disclose that it included unsecured receivables and non-fiat assets in its reserves, and that Tether falsely represented that it would undergo routine, professional audits to demonstrate that it maintained “100% reserves at all times” even though Tether reserves were not audited.

Re: Tether starting to lose its peg too, after Terra did

#599

Post by SamBam »

jmyeet wrote: post #589
Mvandenbergh wrote: post #472

Earlier quoted context omitted.

The reasons this is nonsense are twofold: First, I have never actually seen any comments here disavowing themselves of responsibility. It is always aimed at protecting others and this is rooted in the obvious fact that a very large number of people are not (and we do not expect them to be) experts in investment. That assets can go up or down is one thing, and nobody can be protected from that, but there is an extensi…

> First, I have never actually seen any comments here disavowing themselves of responsibility. Pulling from the comment I was replying to: > ... many poorer and financially illeterate people have been tricked ... That's quite literally disavowing responsibility. > ... but there is an extensive body of law intended to protect people from outright falsehoods This is true and the law hasn't quite caught up to crypto sca…

> That's quite literally disavowing responsibility.

Unsure how you failed to read the emphasis on "themselves" in the comment you're replying to, and the line about protecting others.

Re: Tether starting to lose its peg too, after Terra did

#600

Post by mensetmanusman »

grover35 wrote: post #582
mensetmanusman wrote: post #460

Earlier quoted context omitted.

This mentality of blaming the victim can muddy the waters and make it easier for criminals to get off the hook though.

No one sets out to blame the victim, that's a stupid Reddit phrase that doesn't mean anything

Not necessarily.

One of the ways that a power structure discriminates against low-IQ people (born that way) is by ignoring their suffering because ‘they deserve it for being stupid/easily taken advantage of.’

Insurance agencies are wrestling with this because as society ages, there are known drops in IQ the make the elderly more susceptible to scams, because low-IQ behavior correlates with high-trust behavior (because they have to rely more on others for survival). Some agencies are offering scam insurance for the elderly.

As we age, the likelihood that we are scammed approaches 1. Scammers take advantage of this situation and society would be better off if scammers were taken care of by the state.

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