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Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

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111–120 of 149 posts

Re: Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

#111
post #2

Each disabled token is pure profit to Tether. They're not cashing them out to the US Treasury, as with Bitcoins recovered from criminal operations.

It's an interesting question: What does that mean? Maybe it's better to look at cryptocurrencies as financial securities, shares in an asset controlled by a private company (as has been said many times before). Could General Electric 'disable' the shares of a shareholder? What would that mean? The shareholder can't sell their shares, I suppose, but GE's equity would remain the same (not counting any market movement t…

It's actually more equivalent to a stock reverse-split than locked up shares.

When coins are lost, they stop circulating; that amount - of active, unique coins - is the M1 value, or the amount of circulating currency. Just like if you burn a key, or mint or destroy a trillion dollar coin thats in the Reserve, or disable shares, the value is derived from the scarcity of the resource.

Technically the "uncirculated" money has value, but only as "capital", as it's generally a liquid asset or borrowed against collateral. Uncirculated currency and coins are generally just a very flat asset, just eroding by inflation.

Re: Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

#112

Earlier quoted context omitted.

Crypto bad, can’t you see? No need to justify claims when you’re bashing The Bad Thing.

Tether is a well known scam. We have no idea that they have any backing for the amount of tokens they’ve issued and we have significant indications they don’t.

It may be insolvent, and that may mean "scam" to you, but those words are different.

Even if they claim full backing and don't, they have lied.

Whether that is substantially and materially a sole qualifier in determining them a fraud and scam, is for the legal system, not an assortment of most vocal persons, to decide.

Re: Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

#113
post #37

Earlier quoted context omitted.

It's not exactly a secret. The US dollar's proliferation is an extremely good thing to happen in the world - our modern banking system is one of our greatest inventions.

It’s a very effective way to tax foreign countries too. Just print a few trillion and let the small countries pay the costs in inflation.

To silently tax future generations*

Inflation sucks in the US too.

It's not just unfounded common sentiment, the TV just wants everyone to think so.

Re: Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

#114

Notably, this is a coin used by a lot of cryptominers, many of whom are Chinese who fled the ban in China on crypto mining and also to export their wealth in a way they can't otherwise because China doesn't allow transfer of currency out of the country. Example: https://www.nytimes.com/2023/12/25/technology/bitrush-bitcoi... ...so now gigawatts of electricity are being used here to generate more wealth for chinese bi…

Real estate is how China allows their citizens to move money out of country. If the money is at all legitimate, there is a vehicle. I’ve been around the world, and I’ve been as much Chinese real estate as I’ve seen, makes me think there is very little legitimate money in crypto for this application.

Crypto has three legitimate uses and a few less than legit ones:

Drugs, money laundering (from China) / tax evasion, csam, ransomware, and soon, common crime.

Re: Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

#115
post #40

Earlier quoted context omitted.

For whom?

For everyone. The answer would be the same if the yuan was the world's reserve currency. Having a single reserve currency is just good. Please don't conflate your distaste for a country's politics as somehow obviating the unbridled success of the global economy.

I can't tell if you're being sarcastic or not.

Re: Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

#116

Earlier quoted context omitted.

It’s a very effective way to tax foreign countries too. Just print a few trillion and let the small countries pay the costs in inflation.

To silently tax future generations* Inflation sucks in the US too. It's not just unfounded common sentiment, the TV just wants everyone to think so.

Radio, too. NPR Marketplace and NYTimes' The Daily have been insufferable for months.

Re: Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

#118
post #46

Earlier quoted context omitted.

I think it relates to this quote from the article: "Tether is grateful for the opportunity to address the concerns raised by U.S. lawmakers, and we are committed to continuing Tether’s close work with law enforcement in the U.S. and globally. Tether seeks to be a world class partner to the U.S. as we continue to assist law enforcement and expand dollar hegemony globally." ~ a dedication to working together in the fut…

Which is itself a weird phrasing. OFAC compliance is an obligation, not an "opportunity".

In lay men’s terms this is called ass kissing.

Re: Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

#119

Earlier quoted context omitted.

Companies absolutely can "disable" trading by certain shareholders. This is what an IPO lock-up is, where insiders cannot sell their shares until 6-12 months after the conclusion of the IPO. It's also what a trading blackout is, where employees cannot trade shares between the end of the quarter and release of earnings. These are very common - almost everyone who works for a public company has encountered them. These…

Good points about trading that's disabled. I just wonder what is the same and different about cryptocurrencies like Tether's. > They simply drop out of circulation, and the price of all other Bitcoin rises to compensate. Would that be different for Tether? Isn't Tether a 'private' blockchain that the company controls?

The difference with Tether is that its value is ostensibly pegged to the dollar, with each Tether being backed 1:1 with real dollar reserves. So its price doesn't float with supply & demand. Instead, for each Tether that is "locked", it's one less person who has a claim on Tether Ltd's bank reserves.

It's debatable whether Tethers are actually backed by dollars 1:1; people have long suspected that Tether Ltd mints them out of thin air based simply on promises (i.e. fraud). And occasionally the price has dropped below $1 as suspicions grow and folks try to exit Tether. So it's good for the company to have Tether holder accounts locked, as it means they have fewer liabilities and less chance of a bank run.

Re: Tether reveals partnerships with Secret Service, FBI in letter to U.S. Senate

#120

Earlier quoted context omitted.

Yes, the NY investigation was all about this: they patched up the loss and quietly changed their terms to being backed by cash or equivalents . And they later detailed the $1bn Tether printed for Celcius in return for collateral (once Celcius collapsed and they claimed it was fully repaid). Understand: for modern banks this kind of fractional behaviour is considered normal. It's only from the weird Bitcoin perspectiv…

So in other words, an investigation took place, changes were made, and Tether was allowed to continue to operate?

Yes. The history of authorities protecting users before failure in the cryptocurrency world is fairly empty, however.

TBH I'm not sure if they're allowed to operate in NY though.

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