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Federal investigators probe Tether

wsj.com

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Re: Federal investigators probe Tether

#31

Post by yieldcrv »

satvikpendem wrote: post #5

Ah, finally, will Tether get its day in the litigious sun? It's well known in cryptocurrency circles that their coin is not backed 1:1 to USD, similar to FTX, only that FTX crashed and this was found out the easy way. Cracking Tether will be much harder as they resist audits.

> It's well known in cryptocurrency circles that their coin is not backed 1:1 to USD

Its well known in the legal space and has already been addressed by multiple US courts. They're not looking for that and this isn't controversial.

Those court cases already happened in 2018-2020. Tether just needed to update its language. A financial institution not backed 1:1 to USD isn't a problem in any part of the banking sector, they just need a disclaimer that says that, and Tether updated their's and moved on. Those court cases were also about specific periods of time and were very intelligent and more nuanced than the Tether discourse in crypto spaces. Tether has periodically had more assets available, and its only controversy was about whether those were USD and US Treasuries amongst other things.

This is a probe about violating AML laws and sanctions. Which would likely only involve specific addresses in crypto and some onramps. But otherwise crypto-crypto trading won't be a part of this.

Re: Federal investigators probe Tether

#32

Post by alchemist1e9 »

JumpCrisscross wrote: post #27
alchemist1e9 wrote: post #26

Earlier quoted context omitted.

I will try to find it. I would also point out they hold excess reserves in Bitcoin. My guess is nobody can get them on not being 1:1 but this idea of AML violations as the attack vector makes a lot of sense.

> they hold excess reserves in Bitcoin We had precisely the same amount of information about FTX's Bitcoins as we do for Tether, for what it's worth.

bc1qjasf9z3h7w3jspkhtgatgpyvvzgpa2wwd2lr0eh5tx44reyn2k7sfc27a4

Isn’t that the public Tether bitcoin address with over 75K coins?

https://platform.arkhamintelligence.com/explorer/address/bc1...

That's precisely A LOT more than anyone knew about FTX's non-existent Bitcoin.

Re: Federal investigators probe Tether

#33

Post by dogmayor »

alchemist1e9 wrote: post #13

https://x.com/paoloardoino/status/1849876338573799912 CEO of Tether - “As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.”

Yeah that's not how investigations work. USAOs don't publicize ongoing investigations for obvious reasons. Once they wrap up an investigation but before convening a grand jury to indict, they may send a target letter, but they typically don't. Most often, people don't find out until they're indicted.

Re: Federal investigators probe Tether

#34

Post by pessimizer »

Both presidential candidates have signaled that they are pro-crypto scams (and one thinks that has something to do with the welfare of black men.) It's too late. Bitcoin has entered the house price zone, where people are elected to office on promises to make housing as expensive as possible. We'll have to wait until crypto brings down the entire economy. And after it does, the people who hold it will be bailed out:

"Do you know how many disadvantaged minorities are invested in crypto? Especially after we allowed them to invest their social security into it, with matching contributions from the state if they agree to hodl? Are you a racist monster?"

Meanwhile 90% of black people will have 90% of their savings in crypto, accounting for less than 2% of all crypto holdings.

FTX so far was barely a speedbump. All it taught politicians is that there's a lot of money in doing what crypto whales say, and absolutely no consequences even if it goes belly up in the worst way.

Re: Federal investigators probe Tether

#35

Post by bombcar »

alchemist1e9 wrote: post #26
cool_dude85 wrote: post #24

Earlier quoted context omitted.

Can you link one of these investigations that show that tether is backed more than 1:1 with the USD?

I will try to find it. I would also point out they hold excess reserves in Bitcoin. My guess is nobody can get them on not being 1:1 but this idea of AML violations as the attack vector makes a lot of sense.

Isn't the whole argument against Tether that they print Tether out of nothing, buy Bitcoin with it, and now have Bitcoin (and increased the price of Bitcoin)?

Re: Federal investigators probe Tether

#36

Post by HWR_14 »

JumpCrisscross wrote: post #4

Tether was launched in 2014 [1]. It has over $120bn in outstanding liabilities against unknown assets [2]. When it fails, it will rival the fourth-largest 'bank' failure in U.S. history [3]. This has been a complete failure of U.S. regulatory bodies. [1] https://www.investopedia.com/terms/t/tether-usdt.asp [2] https://coinmarketcap.com/currencies/tether/ [3] https://en.wikipedia.org/wiki/List_of_largest_bank_failures…

Aren't you comparing the wrong values. Those banks that failed had more assets than tether has liabilities.

However, the actual difference between assets and liabilities was significantly less than 120bn for those banks. With Tether, I imagine the collapse will go from 1:1 redemptions day 1 to "oops all gone" day 2.

So I expect Tether to be the largest "bank" failure in US history by terms of loss of value.

Re: Federal investigators probe Tether

#37

Post by Bluescreenbuddy »

alchemist1e9 wrote: post #13

https://x.com/paoloardoino/status/1849876338573799912 CEO of Tether - “As we told to WSJ there is no indication that Tether is under investigation. WSJ is regurgitating old noise. Full stop.”

Going to screenshot that incase it ages like milk.

Re: Federal investigators probe Tether

#38

Post by jujube3 »

alchemist1e9 wrote: post #18
satvikpendem wrote: post #5

Ah, finally, will Tether get its day in the litigious sun? It's well known in cryptocurrency circles that their coin is not backed 1:1 to USD, similar to FTX, only that FTX crashed and this was found out the easy way. Cracking Tether will be much harder as they resist audits.

> It's well known in cryptocurrency circles that their coin is not backed 1:1 to USD, similar to FTX, only that FTX crashed and this was found out the easy way. Being speculated about is not the same as “known”. In fact every tether investigation seems to end up showing they are even over capitalize and hold more than 1:1! My understanding of the audit situation was that the big accounting firms have refused to do it…

It would be very simple for Tether to just hold $1 for each 1 Tether coin. They could invest their cash in safe assets like treasury bills that yield 4% or more. Meanwhile, they pay no interest in Tethers. So they get a 4% return for doing nothing at all.

As far as I know, there is no evidence that they are doing anything else. (There is some evidence that they did something else in the past, when interest rates were way lower.) But this hasn't stopped tons of people from speculating that they are.

Re: Federal investigators probe Tether

#39

Post by [deleted] »

yieldcrv wrote: post #31
satvikpendem wrote: post #5

Ah, finally, will Tether get its day in the litigious sun? It's well known in cryptocurrency circles that their coin is not backed 1:1 to USD, similar to FTX, only that FTX crashed and this was found out the easy way. Cracking Tether will be much harder as they resist audits.

> It's well known in cryptocurrency circles that their coin is not backed 1:1 to USD Its well known in the legal space and has already been addressed by multiple US courts. They're not looking for that and this isn't controversial. Those court cases already happened in 2018-2020. Tether just needed to update its language. A financial institution not backed 1:1 to USD isn't a problem in any part of the banking sector,…

[deleted]

Re: Federal investigators probe Tether

#40

Post by FireBeyond »

ldjkfkdsjnv wrote: post #28

How bitcoin got huge was basically tether money printing. since it wasnt backed by anything, they just printed tether and bought bitcoin. a group did it behind the scenes, got massively wealthy.

And at stupid numbers that cryptofans just ate up like it was perfectly logical.

"Oh, you're banking $700M PER DAY in deposits for Tether? Sounds legit to me!"

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