Earlier quoted context omitted.
Just another reason why crypto is inferior. So much risk , no upside. like investing in mortgage/ bank stocks in 2007.
Tell that to all the Bitcoin billionaires and millionaires, lol.
some people win the lottery too
Federal investigators probe Tether
111–120 of 127 posts
Re: Federal investigators probe Tether
#112For those doubting that Tether is fully backed, note that Howard Lutnick, CEO of Cantor Fitzgeral, one of the largest investment banks and a public company, has stated that Cantor Fitzgeral manages Tether’s money and indeed the money is all there and invested in US treasury bonds
They have $118.4 billion in USD reserves?
Re: Federal investigators probe Tether
#113Earlier quoted context omitted.
How is that possible? They were thought to have less than half of the dollars they’re supposed to be holding!
Banks have like 10% or even less the dollars that they are supposed to be holding, but still are doing all fine. Personally I don't think these tether conspiracy theories were ever true. Maybe they aren't 1:1 backed, but they have always been financially well off enough to keep the company running. And after the interest rates went up, they are probably making a killing. Typical bank has minimal reserves compared to…
Banks have extreme requirements on that ratio though, and have been regulated to death (for good reason) for a hundred years
Re: Federal investigators probe Tether
#114The U.S. federal government is investigating Bureau of Engraving and Printing's "US Dollar" notes for possible violations of sanctions and anti-money-laundering rules, according to people familiar with the matter.
The criminal investigation, run by prosecutors at the Manhattan U.S. attorney’s office, is looking at whether notes "tethered" to the Federal Reserve's "dollar" have been used by third parties to fund illegal activities such as the drug trade, terrorism and hacking—or launder the proceeds generated by them.
The Treasury Department, meanwhile, has been considering sanctioning the Federal Reserve because of the Bureau of Engraving and Printing's currency notes' widespread use by individuals and groups sanctioned by the U.S., including the terrorist group Hamas and Russian arms dealers. Sanctions against the Federal Reserve would generally prohibit Americans from doing business using the notes.
Re: Federal investigators probe Tether
#115Earlier quoted context omitted.
How is that possible? They were thought to have less than half of the dollars they’re supposed to be holding!
Banks have like 10% or even less the dollars that they are supposed to be holding, but still are doing all fine. Personally I don't think these tether conspiracy theories were ever true. Maybe they aren't 1:1 backed, but they have always been financially well off enough to keep the company running. And after the interest rates went up, they are probably making a killing. Typical bank has minimal reserves compared to…
> Banks have like 10% or even less…
That’s completely untrue, and Tether isn’t a bank.
Re: Federal investigators probe Tether
#116Earlier quoted context omitted.
Banks have like 10% or even less the dollars that they are supposed to be holding, but still are doing all fine. Personally I don't think these tether conspiracy theories were ever true. Maybe they aren't 1:1 backed, but they have always been financially well off enough to keep the company running. And after the interest rates went up, they are probably making a killing. Typical bank has minimal reserves compared to…
> Banks have like 10% or even less… That’s completely untrue, and Tether isn’t a bank.
Yeah, banks hold much less than 10%, as of 2020 the reserve requirement is 0%.
Re: Federal investigators probe Tether
#117Earlier quoted context omitted.
> Howard Lutnick, CEO of Cantor Fitzgeral, one of the largest investment bank and a public company, has stated that Cantor Fitzgeral manages Tether’s money and indeed the money is all there and invested in US treasury bonds Source? I'm seeing Fitzgerald say "Cantor Fitzgerald manages 'many many' of" Tether's assets (not all) and that he can vouch for their balance sheet [1]. But not that Cantor manages all of its ass…
The most comprehensive and forceful statements are in this video: https://youtu.be/IjR3Hj0aRW4?si=s2D0wjQOIS5uiFKh
8:45
Re: Federal investigators probe Tether
#118Earlier quoted context omitted.
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…
> It would be very simple for Tether to just hold $1 for each 1 Tether coin. It would not be "very simple" for them to do this. No commercial bank lets you walk up to the teller with $1B and ask to deposit it, much less $93B. The financial system doesn't work that way. They have to cycle it through bonds on the repo market, which is what most huge firms do.
This seems like annoying pedantry. Holding same-as-cash assets is not rocket science, there are plenty of professionals who could help you with that. On Vanguard you can buy things like T-bills with a few clicks. (I am not suggesting that they're using Vanguard specifically)
Re: Federal investigators probe Tether
#119Earlier quoted context omitted.
That is what banks do. But it’s more complicated because the current trading value of a bond is not the same as the expected return you’d get if you hold it to maturity. Last year Silicon Valley Bank and others got into trouble for this reason. Let’s say you invested $100M into a 10-year bond when interest rates were at 2%. With interest, you’ll be getting back about $122M in ten years. Nice. But what if you’re a ban…
But banks also make loans, and do fractional reserve banking, so obviously owning bonds isn't enough.
The Fed doesn't let banks do this because it would be "too safe"
Re: Federal investigators probe Tether
#120Earlier quoted context omitted.
> 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…
What you describe is their actual business model.
Tether makes the most profit per employee of any company in the world. Their transparency, speed, and market success is renown.
This thread is full of tether truthers living in 2017.