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Tether loaned USDT to investors and illegally traded in New York, says NYAG

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Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#11

Post by nsx147 »

SimonPStevens wrote: post #6
pretfood wrote: post #2

oh man, I'm in New York and I've got Tethers. Time to pull the eject cord (on both)

Serious question. What is the reason for holding Tethers? They a supposedly pinned to the dollar, so there isn't much point in holding them hoping they will gain in value. If anything their peg is questionable so they are only likely to decrease in value. As far as I can see their only purpose is a a way of transferring between other crypto currencies and exchanges, but you would only ever need the tethers very short…

Holding tether is useful when you are trading on an exchange that has no fiat on ramp or checking account. Many exchanges are crypto-only, you send crypto in, trade, crypto out. You can hold tether if you want to be exposed to the USD position without having to send out

Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#12

Post by Lazare »

slappyjoe wrote: post #4

I still don't see how the State of New York can claim jurisdiction. I mean, it can "claim it" but good luck getting Bitfinex and Tether to comply.

Yeah, Bitfinex and Tether won't have anything to worry about...

...as long as they don't want to have USD denominated bank accounts, or transact with USD, or do business with people with USD denominated bank accounts. Which, of course, they do. If you touch the US financial system in any way, or if any of your counterparties do, or if your counterparties want to have other counterparties that do, then you need to care deeply about what the US federal government and the NY state government think.

Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#13

Post by duxup »

slappyjoe wrote: post #4

I still don't see how the State of New York can claim jurisdiction. I mean, it can "claim it" but good luck getting Bitfinex and Tether to comply.

"Tether and Bitfinex also allegedly opened accounts at several New York banks, housed most of their senior executives in the city, and engaged New York based accounting firms for audits. "

Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#14

Post by carbocation »

seibelj wrote: post #8

USDT has a strong following in APAC countries. Also for some crypto users part of its allure is that it’s vaguely sketchy - it means they are less likely to have their funds blacklisted, a feature which Tether maintains the ability to do but has never enforced as far as I’m aware. If you are getting into the space now USDC is an audited stablecoin backed by Coinbase and Circle which has the second highest issuance af…

If you want to buy cryptocurrency, why not just buy Bitcoin?

In contrast, I don't see a worthy reason to sell US dollars for any stablecoin.

Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#15

Post by carbocation »

SimonPStevens wrote: post #10
koolba wrote: post #9

Earlier quoted context omitted.

The reason is when you have some other crypto holding and you want to close out your position but not have any reportable tax or legal liability. Of course you’re trading one set of liabilities and legal ramifications for a whole new set. Plus a hell of a lot of counter party risk.

So to clarify... If you were holding bitcoin, but decided you wanted out because you think it's about to go down, you'd exchange for tether and hold that instead until you decided that bitcoin is ready to start going back up again. And you accept all the associated risk rather than fully cashing out to real dollars because your jurisdiction doesn't treat crypto to crypto purchase as a taxable event? Interesting. Than…

But if your jurisdiction is NY (as it is for OP), then this doesn't really answer your question IMHO.

Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#16

Post by xur17 »

koolba wrote: post #9
SimonPStevens wrote: post #6

Earlier quoted context omitted.

Serious question. What is the reason for holding Tethers? They a supposedly pinned to the dollar, so there isn't much point in holding them hoping they will gain in value. If anything their peg is questionable so they are only likely to decrease in value. As far as I can see their only purpose is a a way of transferring between other crypto currencies and exchanges, but you would only ever need the tethers very short…

The reason is when you have some other crypto holding and you want to close out your position but not have any reportable tax or legal liability. Of course you’re trading one set of liabilities and legal ramifications for a whole new set. Plus a hell of a lot of counter party risk.

> The reason is when you have some other crypto holding and you want to close out your position but not have any reportable tax or legal liability.

In the US trading crypto to crypto has tax liabilities.

Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#17

Post by homero »

carbocation wrote: post #14
seibelj wrote: post #8

USDT has a strong following in APAC countries. Also for some crypto users part of its allure is that it’s vaguely sketchy - it means they are less likely to have their funds blacklisted, a feature which Tether maintains the ability to do but has never enforced as far as I’m aware. If you are getting into the space now USDC is an audited stablecoin backed by Coinbase and Circle which has the second highest issuance af…

If you want to buy cryptocurrency, why not just buy Bitcoin? In contrast, I don't see a worthy reason to sell US dollars for any stablecoin.

It helps with transferring cash between exchanges

Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#18

Post by carbocation »

homero wrote: post #17
carbocation wrote: post #14

Earlier quoted context omitted.

If you want to buy cryptocurrency, why not just buy Bitcoin? In contrast, I don't see a worthy reason to sell US dollars for any stablecoin.

It helps with transferring cash between exchanges

Any quantity of Bitcoin can be transferred between exchanges for pennies these days.

Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#19

Post by carbocation »

slappyjoe wrote: post #4

I still don't see how the State of New York can claim jurisdiction. I mean, it can "claim it" but good luck getting Bitfinex and Tether to comply.

For one, because they allow people from New York to transact with them.

https://iapps.courts.state.ny.us/nyscef/ViewDocument?docInde...

Re: Tether loaned USDT to investors and illegally traded in New York, says NYAG

#20

Post by trixie_ »

SimonPStevens wrote: post #10
koolba wrote: post #9

Earlier quoted context omitted.

The reason is when you have some other crypto holding and you want to close out your position but not have any reportable tax or legal liability. Of course you’re trading one set of liabilities and legal ramifications for a whole new set. Plus a hell of a lot of counter party risk.

So to clarify... If you were holding bitcoin, but decided you wanted out because you think it's about to go down, you'd exchange for tether and hold that instead until you decided that bitcoin is ready to start going back up again. And you accept all the associated risk rather than fully cashing out to real dollars because your jurisdiction doesn't treat crypto to crypto purchase as a taxable event? Interesting. Than…

On a crypto only exchange, if you want to have some of your holdings fixed to the dollar then you hold it as tether. Usually because you are getting out of crypto or waiting to get in. Taxable events are on you to report and pay regardless.
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