Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Tether Critical Announcement

tether.to

Post reply on HN
Print view View original

111–120 of 327 posts

Re: Tether Critical Announcement

#111

Post by ActsJuvenile »

Jd wrote: post #28

Here's some more context: Tether was originally setup as RealCoin. It originally had a clear bank account relationship with a Taiwanese bank. It had about $30mm. Then the bank cut them off. Since then they've been floating without any announced banking relationship and they also changed their terms of service. Over the same time period they made a partnership with BitFinex and their supposed AUM has gone up over 10x.…

Tell your friends they should shutdown the company immediately to avoid prison time. Using USD to back any token or digital asset 1:1 is a serious crime as demonstrated by Liberty Reserve.

Re: Tether Critical Announcement

#112

Post by jack_pp »

jerkstate wrote: post #96
panarky wrote: post #65

Earlier quoted context omitted.

Oh this is great news for Bitcoin If the price of Bitcoin has been inflated by 600 million USD that doesn't really exist, then when this unwinds it will be bad news for Bitcoin.

that's about 0.6% of the market cap of bitcoin

"market cap" is a very bad representation of the overall value which is impossible to actually estimate. try selling 600 million worth of btc and see how that cap changes.

Re: Tether Critical Announcement

#113

Post by polyomino »

iamthirsty wrote: post #100
ActsJuvenile wrote: post #95

Earlier quoted context omitted.

Tether patch invalidates the root transaction, so child transactions don't matter. Check it out on Github.

Not everyone has to/will update their clients, though.

Tether won’t honor the tethers anyway

Re: Tether Critical Announcement

#114

Post by dlp211 »

askmike wrote: post #72
panarky wrote: post #55

Earlier quoted context omitted.

It's time for a new kind of bank - a transparent bank. Exchanges could publish a daily report of their bank account balances for each currency along with a daily message signed by each cold-storage key. And the transparent bank would publish a daily record of balances for each account, which ties out to the bank's balance sheet. We wouldn't need to rely on historical audits, because we could do our own automated audi…

After the fall of mt. gox there was a huge push to get exchanges to do this. My guess is that the costs of doing this (security is quite hard: anything that can sign messages using cold storage keys can obviously also empty the cold storage, since transactions are simply signed messages) does not outweigh the demand for this. Most traders don't care (and subsequently get burned). > And the transparent bank would publ…

There is no such thing as "too much information about a market".

Re: Tether Critical Announcement

#115

Post by Jasper_ »

askmike wrote: post #91
Jasper_ wrote: post #73

Earlier quoted context omitted.

How does that prove that Tethers has USD to back each USDT? If it's all exchange-based then there's no guarantee of a peg to USD.

I 100% agree with you how risky it is and how hard to prove this is for bfx. It's very dangerous and there is a lot of money on the line (not just the tethers themselves, USDT reaches for and beyond bfx). However I don't think it's obvious that this thing will implode, based on the information we have we can only speculate. Pointing to screenshots about being unable to withtdraw tethers is a red herring and has nothi…

It's not hard at all. There's a few, very basic things that would change my tone:

1) Let users exchange USDT for USD no matter the denomination or status. If they can't do that, remove the thing that says "You always have 24/7 access to our balance" from the website marketing.

2) Release an official audit (that doesn't say "this is not an audit")

3) Explain the large amounts of Tethers being minted. If they are legitimate, who is pumping $100m into Tethers almost every 3 days? No need to be specific, but records would be nice.

4) Tell us who their banking partners are that are holding the USD.

5) Put their transparency page back up [0]. Bonus points if they actually keep the "Shareholder Equity" number negative in the interest of transparency, or explain why it might have gone negative.

[0] Compare: https://archive.is/6os3c https://wallet.tether.to/transparency

The fact that they haven't done any of these heavily imply to me that Bitfinex and Tethers are a sham operation.

Re: Tether Critical Announcement

#116

Post by ActsJuvenile »

darawk wrote: post #102
iamthirsty wrote: post #98

Earlier quoted context omitted.

> without much justification. Well, they've never proved it. Just a literal: "Hey, we promise we have the money." So, can't really say; it's basically a Schrödinger's cat to everyone on the outside. We will only know when it booms — or busts.

You're absolutely right. I'm not saying they're solvent. There just isn't any evidence that they aren't.

They just got hacked for $30 mil. Pretty safe to say they are in the red at this time.

Re: Tether Critical Announcement

#117

Post by 20after4 »

foxhop wrote: post #68

The abstractions and tech which cryptocurrency works on is fragile in most of the same ways as the layers that came before it (credit cards/banks/etc). Try to look at all this holistically. How many people and resources do we dedicate on this planet to keep track of money, economy, mine the coins, cash the checks, swipe the cards, keep the lines working? All of these abstractions make trade faster and more liquid but…

And then there is the whole "root of all evil" thing.

Re: Tether Critical Announcement

#118

Post by darawk »

ActsJuvenile wrote: post #116
darawk wrote: post #102

Earlier quoted context omitted.

You're absolutely right. I'm not saying they're solvent. There just isn't any evidence that they aren't.

They just got hacked for $30 mil. Pretty safe to say they are in the red at this time.

They may not be. $30 mil is a small percentage though. Bitfinex makes a few million per day in volume. It's not unreasonable to think they might still be solvent, even with a 30 million dollar loss. But they also might not. However, they definitely won't be if their fix to block the stolen Tethers goes through.

Re: Tether Critical Announcement

#119

Post by dluan »

ActsJuvenile wrote: post #97
sanxiyn wrote: post #58

Earlier quoted context omitted.

Check yourself. It has not moved yet: http://omniexplorer.info/lookupadd.aspx?address=16tg2RJuEPtZ...

Unless the address in question was an Exchange deposit address. In that case hacker has purchased $30mm worth of Bitcoins in a matter of hours and moved them out immediately without needing to move Tether anywhere.

There was already a BTC price spike on Nov 19.

This change was from 14 hours ago: https://github.com/tetherto/omnicore/pull/1

Couldn't you just try to find exchanges where Tether volume spiked around that time?

Re: Tether Critical Announcement

#120

Post by cloakandswagger »

iamthirsty wrote: post #98
darawk wrote: post #80

Earlier quoted context omitted.

...except that Tether long predates Bitfinex's wire issues. They're usable on many of the major exchanges (Bittrex, Poloniex, for example). Tether was explicitly created for the purpose of equalizing prices across exchanges. It's indeed possible that they're insolvent, but there is no real evidence of that, just lots of people speculating incessantly without much justification. Basically everything about the parent c…

> without much justification. Well, they've never proved it. Just a literal: "Hey, we promise we have the money." So, can't really say; it's basically a Schrödinger's cat to everyone on the outside. We will only know when it booms — or busts.

In all fairness, this isn't much different from commodity ETFs promising that they have a warehouse of gold or silver somewhere that matches the market cap of the fund. There's no easy way to completely, 100% verify this, so people just trust them.
Post reply on HN