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Tether Critical Announcement

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Re: Tether Critical Announcement

#131

Post by repomies691 »

ActsJuvenile wrote: post #93
patio11 wrote: post #4

If you haven't been following along, here's why this matters: Tethers is a sole-source cryptocurrency, pegged to the US dollar. Bitfinex produces it, though they're cagey (some would say outright lying at times) about the level of involvement. The primary purpose of tethers is money laundering, even more so than cryptocurrency generally. Bitfinex was cut off from the US financial system, which makes it impossible for…

Tether announcement on their own website mentions their Taiwan banks have frozen all international wire transfer since April 18: https://tether.to/announcement/ Tether has printed $600 million worth of tokens since, so either: 1) Local Taiwanese have deposited $600 million to buy Bitcoins through domestic wires, OR 2) Tether is lying and printing tokens out of thin air. Place your bets gentlemen.

They can also peg the value using BTC. Basically they just buy using their dollars/fiat some BTC, deposit it to exchanges, and then using some simple bot beg the value of the USDT to USD with bid orders. And vice versa, they can have some USDT on exchanges and have ask orders so that people can buy USDT using BTC. If there are more buys than sells, then they withdraw the BTC and sell it for dollars/fiat.

They don't need to do that on that many exchanges to have effective peg to USD. However they of course still need traditional bank accounts, and they need to trade the BTC on OTC markets or somewhere else.

Re: Tether Critical Announcement

#132

Post by Nemant »

ActsJuvenile wrote: post #105
dangero wrote: post #83

I released a paper earlier this year talking about how we can reasonably lock cryptocurrency to fiat, but unfortunately the space is still rather immature. A single provider of USD tokens is extremely dangerous. Best case scenario would be if there were many companies like Tether and you could spread your token purchases between them automatically to minimize counterparty risk. Stellar and Ripple are closest to solvi…

Ripple is a scam and Jed McCaleb has been dumping thousands of Ripples a day since forever. You shouldn't encourage new users to buy Ripples.

Could you elaborate more on this point?

Re: Tether Critical Announcement

#133

Post by dcw303 »

Looking at the attacker's address in Omni Explorer: https://omniexplorer.info/lookupadd.aspx?address=16tg2RJuEPt...

I'm finding this a little confusing as it looks like BTC blockchain addresses can also be Tether addresses. Is this correct?

They are currently holding $30.9M USDT. If they transfer this to another USDT address, I assume it would show up here, like the 3 inbound tx from 31okFF1rUu8jjPEVuajycTRBp82Nteo4Mv that makes up their balance.

But what if they want to cash out to BTC? If they bought on Bitfinex with their USDT would another transaction appear? And could it then be tracked to the BTC blockchain explorer?

It was claimed that the stolen USDT could be mixed into the main supply of BTC, but I'm failing to understand how that would happen, as it seems traceable from the public addresses.

Re: Tether Critical Announcement

#134

Post by gciruelos »

patio11 wrote: post #4

If you haven't been following along, here's why this matters: Tethers is a sole-source cryptocurrency, pegged to the US dollar. Bitfinex produces it, though they're cagey (some would say outright lying at times) about the level of involvement. The primary purpose of tethers is money laundering, even more so than cryptocurrency generally. Bitfinex was cut off from the US financial system, which makes it impossible for…

This is awesome, great write-up, thank you very much.

You briefly mention that crypto-currencies are used for money laundering. Do you think that's what's driving btc price to insane levels? Or is it just good old euphoria?

Re: Tether Critical Announcement

#135

Post by kijin »

bufferoverflow wrote: post #101
patio11 wrote: post #4

If you haven't been following along, here's why this matters: Tethers is a sole-source cryptocurrency, pegged to the US dollar. Bitfinex produces it, though they're cagey (some would say outright lying at times) about the level of involvement. The primary purpose of tethers is money laundering, even more so than cryptocurrency generally. Bitfinex was cut off from the US financial system, which makes it impossible for…

Why are you singling out Bitcoin though? All cryptocurrencies are affected by this.

Because Bitcoin matters more than all of the other coins combined?

Insofar as market cap means anything, Bitcoin alone takes up about 56% of the sum of all cryptocurrencies listed on coinmarketcap.

Re: Tether Critical Announcement

#136

Post by kobeya »

askmike wrote: post #126
darawk wrote: post #103

Earlier quoted context omitted.

The post I was responding to claimed Tether was specifically created to address Bitfinex's wire issues. That is false. It may be that they created it to address theoretical, speculative wire issues that they might someday encounter in the future, but there is no evidence to support that hypothesis. Secondly, there is plenty of reason to create something like Tether independently of any wire issues (specifically: to n…

Come on man.. > The post I was responding to claimed Tether was specifically created to address Bitfinex's wire issues. That is false. It does not claim that it was "specifically created for that", it claims that "Their solution" to the wire problems was "Tether". It does not state anything about why Tether was created in the first place. > Secondly, there is plenty of reason to create something like Tether independe…

I read the patio11 post as implying very strongly that Bitfinex was responsible in some way for Tether, when in fact that couldn’t be further from the truth.

Re: Tether Critical Announcement

#137

Post by Nursie »

mdpopescu wrote: post #82
goialoq wrote: post #62

Earlier quoted context omitted.

moving money around without record-keeping to prove it wasn't criminally obtained is a serious crime.

We know. The point was that it's malum prohibitum (a crime because it's forbidden), not malum in se (evil by itself). [1] [1] https://en.wikipedia.org/wiki/Malum_prohibitum

Given the way the financial world occasionally fucks everyone, I think that large scale unauditable transfers of cash around the place may well be bad in and of themselves.

Re: Tether Critical Announcement

#138

Post by darawk »

askmike wrote: post #126
darawk wrote: post #103

Earlier quoted context omitted.

The post I was responding to claimed Tether was specifically created to address Bitfinex's wire issues. That is false. It may be that they created it to address theoretical, speculative wire issues that they might someday encounter in the future, but there is no evidence to support that hypothesis. Secondly, there is plenty of reason to create something like Tether independently of any wire issues (specifically: to n…

Come on man.. > The post I was responding to claimed Tether was specifically created to address Bitfinex's wire issues. That is false. It does not claim that it was "specifically created for that", it claims that "Their solution" to the wire problems was "Tether". It does not state anything about why Tether was created in the first place. > Secondly, there is plenty of reason to create something like Tether independe…

> It does not claim that it was "specifically created for that", it claims that "Their solution" to the wire problems was "Tether". It does not state anything about why Tether was created in the first place.

Read the post, man, very first paragraph:

> Bitfinex was cut off from the US financial system, which makes it impossible for them to clear USD-denominated wires...Their solution: issue a cryptocurrency which is claimed to be 100% backed by USD and say that it is redeemable 1-to-1 for dollars... we just can't actually physically give you the dollars.

> People will arb the effiencies away anyway, regardless of what tools the exchanges provide them. Besides tether a lot of people in Taiwan are arbing through the traditional banking system [0].

That's true, except you probably have never tried to actually execute that kind of arbitrage before. I have, so let me tell you the problem tether solves: speed. If you do arbitrage through the banking system, you have to wait for wire transfers to clear. That can take days to weeks. That means you have to wait for the spreads to be large enough and stable enough to compensate you for the enormous risk of being exposed to the vicissitudes of the crypto markets during that time. And that's assuming you already have the accounts setup in the right countries. Tether makes all that instantaneous. That is an enormous benefit to arbitrageurs equalizing prices, and inter-exchange liquidity.

Re: Tether Critical Announcement

#139

Post by shobith »

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…

I understand your sentiment.

However, I think about it slightly differently -- crypto currencies (and their likes) are just an attempt to replace man-power with computer-power. We need someone to enforce the rules without human intervention, hence, freeing up more people to do stuff that doesn't involve managing the abstraction of money.

edit: When we imagine "mining" in this realm, it'd help to think in terms of mining abstract resources like cost for verification of a transaction, rather than tangible resources like coal.

Re: Tether Critical Announcement

#140

Post by patio11 »

kobeya wrote: post #136
askmike wrote: post #126

Earlier quoted context omitted.

Come on man.. > The post I was responding to claimed Tether was specifically created to address Bitfinex's wire issues. That is false. It does not claim that it was "specifically created for that", it claims that "Their solution" to the wire problems was "Tether". It does not state anything about why Tether was created in the first place. > Secondly, there is plenty of reason to create something like Tether independe…

I read the patio11 post as implying very strongly that Bitfinex was responsible in some way for Tether, when in fact that couldn’t be further from the truth.

https://twitter.com/Bitfinexed/status/932139909237833728
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