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Tether Critical Announcement

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Re: Tether Critical Announcement

#161

Post by darawk »

thisisit wrote: post #153
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…

> Tethers is a sole-source cryptocurrency, pegged to the US dollar. There are others though not really at Tether's level. There is bitUSD on cryptocurrency called Bitshares. > Is this good news for Bitcoin? Oh this is great news for Bitcoin. Some more discussion on this topic here: https://news.ycombinator.com/item?id=15633852 To add to your post, there are some claims on the fact that it is not finex which has the h…

There are two types of divergences for Tether, and they each mean different things.

1. USDT > USD. This is the benign version. This signifies increased demand for Tether itself. This happens when there are arbitrage opportunities between exchanges that can only be exploited quickly using Tether. This is the variety that is most common, and exactly what Tether was intended to be used for.

2. USDT not be holding Tether. This means that the market views Tether as risky in some way, possibly implying insolvency. This has happened a few times, but is less common.

Understanding this is essential to interpreting Tether, price divergences, and also the nominal divergence between prices on different exchanges.

Re: Tether Critical Announcement

#162

Post by askmike »

Jasper_ wrote: post #115
askmike wrote: post #91

Earlier quoted context omitted.

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 legit…

> If they can't do that, remove the thing that says

This again, is related to their marketing and not actually to their solvency (red herring).

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

Lack of proof !== proof of insolvency.

And for all the other ones:

They are not entitled to tell you everything. The fact that choose not to is in NO way proof that they are insolvent.

I 100% agree that based on your list one might choose not to trust them. Just don't go screaming "they've basically been running a Ponzi scheme" with the only proof being them not telling you what you want to know about their operations.

Re: Tether Critical Announcement

#163

Post by Jasper_ »

csomar wrote: post #121
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…

Patrick, I thought you are better than making these "non-proved" claims. I can make claims about Bitstamp or Gdax too. Their order book has increased 10-15 times in value since bitcoin price was in the 1000-1200 range too. Tether certainly has a connection to Finex but they are not its biggest client. Tether is being used by crypto-only exchanges mainly Bittrex and Poloniex to give people the possibility to trade coi…

http://article78againstnydfs.com/docs/317-cv-01882-BitfinexC...

> I, J.L. van der Velde, hereby declare as follows:

> 1. I am the Chief Executive Officer for iFinex Inc. (“iFinex”), BFXNA Inc. (“BFXNA”), BFXWW Inc. (“BFXWW”), and Tether Limited (“Tether”). I have personal knowledge of the facts set forth below, and if called and sworn as a witness, I could and would testify competently thereto.

> 2. iFinex, through its subsidiaries BFXNA and BFXWW, owns and operates a leading global Virtual Currency platform called Bitfinex.

I don't know what else you need for a smoking gun. Tether and Bitfinex are the same thing.

Re: Tether Critical Announcement

#164

Post by runeks »

panarky wrote: post #65
cperciva wrote: post #29

Earlier quoted context omitted.

Post-script: Is this good news for Bitcoin? Oh this is great news for Bitcoin. If you don't believe Bitfinex's $600 million in liabilities are worth a copper shilling, the only option for getting your value out of Bitfinex is to swap your liability for Bitcoin, which drives up the price of Bitcoin at the margin. Correct me if I'm wrong here, but this seems to be an argument for BTC/USD going up on Bitfinex -- but not…

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.

You’re talking about two different markets. A Tether-USD is not the same as a USD. If anything, the fact that the irredeemable USDT even has value is a sign of the insanity playing out in the cryptocurrency market. A token worth 1 dollar but not really worth 1 dollar makes no sense at all.

Re: Tether Critical Announcement

#165

Post by iamthirsty »

mrb wrote: post #154
ActsJuvenile wrote: post #128

Earlier quoted context omitted.

Bitfinex got hacked for 119,756 BTC last year, and Tether got hacked for $30 mil today. Both are owned by iFinex LTD, and had the same CEO till earlier this year. Total amount they have lost comes out to $1 Billion. How are you still claiming "They may not be"?

Bitfinex already fully financially recovered from the 119k BTC theft by repurchasing the last of the BFX debt tokens a few months ago.

...with suspiciously issued Tethers, which is kinda the whole point here.

Re: Tether Critical Announcement

#166

Post by darawk »

askmike wrote: post #155
darawk wrote: post #138

Earlier quoted context omitted.

> 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 c…

> Read the post, man, very first paragraph: I've read it a few times now, still can't find where they say they specifically created tether (the system) for this exact purpose. Keep in mind that the issuance of tether is not the creation of the complete tether blockchain/system (they are issuing new tether around the clock). > That's true, except you probably have never tried to actually execute that kind of arbitrage…

> I've read it a few times now, still can't find where they say they specifically created tether (the system) for this exact purpose. Keep in mind that the issuance of tether is not the creation of the complete tether blockchain/system (they are issuing new tether around the clock).

> 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

Right there. patios11 claims that Bitfinex's "solution" to their wire problems was issuing Tether. That is demonstrably false, because Tether predates Bitfinex's wire issues by more than a year.

Re: Tether Critical Announcement

#167

Post by runeks »

polyomino wrote: post #113
iamthirsty wrote: post #100

Earlier quoted context omitted.

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

Tether won’t honor the tethers anyway

That’s not the issue. The issue is rendering the USDT useless because recipients don’t know if they’ve been paid with “actual” USDT or “fake” USDT.

Re: Tether Critical Announcement

#168

Post by modeless »

thisisit wrote: post #153
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…

> Tethers is a sole-source cryptocurrency, pegged to the US dollar. There are others though not really at Tether's level. There is bitUSD on cryptocurrency called Bitshares. > Is this good news for Bitcoin? Oh this is great news for Bitcoin. Some more discussion on this topic here: https://news.ycombinator.com/item?id=15633852 To add to your post, there are some claims on the fact that it is not finex which has the h…

> there is no market for BTC/USDT on Bitfinex as far as I can tell

You have it backwards. There is no BTC/USD market on Bitfinex. Their "BTC/USD" market is a BTC/Tether market. They have simply labeled it wrong to mislead people. USD cannot be deposited or withdrawn from Bitfinex, only Tether, and that makes their "USD" market a Tether market no matter what the ticker says.

It's really a brilliant scam, but it's only a matter of time before Tether is shut down for enabling money laundering, and Bitfinex with it. Banning US citizens may buy them a little time but it won't last forever. Bitfinex will be the next BTC-e, only worse. Not only is their volume higher than BTC-e, they may bring down Bittrex and Poloniex with them.

Re: Tether Critical Announcement

#169

Post by thisisit »

darawk wrote: post #161
thisisit wrote: post #153

Earlier quoted context omitted.

> Tethers is a sole-source cryptocurrency, pegged to the US dollar. There are others though not really at Tether's level. There is bitUSD on cryptocurrency called Bitshares. > Is this good news for Bitcoin? Oh this is great news for Bitcoin. Some more discussion on this topic here: https://news.ycombinator.com/item?id=15633852 To add to your post, there are some claims on the fact that it is not finex which has the h…

There are two types of divergences for Tether, and they each mean different things. 1. USDT > USD. This is the benign version. This signifies increased demand for Tether itself. This happens when there are arbitrage opportunities between exchanges that can only be exploited quickly using Tether. This is the variety that is most common, and exactly what Tether was intended to be used for. 2. USDT not be holding Tether…

Where's the proof on your claim?

From the looks of the chart here(if you need more clarity zoom from April to date): https://coinmarketcap.com/currencies/tether/#charts

It is you second but is less common, USDT < USD is what is happening more. Sure there are some spikes in the opposite direction.

Re: Tether Critical Announcement

#170

Post by shobith »

foxhop wrote: post #159
shobith wrote: post #156

Earlier quoted context omitted.

> We literally are mining coal to burn it in powerplants to energize servers and GPUS to waste clock cycles to find "coins". I'm curious to know what the carbon footprint of a human is, that way we can compare it to the GPUs doing an equivalent amount of work (which I think will be tricky to determine in the first place). > The world is the realm and how we use its people and resources matters, especially when its to…

Natural systems self renew. Mining coal to mine bitcoin isn't anywhere close. And the legacy systems from barter to bitcoin are all still around.

I agree, we should stop generating electricity using fossil fuels.

That said, I don't think it's right to just short the connection between "coal" and "bitcoin", we aren't mining coal to get bitcoins, it just so happens that majority of the electricity generated is through coal and mining uses electricity, so does our conversation on the internet.

> And the legacy systems from barter to bitcoin are all still around.

I'm not sure I get your point here. At some point, money of any form will be exchanged for goods or services.

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