191–200 of 228 posts
I was surprised to read that the US regulators feel they have jurisdiction to regulate bitcoin transactions. How can this be - is it just because there are BTC futures now?
How could they possibly not have jurisdiction when a large percentage of bitcoin traders and several large exchanges are in the US?
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No, not necessarily. Ponzi schemes can survive redemptions for years or even decades; they blow up when there's finally a run.
You're confusing a Ponzi scheme and fractional reserve. Two very different systems.
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If there was a problem redeeming Tether for USD, you'd expect that the market price distortion of Tether. But it hasn't[1] https://www.tradingview.com/chart/?symbol=POLONIEX:USDTUSD >they've created 2.8 BILLION USDT Absolute numbers are meaningless and less eye catching when they're compared to the entire market. 2.8 ~ ~ Billion ~ ~ USDT is only 0.5%-0.8% of the market. Do you really think that a 300-500 billion doll…
The mechanics are probably this: suppose someone goes to Bitfinex to redeem 10million USDT into USD. Since Bitfinex is behaving fraudulently, they don't actually have the 10million USD they promised they would hold to back the USDT. But they do have the ability to issue new unbacked USDT. So they issue 11million unbacked USDT and use it to buy bitcoin. They sell the bitcoin for 10million USD on one of the exchanges t…
Who is selling them BTC for USDT apart from a few daytraders? Where is the sink of 2.8 billion USDT?
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My understanding is that there was a confusing UI where people who intended to sell bitcoin for USD actually selected USDT by default. And one reason they might hold them is because they can't figure out how to exchange them for USD. I mean, I'm sure there must be some people who bought USDT when that was their intention, but there are also a bunch who bought it by accident.
But you can easily buy BTC using USDT and then sell the BTC somewhere for real USD. Where are the reports of people stuck with USDT?
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Completely fraudulent?
Nobody outside of tether really knows until there's some sort of audit. But the secrecy, false claims of regular auditing etc. don't look good from here.
Friedman only gave a report explicitly specifying "THIS IS NOT AN AUDIT" because Bitfinex wouldn't provide the documents and access beyond simple statements.
Friedman LLP recently removed all mention of ever having been involved with Bitfinex from their webpage.
Previously visible here:
http://www.friedmanllp.com/insights/auditor-engagement
The Bloomberg article states that Friedman was issued a subpoena from the CFTC, at the same time Bitfinex was subpoenaed.
Friedman LLP, a New York-based auditing firm, was also
subpoenaed by the CFTC after Tether hired it last year to
assess claims that Tether held enough U.S. dollars,
according to a person familiar with the matter.Earlier quoted context omitted.
No, it's unlikely if Tether was legitimate USDT printing would correlate so closely with bitcoin (crypto) market downturns. The reason being, assuming tether is legitimate, for every printing they are sourcing additional USD to back the newly minted USDT. The idea they could so consistently find large investors willing to make NEW 100M+ investments while the crypto markets were in free fall is unlikely to say the lea…
This is inaccurate. Tether demand INCREASES when the cryptomarkets crash because traders want to escape to non-volatile assets. If everyone converts their crypto to USDT at the same time (which is what happens during big crashes) they MUST print more Tether or the price will increase.
Plus, Tether's offical website and documentation state that's not how Tether is intended, they claim it is always 1:1 backed by a real USD reserve in a bank account (which they tell people they will audit, but the auditor backed out after giving a statement that said Bitfinex would not provide the proper documentation and access, later erasing any mention of having been associated with Bitfinex.)
For anyone who hasn't been following, the prevailing theory is that the largest Cryptocoin exchange "Bitfinex" also runs an altcoin called "Teather" which was marketed as being backed 1:1 by USD. So far they've created 2.8 BILLION USDT and coincidently the times they create millions of these happens to be in the middle of extreme market crashes. See this chart: https://i.imgur.com/Uo07d1d.jpg More details here: https…
If there was a problem redeeming Tether for USD, you'd expect that the market price distortion of Tether. But it hasn't[1] https://www.tradingview.com/chart/?symbol=POLONIEX:USDTUSD >they've created 2.8 BILLION USDT Absolute numbers are meaningless and less eye catching when they're compared to the entire market. 2.8 ~ ~ Billion ~ ~ USDT is only 0.5%-0.8% of the market. Do you really think that a 300-500 billion doll…
It doesn't mean that you have assets that all total up to be a fraction of your liabilities. You're severely misunderstanding what fractional reserve means.
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They mint Tether during market crashes because that's when there is the highest volume on USDT pairs, and when Tether needs to create tokens to maintain the exchange rate around $1. Have you read their whitepaper? Further, there is more proof that Tether has the funding to back up the USDT than proof that Tether does not have the funds: https://blog.bitmex.com/tether/ https://blog.bitmex.com/tether-addendum-new-finan…
> there is more proof that Tether has the funding to back up the USDT than proof that Tether does not have the funds There is no way Bitfinex has $2.2 billion in bank accounts. If a bank handles U.S. dollars, they are under U.S. jurisdiction. Bitfinex cannot show who own Tether; that makes beneficial ownership tracing, rules surrounding which became stronger twelve days ago, impossible. Had they picked any other curr…
What grates my nerves isn't primarily Bitfinex/Tether, it's the other exchanges. Why did they accept Tether? Of all the 'altcoins', one backed by an asset like cash is the easiest to verify (or be skeptical of if verification requests are dismissed or ignored). When I signed onto Bittrex, USDT was one of the prominent trading pairs. It was a useful trading pair, because instead of seeing numbers like ".000000314121 :…
Also I imagine that major exchanges could get discounts on volume USDT purchases - this would allow them to paper over their own cash shortfalls in exchange for lending legitimacy to the scheme.
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What principle is not being universally applied? Or do I misunderstand?
Many of the ostensible characteristics of Bitcoin you've provided also apply to special-edition 1990s Marvel comics. The idea that a good needs to be "divisible" to be valuable is nowhere supported by evidence and easily rebutted by counterexample. Your argument is essentially handwaving: all sorts of terrible investments are "great for people with low time preference", in that they will have no value in the immediac…
Also your tendency to define things in binary terms (liquid/illiquid, value/no value) is troubling.
Why the struggle to pretend not to be able to tell the difference between Bitcoin and limited edition comic books?