$1M bounty for details on Tether’s backing • Hacker News Board

Re: $1M bounty for details on Tether’s backing

#201

Post by [deleted] » Tue, Oct 19, 2021, 11:23 PM UTC

chunky1994 wrote: post #169

legutierr wrote: post #92

Earlier quoted context omitted.

There is one scenario in which the 70 billion was at one time made-up money, but where it won't ever actually tank the crypto market: 1. Tether prints $1 billion with no backing. 2. Tether buys $1 billion of Bitcoin with the the fraudulent tokens. 3. Bitcoin triples in price. 4. Tether sells 1/3 of their position in exchange for hard currency, and holds that money in their reserves. 5. Tether now has 100% reserves ba…

It really can't happen this way. Between 3 and 4, you'd tank bitcoin's value significantly (assuming $1B is able to triple bitcoin's market value). Any sizeable liquidation of bitcoin at an inflated price is going to affect the price heavily and so now you no longer have 100% backing. (This of course depends on how elastic BTC/USDT price is)

[deleted]

Re: $1M bounty for details on Tether’s backing

#202

Post by hackingforfun » Tue, Oct 19, 2021, 11:24 PM UTC

qeternity wrote: post #161

seibelj wrote: post #133

Earlier quoted context omitted.

The price of Bitcoin would rise precipitously as traders tried to exit tether any way possible, as would all other cryptos.

No, the price in USDT would rise and then as people promptly sold for USD it would collapse in USD terms.

What guarantees that everyone would sell that Bitcoin for USD?

Re: $1M bounty for details on Tether’s backing

#203

Post by VHRanger » Tue, Oct 19, 2021, 11:26 PM UTC

hmate9 wrote: post #109

ur-whale wrote: post #102

Earlier quoted context omitted.

Given how deep FTX is into USDT, it's rather unlikely they'd survive a Tether implosion, and your short position will there will evaporate in a puff of smoke.

What do you mean FTX is deep in USDT?

They (through Alameda) issued about a third of all USDT, ever

Re: $1M bounty for details on Tether’s backing

#204

Post by hackingforfun » Tue, Oct 19, 2021, 11:26 PM UTC

qeternity wrote: post #163

JumpCrisscross wrote: post #65

Earlier quoted context omitted.

It's marketing. When Hindenburg publishes equity research, the disclosure is "you should assume that as of the publication date of any short-biased report or letter, Hindenburg Research...has a short position in all stocks (and/or options of the stock) covered herein, and therefore stands to realize significant gains in the event that the price of any stock covered herein declines." [1] https://hindenburgresearch.com…

Precisely. It's too risky to actually short the crypto complex because if the Tether fraud is true, then they can pump it to $100k or $1m or whatever they want. But if they contribute to the unwind of a fraud of this scale, they will go down as heroes.

If people aren't buying as much Bitcoin at $100k+ (I assume you are referring to Bitcoin), then what will cause it to go to $1m? I don't think they can have a guaranteed pump like you are saying.

Re: $1M bounty for details on Tether’s backing

#205

Post by jfrunyon » Tue, Oct 19, 2021, 11:27 PM UTC

ygjb wrote: post #85

skybrian wrote: post #32

Earlier quoted context omitted.

There are firms that look for good opportunities to short stocks. Find some credible bad news, short the stock, then publicize the bad news. If the news is actually true, this might even be considered a public service (as well as obviously a way to make money). They probably wouldn’t do until they actually got a tip. Also, they might short crypto-related stocks if that’s easier.

I am curious about how that type of activity doesn't constitute insider trading? Presumably having "bad news" would constitute material nonpublic information?

Because it's not nonpublic information. It's public information that no one else had put together the pieces on, yet.

(Contrary to some of the other commenters, you don't have to be an insider yourself to run afoul of the law. If the information is not public and you got someone to leak it to you, for example. https://www.investor.gov/introduction-investing/investing-ba...)

Re: $1M bounty for details on Tether’s backing

#206

Post by throwaway6734 » Tue, Oct 19, 2021, 11:27 PM UTC

chunky1994 wrote: post #169

legutierr wrote: post #92

Earlier quoted context omitted.

There is one scenario in which the 70 billion was at one time made-up money, but where it won't ever actually tank the crypto market: 1. Tether prints $1 billion with no backing. 2. Tether buys $1 billion of Bitcoin with the the fraudulent tokens. 3. Bitcoin triples in price. 4. Tether sells 1/3 of their position in exchange for hard currency, and holds that money in their reserves. 5. Tether now has 100% reserves ba…

It really can't happen this way. Between 3 and 4, you'd tank bitcoin's value significantly (assuming $1B is able to triple bitcoin's market value). Any sizeable liquidation of bitcoin at an inflated price is going to affect the price heavily and so now you no longer have 100% backing. (This of course depends on how elastic BTC/USDT price is)

Why would it necessarily tank the price? Using tether to pump the price attracts new investors, and if the rally starts to slow, they can just print more

Re: $1M bounty for details on Tether’s backing

#207

Post by bduerst » Tue, Oct 19, 2021, 11:27 PM UTC

PKop wrote: post #138

omgwtfbyobbq wrote: post #28

Earlier quoted context omitted.

Why do you think it would tank the equity market?

It's all tied together. If one asset class is crashing people sell others to grab cash. Another way, according to Janet Yellen, that Tether and other stables can destabalize markets, is that they have large portions of reserves in corporate debt, a crisis in these coins would cause a fire sale of billions of corporate debt they hold, itself probably cascading into all risk markets.

Crypto markets maybe, but not main indexes. Experienced financial players smell tether for the scam it is and don't touch it, or I'd they do, they're in on the grift.

Laymen who bought the hype stand to lose a lot though.

Re: $1M bounty for details on Tether’s backing

#208

Post by rvz » Tue, Oct 19, 2021, 11:29 PM UTC

garyclarke27 wrote: post #182

Tether is obviously not backed 1:1 by USD as previously claimed. Now the dodgy piechart informs us that it is backed mainly by corporate bonds and loans - if true I would guess mostly to related companies. A recent Bloomberg article says they have been lending Billions to Chinese property companies! Eventually enough of the gullible fools will realise that the Emperor has no clothes, then there will be a run on Tethe…

Correct. Tether is a giant scam as I and many others have said before: [0]

Won't be surprised to see the scam finally unveiled and to cause a seismic crash in the crypto markets.

I would start packing my crypto holdings out of the market real soon™... Things are getting quite, unstable and euphoric once again.

[0] https://news.ycombinator.com/item?id=27960613

Re: $1M bounty for details on Tether’s backing

#209

Post by smoyer » Tue, Oct 19, 2021, 11:31 PM UTC

Given the way this is worded and the fact that many crypto fans are also "highly technical", does anyone else feel like this is a request to compromise the Tether organization's infrastructure?

Re: $1M bounty for details on Tether’s backing

#210

Post by IAmGraydon » Tue, Oct 19, 2021, 11:31 PM UTC

filvdg wrote: post #4

Disclosure: Hindenburg Research does not hold positions, either long or short, in Tether, bitcoin or any cryptocurrency at the time of this press release.

Perhaps they’re holding long put contracts on the Bitcoin ETF that just started trading. Their disclosure would still be true as they own contracts, not shares. An interesting coincidence with the timing.