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U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

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Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#321

Post by rspeer »

darawk wrote: post #134
spookthesunset wrote: post #105

Earlier quoted context omitted.

> You can exchange USDT for fiat, on demand, for exactly 1 USD/USDT, but only at Bitfinex My understanding is this isn't the case. My understanding is Bitfinex will take your USD and convert to USDT which you can then use to buy crypto. But it won't take your USDT and turn it back into dollars. In fact, my understanding is the only way to turn USDT back into USD is either directly through Kraken or indirectly through…

No, you can convert USDT directly to USD. However, Bitfinex can only wire you that USD to a Taiwanese bank account. I can't verify that they actually will wire it, but this is what they claim. And I assume if they were refusing to make these wires to people who had Taiwanese bank accounts, people would be pointing it out.

Nobody has ever redeemed a Tether [1], and there are a lot of people pointing that out.

[1] If you're a green-name who's skimmed up to here and you're about to say "but Kraken", I am not talking about selling Tether to someone else.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#322

Post by trevorcreech »

api wrote: post #316
simonebrunozzi wrote: post #249

Earlier quoted context omitted.

Follow the trail related to Bitfinex's CFO (in the Panama papers, and elsewhere). Pretty interesting findings.

Got a good link? This stuff is interesting.

You can search the Panama Papers here: https://offshoreleaks.icij.org

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#323

Post by kasey_junk »

andrewla wrote: post #309
spookthesunset wrote: post #243

Earlier quoted context omitted.

> Also, when you deposit your USD in Chase Bank, you don't have USD, you have "Chase USD credits" which you can withdraw, subject to their limitations, on demand. No, I have USD in my account when I deposit to Chase. I can go to Chase and say "give me my fucking money" and they'll give me sweet cold, hard dirty fiat dollars with, in general, no questions asked. I deposited in dollars, my account balance is denoted in…

You try it - try to get more than 10,000 USD cash out of your bank, and then tell me how sweet that fiat money is (much less doing this without any questions asked). This is not to send out the ridiculous trope of “fractional reserve banking is a fraud” or anything; Chase, for the moment, is solvent, and recent events have made it clear that the Federal Reserve will sooner barbecue children than let a bank customer n…

I have no opinion about the soap opera of crypto currencies but the implication that it is hard to get more than 10k in cash from a bank is ludicrous.

I’ve gotten more than that out of a credit union located in the basement of a grocery store using literally the exact same form that is use to exchange coins for bills and taking less time.

Maybe the assertion is you can’t do it without an irs notice from the bank? Sure but you can easily get the cash.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#324

Post by mancerayder »

zik wrote: post #304
mancerayder wrote: post #277

What bothers me more than anything in this isn't the existence of Tether and the suspicious behavior of Tether/Bitfinex players... It's that Bittrex and others are attempting to become mainstream and they've accepted these USDT since forever, and they continue to accept them well after the suspicions were public. This is a black stain on the exchanges. It also personally makes me cynical of the entire space. I moved…

Don't ever keep coins on an exchange. Use a hardware wallet. If you don't have them in your possession they're not really your coins and you can get "Goxed" - ie. the world's largest exchange at the time, Mt Gox, disappeared with most of the user funds.

Yes, all reasonable paranoia. However I do trust Coinbase/GDAX as far as BTC, ETH LTC are concerned.

It's a pain to store a few K USD worth of altcoins in my hw wallet (which I'm not even sure supports most of them). What if I'm at work and an event happens that makes me want to sell? The wallet requires an app to be installed.

If there's a hint of an issue with Bittrex, I'll trade to ETH and move them to GDAX.

Am I being a fool here?

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#325

Post by Nition »

rajacombinator wrote: post #318
Nition wrote: post #284

Earlier quoted context omitted.

It's ridiculous; surely they could have made tons of money with USDT legally if they'd just been less greedy: - Create Tether out of thin air - Sell it to people for $1USD each - Put that USD in a bank account to earn interest Hell, there's probably still an opening for someone else to do it right. - Create MyTetheredCrypto out of thin air - Convince people & exchanges to accept it ??? - Sell it for $1USD each - Unli…

Why would anyone buy your tethers with usd?

It sounds like exchanges are using Tether because offering to cash out USD can be difficult if the exchange isn't in the US, so they let people use Tether as a proxy USD. e.g. If someone thinks the market's about to crash, they can sell their Bitcoin for Tether, then buy back Bitcoin when the price drops.

So if your coin has the same use case as Tether does now, people may not buy MyTetheredCrypto off you directly for USD, but they might buy it off you for Bitcoin or other cryptocurrencies you accept if it's not easy for them to convert to USD. Then you sell those coins immediately for their value in USD (you presumably having more access to do this than the buyer does) so you have your USD-backed tethered cryptocurrency with every MyTetheredCrypto backed by a real dollar USD.

Obviously I'm not really suggesting all this seriously though, there are lots of potential problems all over it.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#326

Post by mancerayder »

demosthenes111 wrote: post #141
bhouston wrote: post #130

How long until USDT is delisted from most other exchanges? I wonder which is the larger risk, USDT coming unpegged, or just straight out being delisted from nearly all exchanges?

Delisting is probably the best case scenario imo. If the dung hits the fan with Tether while many exchanges are based on it, it could be a very bad thing for the entire cryptocurrency market. I could definitely see that scenario causing a massive "bank run" where many people try to pull their money out at the same time and several major exchanges go insolvent, resulting in mtgox style loss of confidence in cryptocurr…

As per my other comment above, I find it infuriating that they didn't delist Tether months ago. The printing of Tether, so to speak, is absolutely a spiraling problem. There is a qualitative easing inflationary quality to the entire crypto marketplace so long as it is allowed. It's a huge disappointment that that thing wasn't yanked late 2017 from all half-respectable exchanges.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#327

Post by ceejayoz »

blibble wrote: post #282
jandrese wrote: post #75

Earlier quoted context omitted.

I'm guessing the auditors weren't happy with "out of thin air" when they asked where the the backing currency came from. The Tether folks were like "Our balance sheet is really simple! We just add numbers to this column until it evens out, what's the problem?!?" and the auditors are like "that's just fraud".

that's more or less what happens when you go and get a loan or a mortgage from the bank

Banks can repossess your property if you don't pay. If you're not putting in much money as a down payment, they'll also force you to pay for insurance (PMI) on the mortgage.

They're also not promising otherwise and claiming to be regularly audited while firing/being fired by their auditor.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#328

Post by Feniks »

rspeer wrote: post #317
dfgin wrote: post #311

Earlier quoted context omitted.

Isn't this kinda similar to the fractional banking system we have already?

Do you want Tether to be audited and regulated like the fractional reserves of a bank? I'd sure find it entertaining while it lasts. This is also moving the goalposts, because they claim that Tether is fully backed, not fractionally. Changing their story there would involve admitting to a billion-plus-dollar fraud.

Fully backed, has anyone been able to independently audit their reserves?

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#329

Post by dingo_bat »

Feniks wrote: post #328
rspeer wrote: post #317

Earlier quoted context omitted.

Do you want Tether to be audited and regulated like the fractional reserves of a bank? I'd sure find it entertaining while it lasts. This is also moving the goalposts, because they claim that Tether is fully backed, not fractionally. Changing their story there would involve admitting to a billion-plus-dollar fraud.

Fully backed, has anyone been able to independently audit their reserves?

They've said an audit is coming for months now.

Re: U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether

#330

Post by scott_karana »

mancerayder wrote: post #324
zik wrote: post #304

Earlier quoted context omitted.

Don't ever keep coins on an exchange. Use a hardware wallet. If you don't have them in your possession they're not really your coins and you can get "Goxed" - ie. the world's largest exchange at the time, Mt Gox, disappeared with most of the user funds.

Yes, all reasonable paranoia. However I do trust Coinbase/GDAX as far as BTC, ETH LTC are concerned. It's a pain to store a few K USD worth of altcoins in my hw wallet (which I'm not even sure supports most of them). What if I'm at work and an event happens that makes me want to sell? The wallet requires an app to be installed. If there's a hint of an issue with Bittrex, I'll trade to ETH and move them to GDAX. Am I…

You are being a fool. Exchanges have been known to close, be seized, and be stolen from, without warning.

Cryptocurrency frees you from needing to trust central banks/exchanges... so why continue to trust them? Especially un(der)regulated ones?!

At best, store only the smallest amount you're willing to lose, so you retain some liquidity for sudden trades...

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