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Tether Withdrawals Top $10B

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Re: Tether Withdrawals Top $10B

#411

Post by lmm »

askmike wrote: post #93
stephen_g wrote: post #50

Earlier quoted context omitted.

It could be those, but nobody outside knows whether any Tether was actually redeemed though. They are alleged to have insider connections with a bunch of different parties so they could just have burned Tether that had been created from nothing and lent out to an insider.

This really dips into conspiracy levels: Tether has many customers who can redeem USDT for real dollars. Many companies do this and are very open/vocal about this. Our company has done this as recent as late last week.

The last I heard no-one could name a single independent customer who had actually cashed out. Has that changed?

Re: Tether Withdrawals Top $10B

#412

Post by gkuan »

TuringNYC wrote: post #359
dragontamer wrote: post #269

Earlier quoted context omitted.

> What if the value of those assets is already below 1:1 because of recent market events? My long-term treasuries are down well over 10% this YTD, in case anyone wants to know. So if Tether had say, $50-billion in 10-to-30Y treasuries at the start of the year, they only have $45-billion of that now. There are serious market risks when you buy/sell Treasuries. Yes, they're among the safest instruments on the market, b…

>> So if Tether had say, $50-billion in 10-to-30Y treasuries at the start of the year, they only have $45-billion of that now. This is nuts - they dont and it wouldnt make any sense. You cant have a short term cash-equivalent backed with long-duration bonds. It would be a total asset-liability mismatch. For reference: T-bonds mature in 20 or 30 years and offer the highest interest payments bi-annually. T-notes mature…

This (more yield with longer duration) is true most of the time, but sometimes the yield curve inverts. Especially in recent months, the yield curve has flattened quite a bit.

Re: Tether Withdrawals Top $10B

#413

Post by selectodude »

logifail wrote: post #339
Symbiote wrote: post #305

Earlier quoted context omitted.

I used to have savings accounts with similar terms in the UK. They have a higher interest rate. https://www.moneysavingexpert.com/savings/savings-accounts-b...

Sure, I understand the general principle of locking up your investment for longer and [perhaps] getting better conditions, but the notice periods on those accounts aren't government-mandated, though?

Sort of - to the FDIC, the difference between a savings account and a checking account is that a checking account is a "demand deposit" account that historically didn't pay interest and a savings account is a "time deposit" that does. Capital One is telling you that this savings account is a time deposit to legally categorize it as different from a demand deposit so the FDIC treats them as two separate categories and gives them both the $250,000 deposit insurance. It's federal law that requires them to delineate the two.

Re: Tether Withdrawals Top $10B

#414

Post by lmm »

fleddr wrote: post #404
ProjectArcturis wrote: post #392

Earlier quoted context omitted.

So, for crime then.

Stupendous remark. I'm old enough to have lived in a cash society. We got paid in cash and paid for things in cash. You can send cash to others. Without a cap. We didn't own some government an explanation on what we do with our money, as it's none of their damn business. "Guilty by default, prove me that you're not" is to be rejected. Society had less crime not more. Moreover, things like capital controls do nothing…

> Society had less crime not more.

Citation needed, at least if you're defining crime in the sense of what's experienced by regular people. Being a victim of violence was much more likely in those days, and the fact that you could easily spend the money of someone you mugged was a significant factor in that.

> Moreover, things like capital controls do nothing at all. Criminals with half a brain are quite obviously going to work around publicly known limitations.

The point isn't to eliminate it entirely but to make it more costly, and in that regard they seem to have been quite successful.

Re: Tether Withdrawals Top $10B

#415

Post by lmm »

SparkyMcUnicorn wrote: post #293
ceejayoz wrote: post #232

Earlier quoted context omitted.

My Dad sends me money via Zelle. It shows up instantly in my account, with zero fees, even if it's 10pm on a Sunday. https://mashable.com/article/ethereum-gas-fees-skyrocket-bor... > If you were trying to complete a transaction on the Ethereum network last night, you might have been taken aback by the ridiculously high gas fees you saw. For example, one user purchased a $25 NFT on Saturday evening. Their total price?…

Zelle has strict limits on how many transactions you can do and how much you can transfer. Yeah, ETH has high fees. Don't use it directly. Use an L2, Polygon, or something else where fees are pennies or less. ETH is not a good chain to be on for the average user, unless you have a lot of money to waste on gas.

Those "L2s" are the same kind of entity as something like Zelle, and equally able to exercise controls on what kind of transactions you can do and for how much.

Re: Tether Withdrawals Top $10B

#416

Post by function_seven »

jakelazaroff wrote: post #403
function_seven wrote: post #375

Earlier quoted context omitted.

Why not have a step between #1 and #2? "Tether immediately sells the BTC for $10" There's still some risk if the price is rapidly moving and they can only get $9.99 for the BTC you sent them, but that could be mitigated by ordering the transactions to keep the peg: you send $10 of BTC, they sell it (and "only" get $9.99), they give you 9.99 USDT and say, "tough, what you thought was $10/BTC was really $9.99/BTC"

> Why not have a step between #1 and #2? "Tether immediately sells the BTC for $10" Yes, why indeed? That's a great question for Tether! If they were holding enough actual cash reserves to cover all the USDT in circulation, there wouldn't be an issue.

My apologies, I was talking about a hypothetical true stablecoin not whatever Tether is.

Re: Tether Withdrawals Top $10B

#417

Post by Jensson »

LatteLazy wrote: post #354
ncallaway wrote: post #315

Earlier quoted context omitted.

> I think people fail to notice how similar a (non-fraud) tether model is to a traditional bank That’s exactly what’s unethical about it. They’re operating a bank, but have skipped all the regulations and oversight that banks operate with. I have no issue with Tether operating a fractional reserve deposit system, if they are subject to the same oversight (and insurance) that banks are subject to.

The reason banks are regulated is the risk of contagion and the risk of short term drops in markets making them illiquid or shallow so banks can't meet their commitments. But tether has no risk of contagion to a bank does it? And markets have never been more stable or deep or liquid. So the case for regulation here is weak. Again. I don't actually know if tether is a giant fraud, or how much actual business case ther…

Banks are regulated to protect your money from the bank stealing them. Before those regulations keeping your money in a bank was riskier than keeping it at home. That same situation now plays out with crypto, the crypto bankers create banks with high risk investments that nets them huge profits, but that will easily fold to market fluctuations. But them folding doesn't matter to them, they still keep all the profits generated before them, while you the guy who put your money in the crypto is the big loser.

Re: Tether Withdrawals Top $10B

#418

Post by viraptor »

LatteLazy wrote: post #261
jcranmer wrote: post #256

Earlier quoted context omitted.

> What if the value of those assets is already below 1:1 because of recent market events? The statistics you're bringing up are as of March 31. Do note that 6% of reserves are in "Other Investments (including digital tokens)", and Bitcoin (as a proxy for all cryptocurrencies) is down ~30% since then, so that's at least 2% of their assets that have been wiped out by market conditions. Keep in mind that said report als…

They only need to have made 2% on those other investments and the 2% lost on crypto is irrelevant. Also, if 2% of outstanding tether has been lost (forgotten wallet keys etc) then those can never be redeemed and again, tether wins. Inflation is another factor worth considering here: tethers deposits are deminishing but it's investments are (or should be) shielded. I think people fail to notice how similar a (non-frau…

> They only need to have made 2% on those other investments

Made, realised and not spent/withdrawn by them. The required assumption here is that the pool of money behind tether grows / is reinvested. But given they only need to keep 1:1 (assuming even that is true) the investment profits may have been exchanged for hookers and blow for all we know.

Re: Tether Withdrawals Top $10B

#419

Post by dragontamer »

tyrfing wrote: post #283
dragontamer wrote: post #269

Earlier quoted context omitted.

> What if the value of those assets is already below 1:1 because of recent market events? My long-term treasuries are down well over 10% this YTD, in case anyone wants to know. So if Tether had say, $50-billion in 10-to-30Y treasuries at the start of the year, they only have $45-billion of that now. There are serious market risks when you buy/sell Treasuries. Yes, they're among the safest instruments on the market, b…

> So if Tether had say, $50-billion in 10-to-30Y treasuries at the start of the year, they only have $45-billion of that now. They don't. As stated at the link: > U.S. treasury bills comprises U.S. treasury bills with a maturity of less than 120 days.

Except USDT doesn't have any audits or proof of their reserves.

My overall point is that USDT could very well be buying up dollar-backed securities, such as 30-year treasuries, and yet still lose a ton of money if the market moves under them. Unless Tether allows 3rd party audits of their reserves, I don't think its necessarily safe to assume that they actually hold those reserves.

Re: Tether Withdrawals Top $10B

#420

Post by SparkyMcUnicorn »

postalrat wrote: post #346
SparkyMcUnicorn wrote: post #293

Earlier quoted context omitted.

Zelle has strict limits on how many transactions you can do and how much you can transfer. Yeah, ETH has high fees. Don't use it directly. Use an L2, Polygon, or something else where fees are pennies or less. ETH is not a good chain to be on for the average user, unless you have a lot of money to waste on gas.

So don't use ethereum because the fees are too high?

Yes
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