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Tether Critical Announcement

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Re: Tether Critical Announcement

#51

Post by Jasper_ »

askmike wrote: post #32
empath75 wrote: post #5

Earlier quoted context omitted.

$600 million in fake dollars? Amazing that they've gotten away with it for that long.

They are not fake, they have all of them. People from the US just can't access them anymore. Tether is the workaround so they can. To add to the excellent summary of patio11: The other side of the coin is that more and more exchanges are using Tether (USDT) as the only thing pegged to the FIAT world in any way (value wise), not having to deal with actual dollars and banks makes the legal side of running an exchange a…

Who gave them all that USD? Where are they keeping it? They've been shunned by their US banking partners. They've basically been printing Tethers 50m at a time. The only thing they've released which attempted to show that they actually had the USD was something they called an "audit" which explicitly said "this is not an audit" [0] on the second page.

When you go to withdraw from Tethers it basically says "if you don't have more than $50k in claims, go away" [1]. Suffice it to say that most of their customers don't have that.

My guess is that Bitfinex, through a combination of wash trading and Tethers, have been pushing up the price of Bitcoin and they've basically been running a Ponzi scheme.

[0] https://tether.to/wp-content/uploads/2017/09/Final-Tether-Co... -- "This engagement does not comtemplate tests of accounting records or the performance of other procedures performed in an audit or attest engagement"

[1] https://cdn-images-1.medium.com/max/800/1*7BOwdYvUycjNFdUB2e...

Re: Tether Critical Announcement

#53

Post by an_account »

MichaelGG wrote: post #47
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…

This also illustrates the absurdity of so called "money laundering". Just moving money around between private parties is somehow a serious crime. Hint: It's not. Money laundering is just a cheat code for prosecutors to get easy points when they can't actually find real wrongdoing. The funny part is that Tethers came into being after Bitfinex was hacked, right, as a way to help them out? Sometimes we say after someone…

As you said, moving money isn’t money laundering. No prosecuter is getting a conviction from people moving money.

Re: Tether Critical Announcement

#54

Post by nikolay »

Bitcoin is crooks' playground! Inside theft, hacks, and everything possible happens as there are enough idiots who hodl and who keep buying at any price in hopes to become millionaires overnight.

Re: Tether Critical Announcement

#55

Post by panarky »

askmike wrote: post #37
stale2002 wrote: post #33

Earlier quoted context omitted.

Well, it is "supposedly" backed up by USD. A whole bunch of people have been questioning whether they ACTUALLY have that money, very recently, and surprise surprise, there just 'happens' to be a hack that happens right now.

Not sure if "a whole bunch of people" equates more than 5 extremely vocal people on twitter and reddit. Tether published an audit a month ago.

It's time for a new kind of bank - a transparent bank.

Exchanges could publish a daily report of their bank account balances for each currency along with a daily message signed by each cold-storage key.

And the transparent bank would publish a daily record of balances for each account, which ties out to the bank's balance sheet.

We wouldn't need to rely on historical audits, because we could do our own automated audit every day.

Transparent exchanges with transparent bank accounts would attract funds away from secretive exchanges with secret bank accounts.

Re: Tether Critical Announcement

#56

Post by bousaid »

patio11 wrote: post #23
bousaid wrote: post #20

Earlier quoted context omitted.

Could you go into more detail on what happened to Mt. Gox during final months?

I suppose I could: https://news.ycombinator.com/item?id=7304479 The short version: Mt. Gox stopped paying out USD-denominated claims, because (as was correctly perceived by many people) they were insolvent. They continued paying out BTC-denominated claims. The only way to get value out of Mt. Gox was to either go through yen (which the vast majority of customers couldn't do [0]) or buy Bitcoin and withdraw, which cau…

Thank you.

Re: Tether Critical Announcement

#57

Post by chrisco255 »

matt_wulfeck wrote: post #50
unabridged wrote: post #43

Tether is handling this completely wrong. They should not hard fork Omni and force everyone to blacklist addresses. Instead, tell everyone to halt on-chain trading, take a snapshot of the chain, then create a new tether token and send them to everyone holding the old tethers (minus the thief). I think the bitcoins Tether would have to pay in transfer fees would be a fitting punishment for their poor security.

You can't just keep hard forking even time something had happens. The problem is inherit to digital assets: they can be hacked.

Banks can be robbed, museums can be swindled, even credit bureaus like Equifax can get hacked. There's no such thing as hack-proof. That some cryptos will hard fork and adjust shows that the system can heal itself and not be in a permanent state of disrepair. That's not a bad thing at all.

Re: Tether Critical Announcement

#58

Post by sanxiyn »

rtpg wrote: post #40
polyomino wrote: post #38

Earlier quoted context omitted.

This is much easier to unwind than Mt. Gox since tether is only redeemable through the tether company. Participating exchanges have to upgrade their omni/tether clients or they run the risk of accepting the unredeemable tethers for which their customers will hold them liable. Omni's design allows tether to track all the disavowed tethers so there's no risk of payout to addresses downstream of this one.

has anyone checked to see if this money has already spread to downstream addresses? It's possible the damage is already done and exchanges have accepted money from the poisoned address.

Check yourself. It has not moved yet: http://omniexplorer.info/lookupadd.aspx?address=16tg2RJuEPtZ...

Re: Tether Critical Announcement

#60

Post by zeven7 »

unabridged wrote: post #43

Tether is handling this completely wrong. They should not hard fork Omni and force everyone to blacklist addresses. Instead, tell everyone to halt on-chain trading, take a snapshot of the chain, then create a new tether token and send them to everyone holding the old tethers (minus the thief). I think the bitcoins Tether would have to pay in transfer fees would be a fitting punishment for their poor security.

That is a fantastic idea.
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