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U.S. Launches Criminal Probe into Bitcoin Price Manipulation

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Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#51

Post by throwawaylolx »

sine wrote: post #5

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…

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-financial-data-r...

Reddit memes, medium posts with no research, and "correlation implies causation" assumptions does not make rumours true.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#52

Post by headsoup »

ploggingdev wrote: post #38
sine wrote: post #5

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…

What happened to the bitfinexed guy, he's gone silent on social media?

My first guess would be perhaps he is helping with the investigation...

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#53

Post by TangoTrotFox »

Retric wrote: post #15
TangoTrotFox wrote: post #13

Earlier quoted context omitted.

Decentralization does not mean owned by everybody, it means owned by nobody. For instance imagine we had a mine that was effectively infinitely large (for the sake of the analogy). If we allowed absolutely anybody with a pickaxe to to come in and mine it, we might call it decentralized. Nobody would own the mine. That one group sent a million miners to go mine it would not suddenly make them owners, even if they happ…

Due to centralization of hardware the Chinese government can trivially do a 51% attack. That's a form of centralization your ignoring due to an overly specific definition. The tiny block size is arguably an ongoing 51% attack from an oligarchy that is in collusion. Again, depending on what you consider centralization having a tiny group that's in direct communication easily qualifies. Pas: In your example if the only…

51% attacks are mostly overblown. If a group decides to engage in a 51% attack, all they are doing is effectively revoking their own license to print money - which is what having a > 51% mining capacity in a major crypto translates to. Bitcoin is a public ledger and double spend transactions would be completely visible to all. All this means is that the coin would end up getting forked, similar to what happened when Ethereum screwed up - and it continued on with minimal fanfare. And in that case their screw up was of their own fault instead of something inherent - even fewer people would be inclined to stay on a Bitcoin line that has been 51%'d.

Rolling with the mine analogy, a 51% attack is equivalent our group that sent in a million miners changing the diamond mine into a 'glass' one. It becomes fake, and loses nearly all of its value and people move to the new 'real' mine. You do nothing except critically hurt yourself.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#54

Post by TangoTrotFox »

Cthulhu_ wrote: post #33
bhouston wrote: post #10

Earlier quoted context omitted.

Central banks are in the business of market manipulation via interest rates, and money supply. This is to control growth and inflation so that business cycles are smoothed out to a degree.

Central banks are however beholden to national and international laws, governmental scrutiny, and the international financial market. Yes they can - and do - manipulate the markets on an unfathomable scale, but it's to enable and protect national and international economies, instead of optimising for quick wins and personal gain.

And it's a good thing that the international financial market and governments are not driven by self interest... Decisions like quantitative easing completely distort our economy and more importantly benefit a certain group of individuals and hurt another. To imagine that these considerations are put aside by those involved in these decisions is unreasonable.

I mean I don't understand the cognitive dissonance here. In nearly every action our government carries out we can see the behind the scenes motivations which tend to be appeal to special interests. And here you are straight faced arguing that because quantitative easing is done by government (and financial markets) it's somehow above the notion of quick wins and personal gain. This is illogical.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#55

Post by ufo »

dTal wrote: post #47
lambda wrote: post #25

Earlier quoted context omitted.

> Why creating Tethers from thin air is now a cause of concern? If you are claiming they are backed by USD, and you are creating them out of thin air, then that's a scam. Other coins are only valued based on how the market values them. There is no fraud there; you are not claiming that you will redeem them for something else, they just represent themselves and are valued based on how useful people find that particula…

>MtGox was also a scam by the end, since they were trading on their exchange bitcoins and USD that they didn't actually have for people to cash out. Heh. When a bitcoin exchange does it, it's a "scam". When a bank does it, it's "fractional reserve".

Banks that use fractional reserve should still have balanced assets and liabilities. It is just that some of their money is tied up in loans to be paid back instead of liquid cash. If everyone the bank loaned money to paid back there would be enough cash to allow all the customers to fully withdraw their accounts.

Bitfinex, on the other hand, is just outright insolvent.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#56

Post by jcfrei »

jasonmorton wrote: post #17

Here https://drive.google.com/file/d/0Bzu6iGPza2s9amFURTFzenRWVGg... are some slides from a talk I gave last year at Strata about what spoofing and layering is, and how a trading firm or exchange might detect or prevent them.

Thanks for sharing!

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#57

Post by kevingadd »

danharaj wrote: post #48
dTal wrote: post #47

Earlier quoted context omitted.

>MtGox was also a scam by the end, since they were trading on their exchange bitcoins and USD that they didn't actually have for people to cash out. Heh. When a bitcoin exchange does it, it's a "scam". When a bank does it, it's "fractional reserve".

Banks don't pretend that they're not fractional reserve.

Fractional reserve is also regulated and deposits are insured up to a certain amount, so it's definitely not comparable to printing imaginary USDT - even if fractional reserve banking has many well-known issues.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#58

Post by dTal »

ufo wrote: post #55
dTal wrote: post #47

Earlier quoted context omitted.

>MtGox was also a scam by the end, since they were trading on their exchange bitcoins and USD that they didn't actually have for people to cash out. Heh. When a bitcoin exchange does it, it's a "scam". When a bank does it, it's "fractional reserve".

Banks that use fractional reserve should still have balanced assets and liabilities. It is just that some of their money is tied up in loans to be paid back instead of liquid cash. If everyone the bank loaned money to paid back there would be enough cash to allow all the customers to fully withdraw their accounts. Bitfinex, on the other hand, is just outright insolvent.

Ah, so there is a difference. Thank you for clarifying.

I wish I had phrased my post as a question - as a statement it seems rather unpopular...

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#59

Post by lagadu »

throwawaylolx wrote: post #51
sine wrote: post #5

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…

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…

Well, right on tether.to they say, and I quote:

> Our reserve holdings are published daily and subject to frequent professional audits. All tethers in circulation always match our reserves.

They've been around for years and the grand total of independents audits is 0 (zero).

Sure, assumptions don't make rumors true but them flat-out lying about audits and transparency speaks louder than anything else and we're not even getting into how it took the Panama papers leak for the public to find out that several of the people in charge of Tether and the people in charge of Bitfinex being the same.

Re: U.S. Launches Criminal Probe into Bitcoin Price Manipulation

#60

Post by rtpg »

celticninja wrote: post #28
derivagral wrote: post #26

Earlier quoted context omitted.

Tether posits that it is worth ~$1/Tether, backed by some mechanism that the exchange hasn't revealed. If you create Tether like any other coin, you probably aren't also creating $1 to correlate.

the idea being that you create new tether when someone deposits the same amount of USD and when USD is withdrawn from the loop then so should the same amount of tethers. What I dont see happening is the removal of tethers when the USD flows out of the crypto space. Enough people have taken profits at this stage that surely some of those USD should have been used to pay out early investors in BTC, thus some tethers wo…

You don't need the withdrawal step in the current market

I buy BTC w/ USD Bitfinex prints USDT Bitfinex uses USDT to get BTC

In the end of this operation bitfinex has the USD and everyone else is satisfied. Normally Bitfinex needs to hold onto it to settle USDT claims, but so long as there's a USDT-usable market this might not be necessary

Even if USDT is at 50 cents to the dollar it's still a license to print money

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