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> 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 custome

> 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. This is not how most people redeem tether, they go to any of a wide range of exchanges (kraken, poloniex, bittrex, etc) and trade whatever amount (from a dollar or whatever the minimum trade amount is).

Jasper_ 9y ago
How does that prove that Tethers has USD to back each USDT? If it's all exchange-based then there's no guarantee of a peg to USD.
- askmike 9y ago
  I 100% agree with you how risky it is and how hard to prove this is for bfx. It's very dangerous and there is a lot of money on the line (not just the tethers themselves, USDT reaches for and beyond bfx). However I don't think it's obvious that this thing will implode, based on the information we have we can only speculate. Pointing to screenshots about being unable to withtdraw tethers is a red herring and has nothing to do with whether tether will implode.
  - Jasper_ 9y ago
    It's not hard at all. There's a few, very basic things that would change my tone: 1) Let users exchange USDT for USD no matter the denomination or status. If they can't do that, remove the thing that says "You always have 24/7 access to our balance" from the website marketing. 2) Release an official audit (that doesn't say "this is not an audit") 3) Explain the large amounts of Tethers being minted. If they are legitimate, who is pumping $100m into Tethers almost every 3 days? No need to be specific, but records would be nice. 4) Tell us who their banking partners are that are holding the USD. 5) Put their transparency page back up [0]. Bonus points if they actually keep the "Shareholder Equity" number negative in the interest of transparency, or explain why it might have gone negative. [0] Compare: https://archive.is/6os3c https://archive.is/6os3c https://wallet.tether.to/transparency https://wallet.tether.to/transparency The fact that they haven't done any of these heavily imply to me that Bitfinex and Tethers are a sham operation.
    - askmike 9y ago
      > If they can't do that, remove the thing that says This again, is related to their marketing and not actually to their solvency (red herring). > Release an official audit (that doesn't say "this is not an audit") Lack of proof !== proof of insolvency. And for all the other ones: They are not entitled to tell you everything. The fact that choose not to is in NO way proof that they are insolvent. I 100% agree that based on your list one might choose not to trust them. Just don't go screaming "they've basically been running a Ponzi scheme" with the only proof being them not telling you what you want to know about their operations.
PKop 9y ago
Do you not see that inability to redeem for Dollars (AND the fact that most people aren't doing this but rather pumping these so-called-$-backed-tokens into other cryptos) could potentially be catastrophic if they were created without organic investment? They would literally be fake money priced at $1 buying $1 of BTC. It is the definition of inflation: increased money supply. Except it's priced in $, which hasn't actually inflated. So if the bubble pops and the money is found to be fraudulent, then it equates to money supply shrinking. Artificial demand removed..

Jasper_ 9y ago

How does that prove that Tethers has USD to back each USDT? If it's all exchange-based then there's no guarantee of a peg to USD.

askmike 9y ago
I 100% agree with you how risky it is and how hard to prove this is for bfx. It's very dangerous and there is a lot of money on the line (not just the tethers themselves, USDT reaches for and beyond bfx). However I don't think it's obvious that this thing will implode, based on the information we have we can only speculate. Pointing to screenshots about being unable to withtdraw tethers is a red herring and has nothing to do with whether tether will implode.
- Jasper_ 9y ago
  It's not hard at all. There's a few, very basic things that would change my tone: 1) Let users exchange USDT for USD no matter the denomination or status. If they can't do that, remove the thing that says "You always have 24/7 access to our balance" from the website marketing. 2) Release an official audit (that doesn't say "this is not an audit") 3) Explain the large amounts of Tethers being minted. If they are legitimate, who is pumping $100m into Tethers almost every 3 days? No need to be specific, but records would be nice. 4) Tell us who their banking partners are that are holding the USD. 5) Put their transparency page back up [0]. Bonus points if they actually keep the "Shareholder Equity" number negative in the interest of transparency, or explain why it might have gone negative. [0] Compare: https://archive.is/6os3c https://archive.is/6os3c https://wallet.tether.to/transparency https://wallet.tether.to/transparency The fact that they haven't done any of these heavily imply to me that Bitfinex and Tethers are a sham operation.
  - askmike 9y ago
    > If they can't do that, remove the thing that says This again, is related to their marketing and not actually to their solvency (red herring). > Release an official audit (that doesn't say "this is not an audit") Lack of proof !== proof of insolvency. And for all the other ones: They are not entitled to tell you everything. The fact that choose not to is in NO way proof that they are insolvent. I 100% agree that based on your list one might choose not to trust them. Just don't go screaming "they've basically been running a Ponzi scheme" with the only proof being them not telling you what you want to know about their operations.

PKop 9y ago

Do you not see that inability to redeem for Dollars (AND the fact that most people aren't doing this but rather pumping these so-called-$-backed-tokens into other cryptos) could potentially be catastrophic if they were created without organic investment? They would literally be fake money priced at $1 buying $1 of BTC. It is the definition of inflation: increased money supply. Except it's priced in $, which hasn't actually inflated. So if the bubble pops and the money is found to be fraudulent, then it equates to money supply shrinking. Artificial demand removed..