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Tether has “dissolved” relationship with auditor Friedman LLP
- PhasmaFelis 9y agoWho and who?
- deckar01 9y agoTether is a company that created a cryptocurrency (USDT) pegged to USD that is a popular substitute for trading fiat USD on cryptocurrency exchanges. Friedman LLP is the accounting agency that was supposed to be auditing Tether's USD holdings to ensure they were maintaining a full-reserve (1 USD in holding per 1 USDT in circulation). https://tether.to/announcement-transparency-update/ https://tether.to/announcement-transparency-update/
- jameskilton 9y agoAnd with no audits and some very sketchy behavior, the thinking is that there are hundreds of millions of Tether in circulation without any subsequent backing USD. https://twitter.com/bitfinexed https://twitter.com/bitfinexed
- ufo 9y ago(It is up to 2.2 Billion now!)
- ufo 9y agoThether Inc. is a company running a cryptocurrency scam. They have create a cryptocurrency (also called Tether) that they claim is pegged to the US dollar. They have since emitted more than 2 billion of these tethers, and they claim that they are holding an equivalent amount of US dollars in their bank accounts. Tether Inc. have never released a public audit proving that they have these billions of dollars that they claim to have. And today the company that they said was auditing them has apparently cut ties with them, which is yet another sign that tethers are a scam that is about to blow up. The reason why this is important is the magnitude of the fraud here. Is is suspected that the billions of dollars of fake money that Tether has printed have been used to push up Bitcoin and cryptocurrency prices to their current high levels. There are many cryptocurrency exchanges accept tethers as if they were worth 1 USD and the latest price increase in bitcoin price that started last April coincides with when Tether inc became more active.
- dragonwriter 9y agoMore substantive article linked deeper in Twitter chain: https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved/ https://www.coindesk.com/tether-confirms-relationship-audito...
- tehlike 9y agoFollowing bitfinexed@ is also good.
- Lazare 9y agoDon't worry guys, I'm sure Tether is a 100% legitimate operation that just happens to be conducting an ongoing research project to see how much like a scam they can appear. They've got the money, they're just keeping it hidden! ...very hidden! They had to fire their auditors because they were about to find proof the money exists, and that would have ruined the research project! More seriously, I've got to ask: Why does anyone trust them? Why did anyone trust them? They've never offered the slightest reason to think they're anything else but a particularly lazy fraud. Is this an "emperor's new clothes" situation where everyone assumes everyone else has proof of Tether's validity, and doesn't want to look dumb by asking? Or a "bigger fool" situation where everyone believes Tether is a fraud, but thinks they can get out and leave someone else holding the bag when it bursts? Raw wishful thinking because a legit Tether would be so useful to the ecosystem that people have collectively decided to pretend it does exist? Or what?
- mschuster91 9y ago> Why does anyone trust them? Why did anyone trust them? Greed. I get why people would trust BTC, Ether (before the DAO hardfork, that is) or Dogecoin, as these had real value and usecases (e.g. Bitcoin for getting high quality weed, ecstasy or guns, and Dogecoin for having fun + a quick-and-easy donation way on Reddit other than gold). But the other ~1.5k coins listed on https://coinmarketcap.com/ https://coinmarketcap.com/? What in blazes? People stuck billions of dollars into altcoins!
- jpatokal 9y agoNot really: just because the market cap of an altcoin is in the billions doesn't mean there's more than a tiny fraction of that amount actually invested (as in, bought with fiat) into it.
- mschuster91 9y agoYeah but the trading volume shows that there is substantial activity on a boatload of altcoins. Of course it may be artificially inflated but I do believe that a lot of people did invest back in the coincraze last December - and for what its worth now that prices are more down-to-earth it may be possible that the more adventurous want to buy in as long as the prices are low...
- lhl 9y agoWhat's interesting is that while Coindesk posted to this as "breaking" news, plenty of people (like @bitfinexed) had noticed and dug into this on the 23rd: https://twitter.com/Bitfinexed/status/956053106516688898 https://twitter.com/Bitfinexed/status/956053106516688898 (from a closed discussion group on the 24th: "I just spoke with the AICPA, Friedman has no professional responsibility to announce if they were ever auditing Bitfinex/Tether and/or if they withdrew from the engagement, so we will never know if there was even an audit in the first place.") I've been personally pretty closely tracking the Tether situation, as I think it's basically the largest risk to the cryptocurrency market today. Here's a good even-handed summary that covers both sides and what it might mean: https://steemit.com/cryptocurrency/@cryptoscopia/making-sense-of-the-tether-situation https://steemit.com/cryptocurrency/@cryptoscopia/making-sens... Regardless of whether Tether is fully backed, it's certainly running fraudulently. The original premise promised not just 1:1 USD backing, but also regular audits, which AFAIK have never happened (first supposedly engaging w/ Ledger Labs, and then with Friedman LLP) and now appear like they will never happen. Of course, as bitfinexed pointed out, it's not like they didn't warn anyone about it in their white paper: https://twitter.com/Bitfinexed/status/957416416294068224 https://twitter.com/Bitfinexed/status/957416416294068224 (The white paper of course does lie because it specifies regular audits and also banking partners that were aware of their business model.) For those tracking the market conditions of an impending Tether collapse, I recommend reading this article (and tracking the author, @BambouClub's twitter feed): https://hackernoon.com/what-will-happen-when-the-shit-hits-the-fan-with-tether-f59f92fd8dca https://hackernoon.com/what-will-happen-when-the-shit-hits-t...
- chrisco255 9y agoI'm just not understanding how a $1.5B scam coin would impact the crypto market dramatically at this point. Coincheck got hacked for $500M today and the markets are green across the board. There are alternative peg currencies to the dollar, including Dai, by Maker, which is backed by Ethereum, and seems like a better model for a stable coin: https://coinmarketcap.com/currencies/dai/ https://coinmarketcap.com/currencies/dai/
- guildenstern 9y ago
- conanbatt 9y agoWhat I truly don't get from the tether is how its almost at parity on kraken (https://www.kraken.com/charts https://www.kraken.com/charts) You would expect a sizable discount going on for all the shennaningans.
- 256 9y agoI'm guessing this is because most people who trade tether don't intend on holding it for long, so the "shennanigans" surrounding tether aren't as likely to affect them.
- paulgb 9y agoThey could be buying up the excess supply from the reserves. In fact, I thought that was part of the design of Tether, but I haven't really dug into the details. What will be interesting, if that's the case, is what happens if their reserves are not enough to cover the outstanding supply. Things could go sour very fast.
- SwellJoe 9y agoThey have to buy up the excess supply to keep the Ponzi scheme going. As long as it's lower than the amount they're able to get away with counterfeiting, it's just a cost of doing business. Even Ponzi paid some of his investors. They'll keep buying back Tethers...until one day, they won't. And, I'd guess that day will come when there are a couple billion Tethers out there, and the folks running the scam decide it's enough to buy an island to retire on. What's that you say? There are already a couple billion Tethers? Well...I guess anyone unlucky or dumb enough to be holding Tethers ought to GTFO if they can.
- vzcx 9y agoHN might be interested in this statistical analysis of Tether's influence on the cryptocurrency markets: http://www.tetherreport.com/ http://www.tetherreport.com/
- cjbprime 9y agoI think it had some (critical) comments of the statistics on HN. Not saying Tether is legit. Just haven't heard that this report is especially persuasive.
- neuralzen 9y agoI'm really glad Jibrel's tokens are unlocking in 3 days, don't have to deal with Tether bullshit anymore.
- brandnewlow 9y agoHow might one make a few bucks from Tether falling apart?
- tehlike 9y agoShort futures.
- alexeldeib 9y agoThis seems like a sound approach in general to be honest. If they succeeed, tether should remain 1:1 USD. If they fail, the price declines to 0. So the typical unlimited downside of the short is plausibly negated by their own definition of success.
- SwellJoe 9y agoAre there futures on Tethers? One could short Bitcoin, but it's hard to predict how soon this is going to come crashing down. I sold nearly all my cryptocurrency a couple of weeks ago on the belief that Tether would collapse the market, but others sold long before that...and before the massive run up to $10k+. Had those folks shorted back then, they would have had to close their positions...and would have lost a lot of money. Even though they are (I believe) long-term right. I'm just saying be careful with shorting something with unlimited potential upside...like Bitcoin. But, if I could short Tethers, I would, though I don't know who'd take the other side of that deal.