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Don'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
by Lazare 9y ago
Don'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...
- chrisco255 9y agoYeah, I can make a coin with $10T supply and sell one for $1 and imply a $10T market cap.
- SCAQTony 9y ago…Which makes trading volume a very important statistic to monitor.
- maxander 9y agoHe could proceed to have a bunch of bots throw coins around randomly, also, so trading volume gives you nil reliable info, either.
- mschuster91 9y agoThis sort of behavior only works on exchanges with zero or extremely low trading fees.
- closeparen 9y agoThe trading fees would merely have to be lower than the appreciation in the value of your own holdings as a result of the apparent legitimacy.
- fbdjskajxb 9y agoAt 0.05% fee (public rate for Binance, is probably lower for people in the know), it is a four-figure USD investment to get your coin in the top 100 volume chart for a day. Then when real people start buying in, you can sell a tiny fraction of your holdings to finance more fake volume.
- SwellJoe 9y agoIt also works when you own the exchange. There's pretty good reason to believe wash trading is happening at several exchanges...possibly performed by the exchange themselves. I'm more willing to believe Bitfinex is doing the BTC wash trading that's happening on their exchange, rather than some whale doing it (the very close connection between Tether and Bitfinex, sharing several founders and C-levels, makes this seem even more likely).
- earenndil 9y agoLTC, Bitcoin cash: similar reasons to doge. Monero: anonymity.
- riku_iki 9y ago> Greed. How it's relevant? Tether has fixed price: 1 USDT = 1 USD, you can't become rich by buying it.
- bigbluedots 9y agoLarge amounts of Tether is being printed to buy bitcoin, particularly when bitcoin has lost value quickly. Unsurprisingly, this tends to help the price rebound.
- jebeng 9y agoWhen they print the Tether to purchase BTC, who's keeping the BTC that's bought? Assuming this is an actual fraud going on and not real USD being held to back each Tether 1:1.
- ht85 9y agoPeople don't really trust them, but it's not like you have a choice if you want to be in crypto. It's more of a calculated risk that you have to take. The explanation behind them putting off the audit might have nothing to do with tether. It could be concerns about what an investigation could uncover in their creative bookkeeping, being an incredibly profitable, offshore, unregulated company and all. In the end, the whole situation boils down to 1) Did people really wire them the equivalent of the entire tether market cap? 2) Did they use the money? I don't think it's unrealistic that ~1.5B has entered the market in the last few months. I also don't think it's impossible they didn't need to touch that money, given that they seem to pocket 8 figures in fees daily. That's not even counting all the other things they can legally do as an unregulated exchange, like front-running, liquidation fishing with unlimited assets, etc.
- millstone 9y agoStupid question: Why don't you have a choice if you want to be in crypto? People were exchanging bitcoin before tether was created; what changed?
- dreit1 9y agoThe most popular exchanges these days are crypto only. Thus if your a trader that wants to trade against the dollar, you have to do USDT, not the actual dollar
- harryh 9y agoDoesn't this mean that all the market values on crypto only exchanges are kind of suspect? Because if you eventually want to get out of crypto and into dollars (to, you know, buy stuff in the real world) there is a good chance you won't be able to because no one is actually there willing to give you dollars for tethers?
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- danieltillett 9y agoThe more interesting question is why has Tether been allowed to run wild for so long? Imagine if you were part of the current elite that had control over the current fiat currency system and something like bitcoin appeared. You could ignore it and hope it and its kindred doesn't catch on with the population, or you could allow a fraudulent scam like Tether to run that pushes up the price into the stratosphere and then allow the bubble to burst tar-and-feathering the whole concept of crypto currencies. It is not like hundreds of trillions of dollars are at risk if we move away from fiat currencies.
- paulgb 9y agoWhat I don't get about these conspiracy theories about the "current elite", is if they thought bitcoin was such a threat they could just put money in it. Until I hear otherwise, I assume Hanlon's razor is at play here: regulators in all jurisdictions are still figuring out what to think about cryptocurrencies. US regulators have their hands tied in the case of Tether because they've gone to lengths to avoid US jurisdiction. Other regulators around the world may be less resourced.
- mr_spothawk 9y ago> they've gone to lengths to avoid US jurisdiction. can you offer some details about what you're describing?
- wmf 9y agoMost governments really doesn't like people issuing anonymous assets that are "as good as dollars" like Liberty Reserve or Tether. The entire point of Tether is to help cryptocurrency exchanges avoid AML/KYC laws (because it's expensive to comply with them) and their problems appear to stem from that. IIRC Tether is based in Taiwan and their mystical $2B bank account is presumably in some "offshore" jurisdiction. If Tether ever released an audit they'd have to reveal either that they have no money or what bank they're using and then that bank would be pressured to close their account.
- kalleboo 9y ago
- Scoundreller 9y agoI'm just waiting for the musical rendition of USDT. Matt Stone and Trey Parker can re-use half of The Book of Mormon. Just replace golden plates with USDT.
- pfisch 9y agoI'm guessing you haven't seen The Book of Mormon. It is not about the story told in the actual Mormon bible. That is just a southpark episode.
- Scoundreller 9y agoI have. Relevant quotes include: > But don't let anybody see these plates except for you... > They are only for you to see... > Even if people ask you to show the plates to them, don't > [...] > Even though this might make them question if the plates are real or not... "
- tptacek 9y agoI think similar thoughts about basically all cryptocurrencies.
- Feniks 9y agoBecause interest rates are ridiculously low and VAST amounts of money are looking for ANYTHING to invest in.