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U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
- ceejayoz 9y agoVia Reddit: "Looks like they are gonna get a free audit!"
- machinecontrol 9y agoIf this is a grand jury subpoena, things could get ugly fast in the crypto space. Despite all talk of decentralization, the major exchanges pose a systemic risk.
- politician 9y agoThe achilles' heel with these systems is their integration points with fiat. Always has been.
- brokensegue 9y agoFor a different perspective, I would say their problem is integration with the "real world" with constrains that bitcoin wasn't designed for.
- jandrese 9y agoWhat use is a currency (or commodity!) that you can't convert into a good or service? It seems like a fundamental problem if the theoretical advantages of a currency are lost the instant you try to use it to buy something. Otherwise we're just wasting gigawatts of electricity to print Monopoly money.
- deadmetheny 9y ago>Otherwise we're just wasting gigawatts of electricity to print Monopoly money. The sooner people realize this is exactly what is happening, the better.
- krapp 9y agoThe assumption has always been that cryptocurrency driven markets would emerge completely decoupled from states and their systems of financial regulation, and so conversion would be neither necessary, nor desired. Everything you could possibly want to buy, legal or illegal, would be payable through the crypto market. Cryptocurrencies were supposed to undermine fiat, or at least render it unnecessary, barring taxes, not cooperate with it.
- jandrese 9y agoIt took a serious tin hat warrior to actually believe that line. "If everybody in the world instantly switches over to my new currency overnight everything will be awesome!" That's so far divorced from reality only pure mathematicians could love it. Not to mention it would never work, the blockchain has way too much overhead (many many orders of magnitude) to support an entire world's worth of exchanges every day. There literally isn't enough electricity in the world. People would have to do all of their transfers on third party exchanges that undermine all of the crypto guarantees of the currency in the first place. They're no better than putting your fiat currency in a bank run by criminals that have no respect for laws. And I'm not talking euphemistically about regular bankers here, I'm talking about full up scam artists. I mean why not, it's not like the law is going to get you. There are no pesky regulations to get in the way. No annoying insurance adjusters breathing down your neck. You have total freedom to scam everybody all day long.
- 0wing 9y agoAlso consider nearly all of Bitcoin and other cryptocurrencies are "premined" in the sense that only a few early adopters control more then half the supply due to how the work readjustment algorithms are skewed to generate all the coins very easy for a few users but later new users don't have equal access to produce coins as easily or cheaply as those other users.
- gruez 9y agoAlso consider nearly all corporations are "premined" in the sense that only a few early founders/early investors control more then half the shares and new investors don't have equal access to buy shares as easyly (sic) or cheaply as those other investors.
- 21 9y agoIf you don't integrate with fiat, all you have is "mobile game gems" or "WoW gold". Fiat is and always will be tightly monitored and controlled. If cryptos want to replace fiat, they will have to do the same.
- Crespyl 9y agoThat's assuming you can't find anyone to trade goods and services for crypto directly.
- M2Ys4U 9y agoAt which point _they_ will have to interface with the world of fiat, if for nothing else than to pay tax.
- simias 9y agoWhich just pushes the problem a little further away since eventually somebody will have to pay taxes in fiat so if your cryptocurrency is not convertible it's going to be a problem.
- rocqua 9y agoOriginally, 'fiat' had the same link to gold as crypto has to fiat. True, for taxes fiat is needed, but it is possible to have a thriving economy without needing access to fiat. The moment people can start to pay rent and groceries in crypto, it makes sense to accept crypto even if you can't turn it into fiat. As long as taxes are paid in fiat, you need some of it, but that wouldn't make crypto useless.
- realusername 9y agoYou would also need crypto value to be much more stable for that to happen but I also agree with the idea.
- gressquel 9y agomarket already starting to dip. Down another 6% right after this news go out
- SirensOfTitan 9y agoHow is this related? USDT is effectively a centralized currency. Bitfinex has always been shady. Are you saying that exchanges that accept USDT will get hit hard by this?
- JumpCrisscross 9y ago> Are you saying that exchanges that accept USDT will get hit hard by this? If they sold a single USDT to an American, possibly. At the very least, they may be liable for American USDT investors’ losses plus fines. Disclaimer: I am not a lawyer. This is not legal nor securities-related advice. Do not buy or sell anything based on my Internet comments.
- machinecontrol 9y agoIf USDT goes to zero, every exchange that trades it becomes immediately insolvent.
- gojomo 9y agoOnly an exchange that is somehow on-the-hook to redeem USDT for actual USD at parity would have problems. An exchange could offer USDT trading but still have negligible exposure to its value itself. And then if USDT goes to zero – radically breaking the intended parity-with-USD – direct losses should be confined to USDT holders, not exchanges.
- dragonwriter 9y ago> If USDT goes to zero, every exchange that trades it becomes immediately insolvent. Nope. They'd only be insolvent if they had a legal binding commitment to redeem USDT 1:1 in dollars, and only if they didn't have sufficient other USD reserves to do so.
- ThrustVectoring 9y agoThe exchanges get sued by the Tether bagholders, and everyone else gets spooked and attempts to exit. So not insolvent, but no active business activities and a bunch of lawsuits incoming, and might as well be insolvent.
- product50 9y agoWell, Bitfinex and Tether is how legacy exchanges operate. Bitfinex is completely centralized and issues Tether (a stable coin) as a feature to enable traders to do "cash out" from the volatility of crypto when they feel like. Going forward though there will be dexes and decentralized stable coins (such as Basecoin). Those would be extremely difficult to track down and have strong incentive structures to maintain their value.
- deleted 9y ago[deleted]
- mtgx 9y agoThere are a bunch of decentralized cryptocurrency exchange projects coming. My favorite so far are https://loopring.org https://loopring.org and https://0xproject.com https://0xproject.com, but there are like a dozen out there. This is just the beginning. As centralized exchanges start having all sorts of problems (CoinCheck, Bitfinex, maybe Bittrex and Poloniex soon), more people will start looking into decentralized exchanges and thus increase their liquidity. Even Binance, one of the biggest centralized exchanges right now, said that it wants to become a decentralized exchange. All of this probably won't happen within the next year, but it will happen. It's just a matter of all the pieces falling into place for people to switch. Probably the #1 thing that could help their adoption is being able to integrate new cryptocurrencies faster than any centralized exchange can, especially if this integration is "permissionless", by simply allowing the cryptocurrency developers to support its protocol and then have the cryptcurrency automatically appear on the exchange.
- tobltobs 9y ago> especially if this integration is "permissionless", by simply allowing the cryptocurrency developers to support its protocol and then have the cryptcurrency automatically appear on the exchange. A shortage of shitcoins isn't the biggest problem currently for the cryptospace.
- mtgx 9y agoWhether you like it or not, people want to get their "shitcoins" early. It's also what I believe may be the #1 reason why crypto-exchanges aren't way more centralized right now, and why Coinbase doesn't own 80% of the market, as Mt.Gox used to. No single exchange can keep up with every new cryptocurrency, so people start creating accounts with all the exchanges, and then start preferring the new ones if they also bring overall site improvements over the incumbents, and eventually dump the incumbents. This is healthy for the cryptocurrency market. If this wouldn't have happened, things could have been a lot worse with centralized exchanges. I don't know what the "final form" of this ecosystem will be, but I hope it will be something like the internet. Decentralized exchanges essentially being "protocols" like TCP, which link all the cryptocurrencies (servers) and users (clients) with each other, and everyone can "exchange" (connect) one cryptocurrency to another. But unlike the internet, I hope there will be a much bigger emphasis on P2P connections/transactions, and that we won't sacrifice that just to get a little more performance or more convenience. There will be such more centralized cryptocurrencies, too, just like today's internet continues to have huge walled gardens like Facebook, but hopefully it won't be the majority of them.
- pwaai 9y agoany specific reason why that would accelerate the downfall? how long until we find out about the outcome after the subpoena sent out last week?
- alistproducer2 9y agoI agree. I have a comment somewhere in my history saying the same thing. No matter how decentralized we like to imagine crypto to be, the fiat on and off ramps are highly centralized and can bring the whole thing crashing down in a hurry.
- gressquel 9y agoIts shocking how they have been allowed to continue printing "fake money" for so long. There were rumours going around long before christmas. Its about time this 'scam' was exposed.
- stusmall 9y agoI'm not very familiar with this world, but that seems fast. I always assumed the world of financial crime enforcement moved like molasses. When I started hearing those rumors I just assumed it'd be months after the crash before the feds showed up. Maybe I'm just cynical. But I 100% agree, its about time.
- tdb7893 9y agoThey do move like molasses. https://en.m.wikipedia.org/wiki/Great_Molasses_Flood https://en.m.wikipedia.org/wiki/Great_Molasses_Flood
- TeMPOraL 9y agoMy impression from watching financial crimes play out in the news is this: there's a long, slow period of investigations, interviews, etc. and then suddenly people get dragged out in the middle of the night in handcuffs.
- dragonwriter 9y ago> Its shocking how they have been allowed to continue printing "fake money" for so long. There were rumours going around long before christmas. The subpoenas were issued December 6; just because the news just broke doesn't mean that the government just got involved.
- atarian 9y agoWhat is the point of Tether? Is it for dodging taxes?
- samsonradu 9y agoDodging regulation, in that many exchanges don’t touch money but tether instead.
- ceejayoz 9y agoCircumventing know-your-customer laws.
- machinecontrol 9y agoTether is supposedly pegged to USD. Traders use it to store assets while avoiding crypto price volatility without having to deal with fiat currency.
- TaylorGood 9y agoWhich, Waves DEX has USD as an option in their wallets. Bypassing the need for Tether altogether, but their exchange is also rather limited..
- vkou 9y agoHow is not having to deal with fiat currency an advantage for traders? They still need to do cost-basis accounting for taxes, and this just shifts their risk of <exchange I use stealing all my USD and the police will never get it back> to <USDT will pop and collapse into worthlessness>. I understand how this benefits exchanges (Because they can claim they don't need to follow KYC), but how does it benefit their users? They'll also eventually need to convert USDT into USD - which they can withdraw. If you have an exchange that you can withdraw USD from, why are you even keeping your balance in USDT? Just trade on that exchange... It's like if the NYSE only allowed you to cash out in scrip. I understand how this benefits them, but how does it benefit me?
- GenericsMotors 9y ago
- JumpCrisscross 9y agoCryptocurrencies are in an interesting middle ground, from a regulator’s political perspective. They’re complicated and stand to harm mostly those who inflicted it on themselves. For an ambitious regulator looking forward to an administration’s nominating committee, Senate confirmation hearing or even campaign trail, that makes it unattractive relative to e.g. insider-trading hedge fund managers or Medicare fraudsters. (To the contrast, we’re approaching the critical scam mass in Asia.)
- treve 9y agoPonzi schemes also only harm those who inflict it on themselves.
- ebbv 9y agoUnless they get so big they affect the economy as a whole.
- ceejayoz 9y agohttps://en.wikipedia.org/wiki/Albanian_Civil_War https://en.wikipedia.org/wiki/Albanian_Civil_War > The Albanian Civil War, also known as the Albanian rebellion, Albanian unrest or the Pyramid crisis, was a period of civil disorder in Albania in 1997, sparked by Ponzi scheme failures. The government was toppled and more than 2,000 people were killed. It is considered to be either a rebellion, a civil war, or a rebellion that escalated into a civil war.
- dullgiulio 9y agoUntil now, Bitcoin is not considered a systemic risk[1], which simply means that /when/ it will crash it won't drag the whole world economy down with it. Lots of people will get burned pretty badly though. Like the saying goes, freezing feet and burning head makes for a good average temperature. [1] https://www.economist.com/news/leaders/21732526-there-investment-case-cryptocurrency-bitcoin-speculative-asset-not-yet https://www.economist.com/news/leaders/21732526-there-invest...
- 9y ago
- wu-ikkyu 9y ago>Tether has yet to verify that it holds $2.3 billion in reserve This will be interesting to see. I wonder how long until we'll know. I saw an interesting data analysis here on HN a while back showing a correlation, and hypothesizing a causation between the rise of Tether and the price of BTC.
- bpicolo 9y agoThere is a 0% chance they have 2.3 billion USD on hand
- KasianFranks 9y agoThis is good news for quality cryptocurrency organizations. Bitfinex has problems, so does Tether and it's good to see bad actors in the crypto world getting weeded out, called out and put down.
- ceejayoz 9y agoC'mon, say the "This is good for Bitcoin!" thing.
- to3m 9y agoThis is good for Bitcoin.
- hart_russell 9y agoBitcoin is a dinosaur that will either need to adapt or die.
- brokensegue 9y agowhich is odd because I thought the libertarian dystopia that bitcoin is pushing us towards abhors this kind of regulatory interference
- nkrisc 9y agoI thought this was all "working as intended."
- jerkstate 9y agothose libertarians have been expecting this and have traded their tether-pumped btc for gold, land, etc. it's the late to the game profit seekers who have bought in over the past few months who will get killed by this. even if the tether founders have made off with whatever cash deposits they had and there's nothing in the vault, cryptocurrencies will still have value and will rise again.
- sunseb 9y agoYeah all news are good news for greedy Bitcoin hodlers !
- JustAnotherPat 9y agoit's based in Hong Kong. Hope they don't comply.
- drcode 9y agoSummary for newbs: Bitfinex is a crypto exchange kinda based in Hong Kong and kind of based in Taiwan (this seems to change depending on convenience.) Taiwan recently started becoming more rigorous about monitoring international USD wires, and lots of Bitfinex users had their money stranded in Taiwan. Bitfinex stopped supporting US customers because of these difficulties (AFAIK most customers did eventually get their money out though) Tether is a company/product that is a cryptocurrency that (aspirationally) has a value of exactly 1 USD. The Tether company and Bitfinex are (supposedly) two unrelated companies that nevertheless have mostly the same people employed as principals. Because crypto daytraders need easy ways to quickly pull their money in/out of crypto exposure, the Tether currency has been a massive hit as a way to convert into pseudo-dollars. Because of this, people have bought billions of these "tethers" from the company, but no one has a good handle on where these billions of dollars are safeguarded, if at all.
- gressquel 9y agoa little correction. Tether and Bitfinex were exposed in Panama Papers as sister companies. They are not two unrelated as they say they are. Even more reason to stay away from Bitfinex and USDT
- profuse99 9y agocorrect. phil potter is director at both bitfinex and tether. tethers get deposited straight to bitfinex upon creation as far as i understand it. source: https://offshoreleaks.icij.org/nodes/82024464 https://offshoreleaks.icij.org/nodes/82024464
- fpgaminer 9y agoSo, how does this work legally? Bitfinex isn't a U.S. based company and doesn't work with U.S. citizens. The article says where it's based is unknown. Does the CFTC have the authority to subpoena them? Is it because they're claiming Tether is USD pegged, so they gain authority because of their use of the dollar? Honestly just a curious question. (I'm not looking for snarky answers to the effect of "world police".)
- sna1l 9y agoSeems like the local government can still make it difficult for them to enforce the subpoena, but I imagine Hong Kong will be pretty amenable. [1] [1] https://webcache.googleusercontent.com/search?q=cache:vl90MAITM4cJ:https://pdfs.semanticscholar.org/ff26/4316ec03a6137324de8e0a11bb73965fd396.pdf+&cd=2&hl=en&ct=clnk&gl=us https://webcache.googleusercontent.com/search?q=cache:vl90MA... Disclaimer: I'm not a lawyer, just found this from a cursory search.
- quickthrower2 9y agoI think of Edward Snowden. HK helped him.
- frakr 9y agoDid the gov there actually help him? Or just not hinder him?
- quickthrower2 9y agoTo not hinder is quite a lot of help. Considering it's going to piss off the superpower.
- mar77i 9y agoWell the way I understood it, HK doesn't really need to care who they're pissing off, since they're kind of used to pissing off their big brother.
- hinkley 9y agoI am not proud of the degree of schadenfreude I am experiencing right now. I’m actually craving popcorn. Is anyone at all surprised that they got subpoenaed?
- GenericsMotors 9y ago> Is anyone at all surprised that they got subpoenaed? Not very surprised, no. It was just a matter of time until it became public: https://pbs.twimg.com/media/DRGSIPEW4AEi_Du.jpg https://pbs.twimg.com/media/DRGSIPEW4AEi_Du.jpg
- bby 9y agoWhat is the "deliverable" if the US Regulators find that Tether isn't fully backed by USD? Do they issue fines? Do they shut them down? What about exchanges that deal with USDT (tether)? What do you think are the wider reaching implications of this?
- Animats 9y agoThe SEC took much stronger action with AriseBank.[1] Emergency asset freeze. Receiver appointed. ICO shut down. The SEC alleges AriseBank "falsely stated that it purchased [a Federal Deposit Insurance Corporation]-insured bank which enabled it to offer customers FDIC-insured accounts." Clearly, the SEC has had it with people running these huge scams. [1] https://www.sec.gov/news/press-release/2018-8 https://www.sec.gov/news/press-release/2018-8
- jandrese 9y agoAt least if you're absolutely blatant about your lies. One quick call to the FDIC and it should have been clear that they were spewing bullshit that might come back to haunt the government.
- krisives 9y agoLet’s throw a wrench in here, will they go after Athene he purposely called his “scam coin” and is claiming everyone knew it was a scam
- PeterisP 9y agoAriseBank wasn't only acted on by SEC. For example, "Texas Banking Commissioner Charles Cooper finalized a cease-and-desist order on Friday that said the company, which is registered to a Texas address, is not authorized to engage in the business of banking in the state. The order also noted that Texas law prevents use of the word “bank” in a way that implies to the public that the person is engaged in the business of banking in this state." That was on Friday ... and, in an astonishing display of ignorance and arrogance, they published an open letter stating that they refuse to comply. As the department said, they have had a bunch of cases where people have used the term “bank” in a name, but they had never ever seen a firm refuse to back down. So they sent in the sherifs to ensure that they actually do cease and desist.
- Animats 9y agoThey went completely over the top as a phony bank. Their web site is down, but archived by the Internet Archive.[1] They claimed to be a VISA card issuer. They claimed to own a FDIC-insured bank. They claimed to have ATMs. Plus they had a make-money-fast scheme where their "AIs" would invest for you. The only real question is "why aren't they in jail yet?" [1] https://web.archive.org/web/20180110101846/https://www.arisebank.com/ https://web.archive.org/web/20180110101846/https://www.arise...
- HockeyPlayer 9y agoHow trustworthy is Kraken? Tether looks like a good short since if it is a fraud it will go way down and if it isn't a fraud it will stay right where it is. I'm in the US and would like to short Tether. But I want to get paid if I'm right.
- frgtpsswrdlame 9y agoWhy would someone ever take the other end of that bet?
- gramstrong 9y agoWe're talking crypto investors here. The ones that preach diversification, and then sell every single one of their alt coins when the bitcoin bubble is deflating.
- singularity2001 9y agoalso the selling is often shockingly synchronised. just compare bitcoin and ether charts
- YetAnotherNick 9y agoWhat? See ether to btc here: https://coinmarketcap.com/currencies/ethereum/ https://coinmarketcap.com/currencies/ethereum/
- jonknee 9y agoThe best way is probably to sell BTC futures, if Tether/Bitfinex go down the market will be chaos and won't have the Tether protection team to bid it back up. Those are cash settled and you will 100% get your money. Shorting on any crypto exchange has a lot more counterparty risk.
- stanleydrew 9y agoLet's say I'm hypothetically inclined to sell BTC futures. Where would I go to do that?
- sxates 9y agoI'm not saying that there's nothing worth investigating in the Crypto space, but I wish the SEC spent half the time it spends chasing down shady ICOs looking into fraud at Goldman Sachs and other Wall St. banks. You know, the institutions that whose scale dwarfs crypto and actually has enormous economic repercussions?
- jhwang5 9y agoThey do go after Wall St. banks - what makes you think SEC doesn't?
- sxates 9y agoJust looking at the last 6 months of press releases, I can't find a big bank anywhere. https://www.sec.gov/news/pressreleases https://www.sec.gov/news/pressreleases Then there was that time back in 2008 when all these banks crashed our economy and a single guy was prosecuted and went to jail. 1 guy. But in the last month I can remember at least 3 press releases from the SEC about crypto concerns and investigations.
- dkasper 9y agoBanks likely comply with regulations 99.9% of the time (doesn't mean the regulations work well enough though). They have teams of lawyers and have worked with the SEC for years. Contrast that with crypto where fraud is commonplace, and people constantly flaunt regulations, claim they aren't securities or banks so regulations don't apply, etc. Crypto is a new ballgame and the SEC is trying to figure out how to regulate it appropriately so of course there's a lot of activity there.
- alistproducer2 9y agoI just watched Netflix's Dirty Money episode on HSBC. If you want to throw up in your mouth a little check it out and see how the Obama admin bent over backward to make sure they got a slap on the wrist for knowingly and purposefully laundering terror and drug cartel money for about a decade. Too big to jail is apparently very real.
- aviv 9y agoThere you go. The raids are coming. Called it long ago and downvoted to oblivion here.
- piggybank 9y agoBloomberg has updated their article to include that the subpoena was sent December 6th this 2 months old news now. https://www.reddit.com/r/CryptoCurrency/comments/7u3gqx/bloomberg_has_updated_their_article_to_include/?st=JD21FVNV&sh=e34f6c68 https://www.reddit.com/r/CryptoCurrency/comments/7u3gqx/bloo...
- ffffffffff_ 9y agoA points and a question: Point: USDT is used as a holding point for people wanting to stay in crypto but not be subject to price movement of other coins. This could be used to not trigger a taxable event (even though recently, crypto to crypto transactions were deemed taxable by the IRS). When buying crypto in general, it's much easier/faster to start a transfer from another crypto as opposed to having to move fiat into the "cryptoverse". Question: Why does it matter if Tether is backed at 1:1 ratio with USD? I understand that the people behind Tether have explicity said that each USDT is backed by $1 USD. Why are the legal implications of non-backed USDT different than other cryptocurrencies whose values are based on the market? Is it simiply because Tether has claimed USDT is backed?
- relaxed 9y agoThe ability to trade it in for actual currency is important. Even though their TOS says they aren't required to give you USD for tether they actually did at some point. (some say still do)
- Nursie 9y ago1. If there are no USD backing, why would its value stick to $1? 2. Correct, the claims are a problem. They claim backing and audits and these may constitute fraud 3. If they just print them out of nowhere they are basically printing hundreds of millions of dollars for themselves. If they aren't backed, do you think they could hold value in these circumstances? 4. These magic unbacked tokens are probably a large part of BTC price rises in recent months, and look like extra demand in the marketplace, massively distorting the BTC and altcoin markets.
- onewhonknocks 9y agoThey updated the article several hours later with: 'The U.S. Commodity Futures Trading Commission sent subpoenas on Dec. 6 to virtual-currency venue Bitfinex and Tether, a company that issues a widely traded coin and claims it’s pegged to the dollar, according to a person familiar with the matter, who asked not to be identified discussing private information.'
- g09980 9y agoThis should be much more visible. The market is panic selling on effectively old news.
- onewhonknocks 9y agoAgreed. Thank you for saying so. edit: is there a way to bold text in an HN comment?
- tinus_hn 9y agoThankfully, no there isn’t.
- AlexCoventry 9y ago𝗡𝗼𝘁 𝘂𝘀𝗶𝗻𝗴 𝗺𝗮𝗿𝗸𝘂𝗽𝘀, 𝗮𝗻𝘆𝘄𝗮𝘆...
- foobar2020 9y agoUnicode to the rescue! Here's how to make 𝗯𝗼𝗹𝗱 text: http://qaz.wtf/u/convert.cgi http://qaz.wtf/u/convert.cgi Looks a bit ugly, but works.
- dragonwriter 9y agoIt's not “old news” if it wasn't publicly known in the past (and if the market had known it already, no one would be panic selling based on it.)
- bhouston 9y agoHow long until USDT is delisted from most other exchanges? I wonder which is the larger risk, USDT coming unpegged, or just straight out being delisted from nearly all exchanges?
- demosthenes111 9y agoDelisting is probably the best case scenario imo. If the dung hits the fan with Tether while many exchanges are based on it, it could be a very bad thing for the entire cryptocurrency market. I could definitely see that scenario causing a massive "bank run" where many people try to pull their money out at the same time and several major exchanges go insolvent, resulting in mtgox style loss of confidence in cryptocurrency in general. Delisting would hopefully signal that "we know there's sketchy stuff happening there, so we are working around it and finding solutions." And it would insulate the exhanges from huge price swings on every USDT/* trading pair.
- mancerayder 9y agoAs per my other comment above, I find it infuriating that they didn't delist Tether months ago. The printing of Tether, so to speak, is absolutely a spiraling problem. There is a qualitative easing inflationary quality to the entire crypto marketplace so long as it is allowed. It's a huge disappointment that that thing wasn't yanked late 2017 from all half-respectable exchanges.
- darawk 9y agoSo, to those who are skeptical of Tether...you know that you can convert Tether 1:1 for USD by depositing it at Bitfinex, right? They'll then wire you that USD to any Taiwanese bank account[1] (the only banks that haven't frozen their wires). AFAIK, there are no reports from Taiwanese account holders of trouble with these wires. [1] - https://www.bitfinex.com/posts/203 https://www.bitfinex.com/posts/203
- thinkmoore 9y agoWho is "you"? From the terms of service: "Absent a reasonable legal justification not to redeem Tether Tokens, and provided that you are a fully verified customer of Tether, your Tether Tokens are freely redeemable... Furthermore, residents of certain U.S. states are not permitted to be customers of Tether; are not permitted to cause Tethers to be issued or redeemed; and, are not permitted to hold Tether Tokens. Beginning on January 1, 2018, Tether Tokens will no longer be issued to U.S. Persons." So if you hold Tether Tokens but are not a "customer", you have no claim to be paid. I suppose Tether customers (whoever they may be) might be willing to pay you dollars for your coins, but there's no reason for them to give you 1:1, for sure.
- eudoxus 9y agoThey just updated the article that the subpoena was actually sent on December 6th. So this is already technically old news. Just more FUD being thrown around by news outlets that should know better.
- dragonwriter 9y ago“Old news” is news that merely reiterate facts that were already widely known. News that makes new revelations that were not generally known about events in even the distant past is still new news, and last December isn't the distant past, anyway.
- zaroth 9y agoRead as far as “Tether has yet to verify 2.3 Billion in reserves” and started laughing so hard I have tears running down my face right now. Good god how could you even write that and not immediately understand the whole thing is a shitshow scam run by a bunch of clowns? Someone fancies themselves an offshoot of the US treasury and is taking their new printing presses for a spin. Hell if I had my own little US mint I’d be running it 24/7 too!
- serg_chernata 9y agoThis is 2 months old.
- deleted 9y ago[deleted]
- AlexCoventry 9y agoAnyone got a copy of the actual subpoena? I don't understand why journalists don't provide a link to such public supporting source documents.
- pkilgore 9y agoIt's not uncommon for investigative subpoenas to be under seal. But to be fair I have no idea how these particular agencies operate.
- oculusthrift 9y agomight hurt in the short run but the sooner these scams are gotten rid of, the better in the long run for crypto to develop
- snissn 9y agoActually, this is good for tether
- mancerayder 9y agoWhat bothers me more than anything in this isn't the existence of Tether and the suspicious behavior of Tether/Bitfinex players... It's that Bittrex and others are attempting to become mainstream and they've accepted these USDT since forever, and they continue to accept them well after the suspicions were public. This is a black stain on the exchanges. It also personally makes me cynical of the entire space. I moved my mainstream coins off of Bittrex and back into GDAX where it seems safer. <rant warning> Why can't profitable exchanges like Bittrex and Kraken self-regulate?? Over and over again the invisible hand of the market is proved to be eclipsed by the visible hammer of the regulator (which can't come soon enough, by the way). </rant>
- 0wing 9y agoIf Tether is a "scam" backed by nothing, why would other Cryptocurrencies be more valid? It's just software.
- bb88 9y agoIt's price fixed at the US Dollar. So if I own USDT, I should be able to convert USDT to BTC (e.g.) or paper money. If everyone converts their USDT to paper money, the organization that backs USDT has to refund USDT to dollars. If there aren't enough dollars to cover the price of USDT selling, then the USDT market goes belly up. BTC is buy/sell driven through some kind of exchange so the price can float.
- zik 9y agoDon't ever keep coins on an exchange. Use a hardware wallet. If you don't have them in your possession they're not really your coins and you can get "Goxed" - ie. the world's largest exchange at the time, Mt Gox, disappeared with most of the user funds.
- mancerayder 9y agoYes, all reasonable paranoia. However I do trust Coinbase/GDAX as far as BTC, ETH LTC are concerned. It's a pain to store a few K USD worth of altcoins in my hw wallet (which I'm not even sure supports most of them). What if I'm at work and an event happens that makes me want to sell? The wallet requires an app to be installed. If there's a hint of an issue with Bittrex, I'll trade to ETH and move them to GDAX. Am I being a fool here?
- dingo_bat 9y agoThe more I read about USDT, more it looks like money laundering. These guys take your USD and issue you equivalent tokens you can trade with. As long as a lot of people don't try to encash their tokens everything will be fine. Also note that if holding USD is the only problem this is supposed to solve, why not just hold USD? Except if you want to bypass your local laws. I buy USDT in country A. Trade BTC for it, then sell BTC for USD in another exchange in country B. This is the only utility and this itself seems illegal.
- dawhizkid 9y agoMost cryptoexchanges don't actually support cryto<>fiat transfers, so USDT offers a substitute in situations where you don't want to "cash out" (per se) but want to hold some of your balance in something that is supposed to be equivalent to fiat.
- dingo_bat 9y agoMakes sense, so instead of holding BTC which can go +-30% in a few hours, you hold in USDT which is pegged to the dollar.
- jnbiche 9y ago> These guys take your USD and issue you equivalent tokens you can trade with. Nope. That's how it was until about a year ago, when all their banking accounts were closed (probably due to the issue you describe). For the past year, they just randomly printed millions of "US-Backed" tokens, and people trade them as if they were actually backed by dollars, even though they are not the result (since a year ago) of any USD deposits, and even though you can exchange them for actual USD. It's bizarre.
- jnbiche 9y ago> and even though you can exchange them for actual USD. That was a typo, I should have written, "and even though you can't exchange them for actual USD."
- sitepodmatt 9y agoAbout time.
- paulie_a 9y agoI am just going to grab some popcorn and watch the slow moving train wreck that is tether.