9 ms·

So, 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 t

So, 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 ago
Seems 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 ago
  I think of Edward Snowden. HK helped him.
  - frakr 9y ago
    Did the gov there actually help him? Or just not hinder him?
    - quickthrower2 9y ago
      To not hinder is quite a lot of help. Considering it's going to piss off the superpower.
      - mar77i 9y ago
        Well 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.
hendzen 9y ago
Among many other reasons, due to the listing of Bitcoin futures on CBOE and CME the CFTC now has some oversight on the spot market.
jonknee 9y ago
They claim to have the USD in a bank somewhere which means the US can come after them. This is why Wells Fargo dumped them (which is saying something!).
- koheripbal 9y ago
  No. A foreign bank can hold USD without any US oversight.
  - JumpCrisscross 9y ago
    > A foreign bank can hold USD without any US oversight If they hold it as hard cash, practically, sure. If they want to be allowed to send or receive wires and generally not get sanctioned by the United States, no. The U.S. Treasury claims international jurisdiction over U.S. dollars [1]. [1] https://cblr.columbia.edu/the-u-s-jurisdiction-over-transfers-of-u-s-dollars-between-foreigners-and-over-ownership-of-u-s-dollar-accounts-in-foreign-bans/ https://cblr.columbia.edu/the-u-s-jurisdiction-over-transfer...
    - bobjordan 9y ago
      Definitely have suprising powers. I once sent a wire payment in USD from my Hong Kong company’s HSBC business bank account directly to my China company’s bank inside China, where my bank in China would convert it to renminbi. I was shocked to find out the bank wire was somehow held up in NYC! Blew my mind. Nothing to do with the USA in this transaction, except the USD. The reason the wire was held up? I had wrote the word “Grenade” in the notes field of the bank wire. The payment was a materials deposit for an action camera mount product we make at my factory called “Grenade Grip”. I regularly write the product name in the notes field for my accountants. Mistake.
      - mr_spothawk 9y ago
        Looks like I've got a new special alternative to "for a good time" to use in the memo field of all the checks I don't write anymore.
drcode 9y ago
Well, they definitely had many US customers until about a year ago, fwiw.
ttul 9y ago
If you touch United States dollars, then you are captured by United States regulators. The United States dollar system is only accessible via the federal reserve system, which is regulated by United States regulators.
mannykannot 9y ago
Glendower: I can call spirits from the vasty deep. Hotspur: Why, so can I, or so can any man; But will they come when you do call for them? William Shakespeare, Henry IV, Part I There are actually two issues here: Firstly, on what basis, under US law, does the CTFC have the authority to issue a subpoena, and secondly, whether, under international law or treaty, it has any power to compel compliance. The link in sna1l's post has something on both issues.
PeterisP 9y ago
There are two parts - one is the authority to request something (issue a subpoena) and the second is the ability to enforce penalties if the request is not satisfied. They have the authority to issue a subpoena because Bitfinex had US-based customers. The ability to enforce it is a bit trickier, but there are two things - first, it's plausible that they can get cooperation from local authorities; and second, they are able to seize USD transfers to/from them.
dustingetz 9y ago
no snark: if you wanna get into YC, and a YC partner calls you up and says Good news, You're in! Oh but we'll need you to cut ties with that local accelerator, theyre suing us and we don't want you to testify but no big deal now right? you're part of the YC family now!
0wing 9y ago
Tether is looking a lot like Liberty Reserve, and that ended in seizure of assets. https://en.wikipedia.org/wiki/Liberty_Reserve#2013_seizure https://en.wikipedia.org/wiki/Liberty_Reserve#2013_seizure
mtgx 9y ago
I'll hijack this thread so everyone gets to see this. STOP reading Bloomberg for cryptocurrency news! I don't know if they did this on purpose or not to manipulate the market and so some of their rich friends can get in at a cheaper price, but I find it quite unacceptable for a publication such as Bloomberg to mess up the fact that it was posting a two months old story. But that's not even the worst part. No, the worst part is that they edited the article to change the date but you won't see anywhere that this edit was made, except for this, which you probably wouldn't have noticed anyway: > Updated on January 31, 2018 I find that extremely unprofessional at the very least, if not malicious/manipulative, as I mentioned above. https://www.reddit.com/r/CryptoCurrency/comments/7u4fd5/we_are_being_played/ https://www.reddit.com/r/CryptoCurrency/comments/7u4fd5/we_a... Also, if I remember right, Bloomberg was one of the first to announce the fake South Korean cryptocurrency "ban", too, along with CNBC, which I believe was the first, and a few others, which may have just tried to "get there first", without actually verifying the story. So I would also say stay away from CNBC, they seem to be even worse, and you can tell from the way they write their headlines (always either in a panic or hype-inducing manner). Finally, as for Bitfinex and Tether itself, if they got the subpoena since early December, how were they still able to "print so much fake money" in January - unless maybe they can actually back those Tethers. I don't know, but it is an interesting theory: https://twitter.com/SatoshiLite/status/958427996209074176 https://twitter.com/SatoshiLite/status/958427996209074176
- JumpCrisscross 9y ago
  FYI, when people ask “why is a private transaction between two willing participants a problem,” this is why. Nobody blames themselves for getting duped into a scam. No, it’s Bloomberg’s fault for calling the spade a spade.
bobjordan 9y ago
In 2014, As I recall, they were based in Hong Kong. I registered a business account with them for my own Hong Kong company back then.

sna1l 9y ago

Seems 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 ago
I think of Edward Snowden. HK helped him.
- frakr 9y ago
  Did the gov there actually help him? Or just not hinder him?
  - quickthrower2 9y ago
    To not hinder is quite a lot of help. Considering it's going to piss off the superpower.
    - mar77i 9y ago
      Well 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.

hendzen 9y ago

Among many other reasons, due to the listing of Bitcoin futures on CBOE and CME the CFTC now has some oversight on the spot market.

jonknee 9y ago

They claim to have the USD in a bank somewhere which means the US can come after them. This is why Wells Fargo dumped them (which is saying something!).

koheripbal 9y ago
No. A foreign bank can hold USD without any US oversight.
- JumpCrisscross 9y ago
  > A foreign bank can hold USD without any US oversight If they hold it as hard cash, practically, sure. If they want to be allowed to send or receive wires and generally not get sanctioned by the United States, no. The U.S. Treasury claims international jurisdiction over U.S. dollars [1]. [1] https://cblr.columbia.edu/the-u-s-jurisdiction-over-transfers-of-u-s-dollars-between-foreigners-and-over-ownership-of-u-s-dollar-accounts-in-foreign-bans/ https://cblr.columbia.edu/the-u-s-jurisdiction-over-transfer...
  - bobjordan 9y ago
    Definitely have suprising powers. I once sent a wire payment in USD from my Hong Kong company’s HSBC business bank account directly to my China company’s bank inside China, where my bank in China would convert it to renminbi. I was shocked to find out the bank wire was somehow held up in NYC! Blew my mind. Nothing to do with the USA in this transaction, except the USD. The reason the wire was held up? I had wrote the word “Grenade” in the notes field of the bank wire. The payment was a materials deposit for an action camera mount product we make at my factory called “Grenade Grip”. I regularly write the product name in the notes field for my accountants. Mistake.
    - mr_spothawk 9y ago
      Looks like I've got a new special alternative to "for a good time" to use in the memo field of all the checks I don't write anymore.

drcode 9y ago

Well, they definitely had many US customers until about a year ago, fwiw.

ttul 9y ago

If you touch United States dollars, then you are captured by United States regulators. The United States dollar system is only accessible via the federal reserve system, which is regulated by United States regulators.

mannykannot 9y ago

Glendower: I can call spirits from the vasty deep. Hotspur: Why, so can I, or so can any man; But will they come when you do call for them? William Shakespeare, Henry IV, Part I There are actually two issues here: Firstly, on what basis, under US law, does the CTFC have the authority to issue a subpoena, and secondly, whether, under international law or treaty, it has any power to compel compliance. The link in sna1l's post has something on both issues.

PeterisP 9y ago

There are two parts - one is the authority to request something (issue a subpoena) and the second is the ability to enforce penalties if the request is not satisfied. They have the authority to issue a subpoena because Bitfinex had US-based customers. The ability to enforce it is a bit trickier, but there are two things - first, it's plausible that they can get cooperation from local authorities; and second, they are able to seize USD transfers to/from them.

dustingetz 9y ago

no snark: if you wanna get into YC, and a YC partner calls you up and says Good news, You're in! Oh but we'll need you to cut ties with that local accelerator, theyre suing us and we don't want you to testify but no big deal now right? you're part of the YC family now!

0wing 9y ago

Tether is looking a lot like Liberty Reserve, and that ended in seizure of assets. https://en.wikipedia.org/wiki/Liberty_Reserve#2013_seizure https://en.wikipedia.org/wiki/Liberty_Reserve#2013_seizure

mtgx 9y ago

I'll hijack this thread so everyone gets to see this. STOP reading Bloomberg for cryptocurrency news! I don't know if they did this on purpose or not to manipulate the market and so some of their rich friends can get in at a cheaper price, but I find it quite unacceptable for a publication such as Bloomberg to mess up the fact that it was posting a two months old story. But that's not even the worst part. No, the worst part is that they edited the article to change the date but you won't see anywhere that this edit was made, except for this, which you probably wouldn't have noticed anyway: > Updated on January 31, 2018 I find that extremely unprofessional at the very least, if not malicious/manipulative, as I mentioned above. https://www.reddit.com/r/CryptoCurrency/comments/7u4fd5/we_are_being_played/ https://www.reddit.com/r/CryptoCurrency/comments/7u4fd5/we_a... Also, if I remember right, Bloomberg was one of the first to announce the fake South Korean cryptocurrency "ban", too, along with CNBC, which I believe was the first, and a few others, which may have just tried to "get there first", without actually verifying the story. So I would also say stay away from CNBC, they seem to be even worse, and you can tell from the way they write their headlines (always either in a panic or hype-inducing manner). Finally, as for Bitfinex and Tether itself, if they got the subpoena since early December, how were they still able to "print so much fake money" in January - unless maybe they can actually back those Tethers. I don't know, but it is an interesting theory: https://twitter.com/SatoshiLite/status/958427996209074176 https://twitter.com/SatoshiLite/status/958427996209074176

JumpCrisscross 9y ago
FYI, when people ask “why is a private transaction between two willing participants a problem,” this is why. Nobody blames themselves for getting duped into a scam. No, it’s Bloomberg’s fault for calling the spade a spade.

bobjordan 9y ago

In 2014, As I recall, they were based in Hong Kong. I registered a business account with them for my own Hong Kong company back then.