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That is not strong evidence that they are not backed by USD. That is strong suspicion. > Lack of transparency does not necessarily indicate fraud https://blog

by craigc 8y ago

That is not strong evidence that they are not backed by USD. That is strong suspicion. > Lack of transparency does not necessarily indicate fraud https://blog.bitmex.com/tether/ https://blog.bitmex.com/tether/

Angostura 8y ago
Putting it another way, there is no evidence that Tethers are backed by dollars.
ceejayoz 8y ago
> Lack of transparency does not necessarily indicate fraud Fraudulently claiming "frequent professional audits" that don't exist is good evidence of fraud. So is having a big link "proof of funds" on the home page that links to https://tether.to/wp-content/uploads/2017/09/Final-Tether-Consulting-Report-9-15-17_Redacted.pdf https://tether.to/wp-content/uploads/2017/09/Final-Tether-Co... which says "not intended to be, and should not be, used or relied upon by [non-Tether parties]".
- craigc 8y ago
  Clearly we do not agree so it is not worth continuing to argue. Honestly, I just want this whole thing resolved one way or the other. I have no personal ties to Tether, and do not care if they are backed 1:1 with USD. I agree with you they should have an audit done to prove definitively one way or the other that they are backed by USD to put this entire thing to rest. As it is now, it keeps coming back up every few months in the media, and the narrative is getting old.
  - Nursie 8y ago
    Do you not think that perhaps the media should keep coming back to the possibility of multi-billion dollar fraud like this?
    - craigc 8y ago
      Valid point, but there are also billions of dollars created out of thin air by the Federal Reserve to pump up the stock market, and perhaps that deserves some media attention as well. https://suremoneyinvestor.com/2017/08/how-the-feds-money-printing-impacts-the-markets-and-what-it-means-for-you/ https://suremoneyinvestor.com/2017/08/how-the-feds-money-pri...
      - ceejayoz 8y ago
        Those actions did garner media attention. Massive amounts of it.
  - FireBeyond 8y ago
    Do you feel that the narrative about Theranos was getting old, too? Continued questions about fraud and deception?
jandrese 8y ago
Shouldn't it be incumbent on them to prove that they are backed by USD and not on me to disprove it? They are the ones making the extraordinary claim here. Given the little we do know about the company the most reasonable assumption is that it is a slightly reworked Ponzi scheme.
- craigc 8y ago
  What makes the claim extraordinary? If I wanted to make an easily tradable form of USD on the blockchain, I would take a similar approach. Take deposits in US Dollars and issue an equal number of “dollar backed coins” on the blockchain that can then be sent around from exchange to exchange. Nothing about that seems extraordinary to me. It is very likely the federal reserve is going to do something very similar in the coming years. They will also print more of their coin at will, but no one is going to make a stink about that cause they have already been doing it for a hundred years.
  - jandrese 8y ago
    The extraordinary claim that people pumped billions of real US dollars into an upstart exchange with no proper accounting.
    - craigc 8y ago
      Ahhhh. Okay that makes more sense. Although at the time they did have accounting and audits. The last audit was September 2017, I believe.
      - ceejayoz 8y ago
        No, Tether never completed an audit. Their auditor fired them. Their claimed "frequent professional audits" on the home page encompasses precisely zero completed audits. https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved/ https://www.coindesk.com/tether-confirms-relationship-audito... > Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame. As Tether is the first company in the space to undergo this process and pursue this level of transparency, there is no precedent set to guide the process nor any benchmark against which to measure its success.
FireBeyond 8y ago
Then they are doing a REALLY bad job at managing their presence, because "Transparency" is one of their hallmarks: https://wallet.tether.to/transparency https://wallet.tether.to/transparency ... supposedly. Those are very specific numbers to be touting without anything supporting them.
- qyv 8y ago
  People will simply look the other way on this as long as it benefits their worldview. Once things go south the cries will be "Tether lied to us, how could we have known?"
  - bripeace 8y ago
    I don't know. There's a certain level of cognitive dissonance required. They will say... Tether was FORCED to print, even if they didn't have the USD. The amount of FUD, and active attacks from the traditional banking system suppressed the price of bitcoin. Tether were trying to SAVE us... and so it goes.

by craigc 8y ago

Angostura 8y ago

Putting it another way, there is no evidence that Tethers are backed by dollars.

ceejayoz 8y ago

> Lack of transparency does not necessarily indicate fraud Fraudulently claiming "frequent professional audits" that don't exist is good evidence of fraud. So is having a big link "proof of funds" on the home page that links to https://tether.to/wp-content/uploads/2017/09/Final-Tether-Consulting-Report-9-15-17_Redacted.pdf https://tether.to/wp-content/uploads/2017/09/Final-Tether-Co... which says "not intended to be, and should not be, used or relied upon by [non-Tether parties]".

craigc 8y ago
Clearly we do not agree so it is not worth continuing to argue. Honestly, I just want this whole thing resolved one way or the other. I have no personal ties to Tether, and do not care if they are backed 1:1 with USD. I agree with you they should have an audit done to prove definitively one way or the other that they are backed by USD to put this entire thing to rest. As it is now, it keeps coming back up every few months in the media, and the narrative is getting old.
- Nursie 8y ago
  Do you not think that perhaps the media should keep coming back to the possibility of multi-billion dollar fraud like this?
  - craigc 8y ago
    Valid point, but there are also billions of dollars created out of thin air by the Federal Reserve to pump up the stock market, and perhaps that deserves some media attention as well. https://suremoneyinvestor.com/2017/08/how-the-feds-money-printing-impacts-the-markets-and-what-it-means-for-you/ https://suremoneyinvestor.com/2017/08/how-the-feds-money-pri...
    - ceejayoz 8y ago
      Those actions did garner media attention. Massive amounts of it.
- FireBeyond 8y ago
  Do you feel that the narrative about Theranos was getting old, too? Continued questions about fraud and deception?

jandrese 8y ago

Shouldn't it be incumbent on them to prove that they are backed by USD and not on me to disprove it? They are the ones making the extraordinary claim here. Given the little we do know about the company the most reasonable assumption is that it is a slightly reworked Ponzi scheme.

craigc 8y ago
What makes the claim extraordinary? If I wanted to make an easily tradable form of USD on the blockchain, I would take a similar approach. Take deposits in US Dollars and issue an equal number of “dollar backed coins” on the blockchain that can then be sent around from exchange to exchange. Nothing about that seems extraordinary to me. It is very likely the federal reserve is going to do something very similar in the coming years. They will also print more of their coin at will, but no one is going to make a stink about that cause they have already been doing it for a hundred years.
- jandrese 8y ago
  The extraordinary claim that people pumped billions of real US dollars into an upstart exchange with no proper accounting.
  - craigc 8y ago
    Ahhhh. Okay that makes more sense. Although at the time they did have accounting and audits. The last audit was September 2017, I believe.
    - ceejayoz 8y ago
      No, Tether never completed an audit. Their auditor fired them. Their claimed "frequent professional audits" on the home page encompasses precisely zero completed audits. https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved/ https://www.coindesk.com/tether-confirms-relationship-audito... > Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame. As Tether is the first company in the space to undergo this process and pursue this level of transparency, there is no precedent set to guide the process nor any benchmark against which to measure its success.

FireBeyond 8y ago

Then they are doing a REALLY bad job at managing their presence, because "Transparency" is one of their hallmarks: https://wallet.tether.to/transparency https://wallet.tether.to/transparency ... supposedly. Those are very specific numbers to be touting without anything supporting them.

qyv 8y ago
People will simply look the other way on this as long as it benefits their worldview. Once things go south the cries will be "Tether lied to us, how could we have known?"
- bripeace 8y ago
  I don't know. There's a certain level of cognitive dissonance required. They will say... Tether was FORCED to print, even if they didn't have the USD. The amount of FUD, and active attacks from the traditional banking system suppressed the price of bitcoin. Tether were trying to SAVE us... and so it goes.