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Couldnt they simply borrow $2.55 billion for a day, put it in a bank account, show lawyer, then transfer it out? Such as borrow from the company founders who h

Couldnt they simply borrow $2.55 billion for a day, put it in a bank account, show lawyer, then transfer it out? Such as borrow from the company founders who have made a fortune selling tether?

madeuptempacct 8y ago
I don't think amounts like that are easy to borrow for anyone who isn't a huge corp.
mikeyouse 8y ago
Yeah without a full audit, it’s impossible to say. This is only one part of their balance sheet, aka the assets. The liabilities and owners equity are still a mystery. As are the names of their banks. None of that is very reassuring.
- sanxiyn 8y ago
  On the other hand, the report does state balance is unencumbered. So if you trust the report (if you don't, anything goes), it is not the case that Tether borrowed $2.55B for a day. At least it's not that simple.
  - mikeyouse 8y ago
    I actually spent the last few weeks preparing an audit for a company within an order of magnitude of assets. I’ll give the report a more thorough read later on. As a side note though, the organization I work for takes in client funds and then grants them out to nonprofits. Technically all of our assets are legally unencumbered but our clients absolutely expect to have access to them. The definition of unencumbered depends on the internal lawyers’ views of their commitment to any clients and investors.
everdev 8y ago
> as of June 1st, 2018 Is repeated multiple times in the articles and the lawyers statements. Smells like a case of an idea getting ahead of the legal requirements and trying to catch up after the fact. Are there any reporting requirements around large loans/investments? I wonder if someone can publicly trace where these $2B came from and when.
sonnyblarney 8y ago
To generalize the issues is not 'the reserves' it's the terms attached to them. When, from whom, for what period, under what conditions yada yada. A single sentence in a contract from a lender could nullify everything effectively making it all for show. The reason the report was from a 'high profile firm' might be because they are trying to make a political/news/pop-culture statement to the masses of users, investors and techies, as opposed to a strictly legal one to would be SEC or auditors or whatever.
bmelton 8y ago
I dunno who gets a loan for $2.55 billion without showing sizable assets... somewhere, but the fact that the money is in separate accounts reminds me of a story. There was a car-maker (I wish I could remember who -- I want to say Audi, but that feels wrong) who was trying to get their car entered into a race. The requirements for the race was that the car had to be a production car, and of course there's wasn't, so they made just enough (I think it was 50) to get classified as production. Well, they didn't meet the production quota, and when the inspectors came by to check, they showed them the 30 or so cars they had made, but told them the other cars were at a different lot. "Let's go there now, only maybe we'll stop off for lunch on the way," while every employee they had was tasked with moving one of the 30 cars to the second lot so that when the inspectors arrivd, the first 30 + the second 30 was definitely greater than 60. Edit: If anyone remembers the story better, I'd love a refresher on it. I can't remember where I heard it from, but it was probably either a Netflix documentary or The Grand Tour on Amazon.
- akcreek 8y ago
  I don't know that story, but it reminds me of one I heard about Theranos where they would demo their technology for investors, partners, etc. Supposedly they would take the blood sample then say let's tour the facility, meet Elizabeth, etc. while the machine does it's work... the rest of the story is the same as yours.
- thereisnospork 8y ago
  Its Lancia you are thinking of: https://www.facebook.com/thegrandtour/videos/732926230239254/ https://www.facebook.com/thegrandtour/videos/732926230239254...
  - bmelton 8y ago
    Indeed it is. I can't thank you enough!
  - Theodores 8y ago
    https://historicdb.fia.com/sites/default/files/car_attachment/1486729201/homologation_form_number_276_group_b.pdf https://historicdb.fia.com/sites/default/files/car_attachmen... There is the paperwork for you from the FIA database. If you like your cars then you could be there for a while. https://historicdb.fia.com/ https://historicdb.fia.com/

Couldnt they simply borrow $2.55 billion for a day, put it in a bank account, show lawyer, then transfer it out? Such as borrow from the company founders who have made a fortune selling tether?

madeuptempacct 8y ago

I don't think amounts like that are easy to borrow for anyone who isn't a huge corp.

mikeyouse 8y ago

Yeah without a full audit, it’s impossible to say. This is only one part of their balance sheet, aka the assets. The liabilities and owners equity are still a mystery. As are the names of their banks. None of that is very reassuring.

sanxiyn 8y ago
On the other hand, the report does state balance is unencumbered. So if you trust the report (if you don't, anything goes), it is not the case that Tether borrowed $2.55B for a day. At least it's not that simple.
- mikeyouse 8y ago
  I actually spent the last few weeks preparing an audit for a company within an order of magnitude of assets. I’ll give the report a more thorough read later on. As a side note though, the organization I work for takes in client funds and then grants them out to nonprofits. Technically all of our assets are legally unencumbered but our clients absolutely expect to have access to them. The definition of unencumbered depends on the internal lawyers’ views of their commitment to any clients and investors.

everdev 8y ago

> as of June 1st, 2018 Is repeated multiple times in the articles and the lawyers statements. Smells like a case of an idea getting ahead of the legal requirements and trying to catch up after the fact. Are there any reporting requirements around large loans/investments? I wonder if someone can publicly trace where these $2B came from and when.

sonnyblarney 8y ago

To generalize the issues is not 'the reserves' it's the terms attached to them. When, from whom, for what period, under what conditions yada yada. A single sentence in a contract from a lender could nullify everything effectively making it all for show. The reason the report was from a 'high profile firm' might be because they are trying to make a political/news/pop-culture statement to the masses of users, investors and techies, as opposed to a strictly legal one to would be SEC or auditors or whatever.

bmelton 8y ago

I dunno who gets a loan for $2.55 billion without showing sizable assets... somewhere, but the fact that the money is in separate accounts reminds me of a story. There was a car-maker (I wish I could remember who -- I want to say Audi, but that feels wrong) who was trying to get their car entered into a race. The requirements for the race was that the car had to be a production car, and of course there's wasn't, so they made just enough (I think it was 50) to get classified as production. Well, they didn't meet the production quota, and when the inspectors came by to check, they showed them the 30 or so cars they had made, but told them the other cars were at a different lot. "Let's go there now, only maybe we'll stop off for lunch on the way," while every employee they had was tasked with moving one of the 30 cars to the second lot so that when the inspectors arrivd, the first 30 + the second 30 was definitely greater than 60. Edit: If anyone remembers the story better, I'd love a refresher on it. I can't remember where I heard it from, but it was probably either a Netflix documentary or The Grand Tour on Amazon.

akcreek 8y ago
I don't know that story, but it reminds me of one I heard about Theranos where they would demo their technology for investors, partners, etc. Supposedly they would take the blood sample then say let's tour the facility, meet Elizabeth, etc. while the machine does it's work... the rest of the story is the same as yours.
thereisnospork 8y ago
Its Lancia you are thinking of: https://www.facebook.com/thegrandtour/videos/732926230239254/ https://www.facebook.com/thegrandtour/videos/732926230239254...
- bmelton 8y ago
  Indeed it is. I can't thank you enough!
- Theodores 8y ago
  https://historicdb.fia.com/sites/default/files/car_attachment/1486729201/homologation_form_number_276_group_b.pdf https://historicdb.fia.com/sites/default/files/car_attachmen... There is the paperwork for you from the FIA database. If you like your cars then you could be there for a while. https://historicdb.fia.com/ https://historicdb.fia.com/