6 ms·

Bitfinex will no longer treat Tether as 1:1 conversion

patio11 8y ago
A link direct to the announcement for the curious: https://www.bitfinex.com/posts/319 https://www.bitfinex.com/posts/319
ForHackernews 8y ago
It's not like Bitfinex has ever allowed anyone to cash out their USDT for USD (despite claims to the contrary) so maybe this is just them coming clean about that fact? They've also removed (false) claims about being audited from their FAQs section[0] [0] https://tether.to/faqs/ https://tether.to/faqs/ vs https://web.archive.org/web/20180628141947/https://tether.to/faqs/ https://web.archive.org/web/20180628141947/https://tether.to...
- andrewla 8y ago
  I haven't been able to test this directly since I'm in New York and therefore am not allowed to have an account on Bitfinex, but nobody has reported withdrawal difficulties in a very long time, and Bitfinex has always treated USDT deposits as USD without any explicit or implicit conversion. Bitfinex has had withdrawal problems and banking problems in the past, but to my knowledge the only recent problems have been around times when USD/USDT has disconnected, largely due to delays in Bitfinex's fiat withdrawal pipeline that have all since been resolved.
  - stephen_g 8y ago
    What is your source for nobody having any withdraw difficulties? I'm seeing heaps of USD withdraw problems on various twitter feeds that track this kind of thing. BTC withdraw etc. seems to be working fine but not USD.
  - nosuchthing 8y ago
    Bitfinex's entire subreddit is full of users with unprocessed withdraw issues. https://reddit.com/r/bitfinex/ https://reddit.com/r/bitfinex/
    - andrewla 8y ago
      You're right -- I hadn't realized that we're currently in a regime of tether being discounted and withdrawals being slow or not working. After the previous discount recovered the withdrawal problems went away (obviously correlation running in the other direction), but I hadn't been tracking that the discount has reappeared. Outside of periods of withdrawal difficulty, though, the reports slow to a trickle and then dry up. It would be interesting to pull the history of the bitfinex sub and plot the frequency of posts mentioning "withdraw" against the kraken USDT/USD pair to get hard data on this rather than my anecdotes, though.
raverbashing 8y ago
Oh so all of those who had kept money as usdt will have their money devalued. Nice Remember, the longer you stay the more money you can lose This will be fun to watch
- sp332 8y ago
  Unless they've already changed the exchange rate, it looks like they cashed out everyone's Tether balances to fiat? Any Tether deposits initiated before 14:30:00 UTC on the 27th of November will be credited to the user's fiat wallet balances
  - JumpCrisscross 8y ago
    > they cashed out everyone's Tether balances to fiat? "Cashing out" means receiving hard currency. It appears Bitfinex plans on converting Tether balances into Bitfinex brokerage balances. This still depends on Bitfinex paying out dollars for its obligations, regardless of whether they're cryptocurrency Tethers or broker balance entries in a spreadsheet.
- andrewla 8y ago
  The actual announcement was linked above. Any time before the cutoff Bitfinex will continue to support USDT:USD at parity, and all USD and EUR deposits will be denominated in the fiat currency, not the tether equivalent.
  - deleted 8y ago
    [deleted]
  - JumpCrisscross 8y ago
    > Any time before the cutoff Bitfinex will continue to support USDT:USD at parity What does "support" mean? I thought it was notoriously difficult to convert Tether into hard currency. > all USD and EUR deposits will be denominated in the fiat currency Will previous deposits, which were held as Tether, be converted into hard currency? (Bitfinex has recently been having issues redeeming hard currency deposits [1].) The cynic in me sees Bitfinex attempting to convert Tether, a secured redeemable obligation, into brokerage deposits, unsecured obligations in most jurisdictions. [1] https://www.coindesk.com/for-bitfinex-users-dollar-withdrawals-are-now-a-weeks-long-struggle https://www.coindesk.com/for-bitfinex-users-dollar-withdrawa...
gwbas1c 8y ago
So basically, any slight deviation from 1:1 is similar to a transaction fee?
- mhluongo 8y ago
  No- the market will buy and sell Tether at the market-discovered price- which means it's no longer centrally "pegged" by Bitfinex. This could be because they want to better take advantage of the difference in price themselves, knowing that their books are good and that the token is backed- or, following the narrative, it's because the token isn't 1:1 backed. Either way, this further erodes trust in Tether
  - chrisco255 8y ago
    No they're making easier to withdraw USDT to fiat, minus a 0.4%-1% fee. All indications are that they do in fact have $2B in cash on hand to back the USDT in circulation: https://tether.to/wp-content/uploads/2018/11/Tether-Letter.pdf https://tether.to/wp-content/uploads/2018/11/Tether-Letter.p...
    - JumpCrisscross 8y ago
      > All indications are that they do in fact have $2B in cash on hand No-liability letter showing a point-in-time portfolio cash position from a bank in The Bahamas posted to Tether's domain is a far cry from sound. It's not nothing. But it's trivial to manufacture with an overnight loan--that's why banks get audited.
    - User9991 8y ago
      Yes, BTC and other crypto are down 80-90% in a matter of weeks, but this is Bitfinex making it "easier" to withdraw your money. Are you gullible or trying to deceive others to save yourself?
      - chrisco255 8y ago
        They're not down 80%-90% within weeks. BTC has been on a year long decline from it's $19K peak this time last year. I'm not gullible, people are withdrawing USD using USDT. Thats a stable coin acting as advertised. I've never owned any Tether. But I've never seen so much FUD. Personally, I'm going to be getting some DAI as a stable coin as I like and trust it's decentralized system much better.
rememberlenny 8y ago
Can someone explain why this is important?
- mhluongo 8y ago
  There's a narrative that Bitfinex/Tether drove up the price of crypto fraudulently, and that USDT is not 1:1 backed by fiat. Not weighing in on it either way, but issues with Tether have been a sword of Damocles of the crypto market for a while. Bitfinex'd on Twitter[0] has all sorts of speculation if you want to get into it. [0] - https://twitter.com/bitfinexed https://twitter.com/bitfinexed
- patio11 8y ago
  Bitfinex is the same operation as Tether (commingled ownership and common control). Tether’s product is the eponymous “stablecoin” which promises that each USDT is backed by $1 USD sitting in a bank account and available for withdraw on demand. This promise is a lie. This announcement walks back the lie. This is very important for the cryptocurrency ecosystem, because Bitfinex is a large exchange, liquidity provider, counterparty, and (I strongly suspect) lender. If they are factually insolvent or fail in a bank run, that is a Very Big Deal, at least insofar as anyone cares about cryptocurrency.
  - wild_preference 8y ago
    https://twitter.com/patio11/status/1051560132235030528 https://twitter.com/patio11/status/1051560132235030528 > Tether ... is currently in the early stages of a bank run. Still think that's true? As for this news, as long as they're honoring withdrawals, it's a good thing. Before, tether was relying on bitfinex to convert to usd. https://tether.to/tether-reopens-account-verification-and-direct-redemption-of-fiat-from-its-platform/ https://tether.to/tether-reopens-account-verification-and-di...
- chrisco255 8y ago
  Tether has been viewed as a weak-link in the crypto ecosystem and rumors of a potential Tether "scam" have swirled around since at least last year. People have speculated that Bitfinex (the company behind Tether) did not have the $2B in cash on hand to back the $2B worth of Tether (symbol: USDT which is supposed to trade at roughly 1:1 with the USD) in circulation. They were subpoenaed, but so far no charges have been brought against them. It also looks like they recently changed banks, with Tether now using Deltec [1][2], a 72-year old Bahamas-based institution registered with the Financial Crimes Enforcement Network of the US Department of the Treasury. As far as that goes, I think it's a good thing that Tether has established a relationship with a reputable institution. It also shows that they are committed to anti-money laundering. As far as fees go, it looks like unless you've got more than $1 million in USDT, you're looking at 0.4%-1% withdrawal fees. Meh. I mean, doesn't sound terrible...and honestly, it seems less and less likely now that USDT will crash the market (not that it needs any help with that at the moment). [1] https://tether.to/tether-banking-relationship-announced/ https://tether.to/tether-banking-relationship-announced/ [2] https://www.deltecbank.com/ https://www.deltecbank.com/
deweller 8y ago
Tether just opened up a platform for withdrawing fiat USD directly from them: https://tether.to/tether-reopens-account-verification-and-direct-redemption-of-fiat-from-its-platform/ https://tether.to/tether-reopens-account-verification-and-di... > This update allows the immediate withdrawal of Tether to fiat (1:1), with the ability to acquire coming soon. So Tether still backs the USDT 1:1 by fiat while Bitfinex just becomes another trading market. Other exchanges already have USDT markets that change in value. This event is not the "de-tethering of Tether." It is returning the responsibility of backing USDT to Tether.
- JumpCrisscross 8y ago
  > Tether still backs the USDT 1:1 by fiat while Bitfinex just becomes another trading market We don't have any evidence Tether has hard currency backing its Tether. We do know Tether and Bitfinex are under investigation in multiple jurisdictions, and that brokerage deposits are less protected than obligations marketed as being freely redeemable or secured (as Tether was). At the end of the day, Bitfinex and Tether are intrinsically and ambiguously linked, a combination that does not inspire confidence.
  - jpmattia 8y ago
    > We don't have any evidence Tether has hard currency backing its Tether. We have some evidence: The CFTC subpoena was about a year ago, and it is hard to imagine that they would not have 1. Subpoenaed bank statements to support the backing, and 2. Let tether continue operation if the support was lacking. So it's possible that the CFTC was snookered somehow, but they're not known for being patsies when it comes to obvious fraud. The investigations for manipulation are more complicated, and it is easy to imagine that it takes a year to iron that out, but a simple balance check? Hard to imagine that's not already complete.
    - JumpCrisscross 8y ago
      > CFTC subpoena was about a year ago, and it is hard to imagine that they would not have These investigations take years, particularly when you have a non-bank regulator like the CFTC trying to get information from foreign banks.
carrja99 8y ago
Honest question... did tether ever allow people to create accounts? As far as I can tell he only way to buy tether has been via exchanges... even at this time last year their "create a new account" form was disabled.
- wmf 8y ago
  Just updated: https://tether.to/tether-reopens-account-verification-and-direct-redemption-of-fiat-from-its-platform/ https://tether.to/tether-reopens-account-verification-and-di...
jcfrei 8y ago
So, is the Bitfinex BTC/USD market now a USD or USDT market? The price premium compared to other exchanges indicates it's a BTC/USDT market yet it's called BTC/USD. Has anyone sold BTC on bitfinex? Do you get USDT or USD?
deleted 8y ago
[deleted]
alistproducer2 8y ago
I find it curious that there isn't any analysis suspecting the BTC crash to the breaking of the USDT peg. It started a couple weeks ago and now USDT is routinely trading at a discount relative to $1. There were a ton of articles in 2017 speculating that the bubble was being directly inflated by USDT printing and when the peg broke BTC would crash[0]. Now that those things have happened - silence. [0]: http://fortune.com/2017/12/05/bitcoin-btc-price-usd-tether-limited-bitfinex/ http://fortune.com/2017/12/05/bitcoin-btc-price-usd-tether-l...
- User9991 8y ago
  Silence? No analysis? Prices on every crypto are down massively. This news is hours fresh. What are you talking about? What are your expectations here? Was this not a crash?
arisAlexis 8y ago
This is a well known Twitter account with no other purpose that tweeting 3times per dat for 2 years stuff about Tether which proved reserves last week again. I would be cautious about alterior motives. Those accusing or manipulation can be the manipulators in disguise.

A link direct to the announcement for the curious: https://www.bitfinex.com/posts/319 https://www.bitfinex.com/posts/319

ForHackernews 8y ago

It's not like Bitfinex has ever allowed anyone to cash out their USDT for USD (despite claims to the contrary) so maybe this is just them coming clean about that fact? They've also removed (false) claims about being audited from their FAQs section[0] [0] https://tether.to/faqs/ https://tether.to/faqs/ vs https://web.archive.org/web/20180628141947/https://tether.to/faqs/ https://web.archive.org/web/20180628141947/https://tether.to...

andrewla 8y ago
I haven't been able to test this directly since I'm in New York and therefore am not allowed to have an account on Bitfinex, but nobody has reported withdrawal difficulties in a very long time, and Bitfinex has always treated USDT deposits as USD without any explicit or implicit conversion. Bitfinex has had withdrawal problems and banking problems in the past, but to my knowledge the only recent problems have been around times when USD/USDT has disconnected, largely due to delays in Bitfinex's fiat withdrawal pipeline that have all since been resolved.
- stephen_g 8y ago
  What is your source for nobody having any withdraw difficulties? I'm seeing heaps of USD withdraw problems on various twitter feeds that track this kind of thing. BTC withdraw etc. seems to be working fine but not USD.
- nosuchthing 8y ago
  Bitfinex's entire subreddit is full of users with unprocessed withdraw issues. https://reddit.com/r/bitfinex/ https://reddit.com/r/bitfinex/
  - andrewla 8y ago
    You're right -- I hadn't realized that we're currently in a regime of tether being discounted and withdrawals being slow or not working. After the previous discount recovered the withdrawal problems went away (obviously correlation running in the other direction), but I hadn't been tracking that the discount has reappeared. Outside of periods of withdrawal difficulty, though, the reports slow to a trickle and then dry up. It would be interesting to pull the history of the bitfinex sub and plot the frequency of posts mentioning "withdraw" against the kraken USDT/USD pair to get hard data on this rather than my anecdotes, though.

raverbashing 8y ago

Oh so all of those who had kept money as usdt will have their money devalued. Nice Remember, the longer you stay the more money you can lose This will be fun to watch

sp332 8y ago
Unless they've already changed the exchange rate, it looks like they cashed out everyone's Tether balances to fiat? Any Tether deposits initiated before 14:30:00 UTC on the 27th of November will be credited to the user's fiat wallet balances
- JumpCrisscross 8y ago
  > they cashed out everyone's Tether balances to fiat? "Cashing out" means receiving hard currency. It appears Bitfinex plans on converting Tether balances into Bitfinex brokerage balances. This still depends on Bitfinex paying out dollars for its obligations, regardless of whether they're cryptocurrency Tethers or broker balance entries in a spreadsheet.
andrewla 8y ago
The actual announcement was linked above. Any time before the cutoff Bitfinex will continue to support USDT:USD at parity, and all USD and EUR deposits will be denominated in the fiat currency, not the tether equivalent.
- deleted 8y ago
  [deleted]
- JumpCrisscross 8y ago
  > Any time before the cutoff Bitfinex will continue to support USDT:USD at parity What does "support" mean? I thought it was notoriously difficult to convert Tether into hard currency. > all USD and EUR deposits will be denominated in the fiat currency Will previous deposits, which were held as Tether, be converted into hard currency? (Bitfinex has recently been having issues redeeming hard currency deposits [1].) The cynic in me sees Bitfinex attempting to convert Tether, a secured redeemable obligation, into brokerage deposits, unsecured obligations in most jurisdictions. [1] https://www.coindesk.com/for-bitfinex-users-dollar-withdrawals-are-now-a-weeks-long-struggle https://www.coindesk.com/for-bitfinex-users-dollar-withdrawa...

gwbas1c 8y ago

So basically, any slight deviation from 1:1 is similar to a transaction fee?

mhluongo 8y ago
No- the market will buy and sell Tether at the market-discovered price- which means it's no longer centrally "pegged" by Bitfinex. This could be because they want to better take advantage of the difference in price themselves, knowing that their books are good and that the token is backed- or, following the narrative, it's because the token isn't 1:1 backed. Either way, this further erodes trust in Tether
- chrisco255 8y ago
  No they're making easier to withdraw USDT to fiat, minus a 0.4%-1% fee. All indications are that they do in fact have $2B in cash on hand to back the USDT in circulation: https://tether.to/wp-content/uploads/2018/11/Tether-Letter.pdf https://tether.to/wp-content/uploads/2018/11/Tether-Letter.p...
  - JumpCrisscross 8y ago
    > All indications are that they do in fact have $2B in cash on hand No-liability letter showing a point-in-time portfolio cash position from a bank in The Bahamas posted to Tether's domain is a far cry from sound. It's not nothing. But it's trivial to manufacture with an overnight loan--that's why banks get audited.
  - User9991 8y ago
    Yes, BTC and other crypto are down 80-90% in a matter of weeks, but this is Bitfinex making it "easier" to withdraw your money. Are you gullible or trying to deceive others to save yourself?
    - chrisco255 8y ago
      They're not down 80%-90% within weeks. BTC has been on a year long decline from it's $19K peak this time last year. I'm not gullible, people are withdrawing USD using USDT. Thats a stable coin acting as advertised. I've never owned any Tether. But I've never seen so much FUD. Personally, I'm going to be getting some DAI as a stable coin as I like and trust it's decentralized system much better.

rememberlenny 8y ago

Can someone explain why this is important?

mhluongo 8y ago
There's a narrative that Bitfinex/Tether drove up the price of crypto fraudulently, and that USDT is not 1:1 backed by fiat. Not weighing in on it either way, but issues with Tether have been a sword of Damocles of the crypto market for a while. Bitfinex'd on Twitter[0] has all sorts of speculation if you want to get into it. [0] - https://twitter.com/bitfinexed https://twitter.com/bitfinexed
patio11 8y ago
Bitfinex is the same operation as Tether (commingled ownership and common control). Tether’s product is the eponymous “stablecoin” which promises that each USDT is backed by $1 USD sitting in a bank account and available for withdraw on demand. This promise is a lie. This announcement walks back the lie. This is very important for the cryptocurrency ecosystem, because Bitfinex is a large exchange, liquidity provider, counterparty, and (I strongly suspect) lender. If they are factually insolvent or fail in a bank run, that is a Very Big Deal, at least insofar as anyone cares about cryptocurrency.
- wild_preference 8y ago
  https://twitter.com/patio11/status/1051560132235030528 https://twitter.com/patio11/status/1051560132235030528 > Tether ... is currently in the early stages of a bank run. Still think that's true? As for this news, as long as they're honoring withdrawals, it's a good thing. Before, tether was relying on bitfinex to convert to usd. https://tether.to/tether-reopens-account-verification-and-direct-redemption-of-fiat-from-its-platform/ https://tether.to/tether-reopens-account-verification-and-di...
chrisco255 8y ago
Tether has been viewed as a weak-link in the crypto ecosystem and rumors of a potential Tether "scam" have swirled around since at least last year. People have speculated that Bitfinex (the company behind Tether) did not have the $2B in cash on hand to back the $2B worth of Tether (symbol: USDT which is supposed to trade at roughly 1:1 with the USD) in circulation. They were subpoenaed, but so far no charges have been brought against them. It also looks like they recently changed banks, with Tether now using Deltec [1][2], a 72-year old Bahamas-based institution registered with the Financial Crimes Enforcement Network of the US Department of the Treasury. As far as that goes, I think it's a good thing that Tether has established a relationship with a reputable institution. It also shows that they are committed to anti-money laundering. As far as fees go, it looks like unless you've got more than $1 million in USDT, you're looking at 0.4%-1% withdrawal fees. Meh. I mean, doesn't sound terrible...and honestly, it seems less and less likely now that USDT will crash the market (not that it needs any help with that at the moment). [1] https://tether.to/tether-banking-relationship-announced/ https://tether.to/tether-banking-relationship-announced/ [2] https://www.deltecbank.com/ https://www.deltecbank.com/

deweller 8y ago

Tether just opened up a platform for withdrawing fiat USD directly from them: https://tether.to/tether-reopens-account-verification-and-direct-redemption-of-fiat-from-its-platform/ https://tether.to/tether-reopens-account-verification-and-di... > This update allows the immediate withdrawal of Tether to fiat (1:1), with the ability to acquire coming soon. So Tether still backs the USDT 1:1 by fiat while Bitfinex just becomes another trading market. Other exchanges already have USDT markets that change in value. This event is not the "de-tethering of Tether." It is returning the responsibility of backing USDT to Tether.

JumpCrisscross 8y ago
> Tether still backs the USDT 1:1 by fiat while Bitfinex just becomes another trading market We don't have any evidence Tether has hard currency backing its Tether. We do know Tether and Bitfinex are under investigation in multiple jurisdictions, and that brokerage deposits are less protected than obligations marketed as being freely redeemable or secured (as Tether was). At the end of the day, Bitfinex and Tether are intrinsically and ambiguously linked, a combination that does not inspire confidence.
- jpmattia 8y ago
  > We don't have any evidence Tether has hard currency backing its Tether. We have some evidence: The CFTC subpoena was about a year ago, and it is hard to imagine that they would not have 1. Subpoenaed bank statements to support the backing, and 2. Let tether continue operation if the support was lacking. So it's possible that the CFTC was snookered somehow, but they're not known for being patsies when it comes to obvious fraud. The investigations for manipulation are more complicated, and it is easy to imagine that it takes a year to iron that out, but a simple balance check? Hard to imagine that's not already complete.
  - JumpCrisscross 8y ago
    > CFTC subpoena was about a year ago, and it is hard to imagine that they would not have These investigations take years, particularly when you have a non-bank regulator like the CFTC trying to get information from foreign banks.

carrja99 8y ago

Honest question... did tether ever allow people to create accounts? As far as I can tell he only way to buy tether has been via exchanges... even at this time last year their "create a new account" form was disabled.

wmf 8y ago
Just updated: https://tether.to/tether-reopens-account-verification-and-direct-redemption-of-fiat-from-its-platform/ https://tether.to/tether-reopens-account-verification-and-di...

jcfrei 8y ago

So, is the Bitfinex BTC/USD market now a USD or USDT market? The price premium compared to other exchanges indicates it's a BTC/USDT market yet it's called BTC/USD. Has anyone sold BTC on bitfinex? Do you get USDT or USD?

deleted 8y ago

[deleted]

alistproducer2 8y ago

I find it curious that there isn't any analysis suspecting the BTC crash to the breaking of the USDT peg. It started a couple weeks ago and now USDT is routinely trading at a discount relative to $1. There were a ton of articles in 2017 speculating that the bubble was being directly inflated by USDT printing and when the peg broke BTC would crash[0]. Now that those things have happened - silence. [0]: http://fortune.com/2017/12/05/bitcoin-btc-price-usd-tether-limited-bitfinex/ http://fortune.com/2017/12/05/bitcoin-btc-price-usd-tether-l...

User9991 8y ago
Silence? No analysis? Prices on every crypto are down massively. This news is hours fresh. What are you talking about? What are your expectations here? Was this not a crash?

arisAlexis 8y ago

This is a well known Twitter account with no other purpose that tweeting 3times per dat for 2 years stuff about Tether which proved reserves last week again. I would be cautious about alterior motives. Those accusing or manipulation can be the manipulators in disguise.