3 ms·

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/
- nosuchthing 8y ago
  "a reputable institution" for off shore banking and money laundering currently under investigation. https://thebitcoinnews.com/brazil-tether039s-new-banking-partner-deltec-suspected-of-accepting-laundered-funds/ https://thebitcoinnews.com/brazil-tether039s-new-banking-par... https://www.livebitcoinnews.com/tethers-new-banker-in-the-crosshairs-of-the-u-s-government-for-money-laundering/ https://www.livebitcoinnews.com/tethers-new-banker-in-the-cr...
  - chrisco255 8y ago
    https://www.bitcoininsider.org/article/46790/deltec-bank-trust-issues-public-denial-venezuelan-money-laundering-scheme-involvement https://www.bitcoininsider.org/article/46790/deltec-bank-tru... https://bitcoinexchangeguide.com/deltec-bank-trust-issues-public-denial-of-venezuelan-money-laundering-scheme-involvement/ https://bitcoinexchangeguide.com/deltec-bank-trust-issues-pu... Ok, so criminal gets caught, authorities order seizure of Venezuelan's assets held in bank...bank complies with authorities. Yawn. Got any more FUD?
    - nosuchthing 8y ago
      Sure In early April, unconfirmed rumors swirled around €400 million said to have been seized by Polish authorities that were alleged to be tied to Bitfinex. As reported on CoinTelegraph, the funds, claimed to be held in Bank Spoldzielczy, were said to link Bitfinex to suspicious activities in Colombia. https://modernconsensus.com/cryptocurrencies/bitcoin/bitfinex-tether-investigation/ https://modernconsensus.com/cryptocurrencies/bitcoin/bitfine... https://cointelegraph.com/news/bitfinex-in-poland-were-there-money-laundering-links https://cointelegraph.com/news/bitfinex-in-poland-were-there... Sure sounds like Bitfinex is having a reoccurring theme of having their bank accounts shut down, and then finding banks in weird locations only to get them shut down within a month or two. https://finance.yahoo.com/news/tether-found-bank-might-bahamas-181859081.html https://finance.yahoo.com/news/tether-found-bank-might-baham... “This banking information is commercially sensitive and confidential. You should be very careful with this information. You are asked to keep this information to yourself and to not share it except with your financial institution. Divulging this information could damage not just yourself and Bitfinex, but the entire digital token ecosystem. Accordingly, you are cautioned that there may be serious negative effects associated with this information becoming public.” Seems legit https://medium.com/@bitfinexed/bitfinex-and-tether-is-unauditable-why-they-will-never-do-a-real-audit-3324e002b185 https://medium.com/@bitfinexed/bitfinex-and-tether-is-unaudi... Tether auditor distances itself after publishing "not an audit" and then "Friedman Quietly Removes Bitfinex Mentions" A brief announcement posted on Friedman’s own site, dated May 8th 2017 and titled “Friedman Selected as Crypto-Savvy Auditor by Bitfinex” now links to a 404 page. For the record, here’s an archived version. https://web.archive.org/web/20171129082053/http://www.friedmanllp.com:80/insights/auditor-engagement https://web.archive.org/web/20171129082053/http://www.friedm...

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/

nosuchthing 8y ago
"a reputable institution" for off shore banking and money laundering currently under investigation. https://thebitcoinnews.com/brazil-tether039s-new-banking-partner-deltec-suspected-of-accepting-laundered-funds/ https://thebitcoinnews.com/brazil-tether039s-new-banking-par... https://www.livebitcoinnews.com/tethers-new-banker-in-the-crosshairs-of-the-u-s-government-for-money-laundering/ https://www.livebitcoinnews.com/tethers-new-banker-in-the-cr...
- chrisco255 8y ago
  https://www.bitcoininsider.org/article/46790/deltec-bank-trust-issues-public-denial-venezuelan-money-laundering-scheme-involvement https://www.bitcoininsider.org/article/46790/deltec-bank-tru... https://bitcoinexchangeguide.com/deltec-bank-trust-issues-public-denial-of-venezuelan-money-laundering-scheme-involvement/ https://bitcoinexchangeguide.com/deltec-bank-trust-issues-pu... Ok, so criminal gets caught, authorities order seizure of Venezuelan's assets held in bank...bank complies with authorities. Yawn. Got any more FUD?
  - nosuchthing 8y ago
    Sure In early April, unconfirmed rumors swirled around €400 million said to have been seized by Polish authorities that were alleged to be tied to Bitfinex. As reported on CoinTelegraph, the funds, claimed to be held in Bank Spoldzielczy, were said to link Bitfinex to suspicious activities in Colombia. https://modernconsensus.com/cryptocurrencies/bitcoin/bitfinex-tether-investigation/ https://modernconsensus.com/cryptocurrencies/bitcoin/bitfine... https://cointelegraph.com/news/bitfinex-in-poland-were-there-money-laundering-links https://cointelegraph.com/news/bitfinex-in-poland-were-there... Sure sounds like Bitfinex is having a reoccurring theme of having their bank accounts shut down, and then finding banks in weird locations only to get them shut down within a month or two. https://finance.yahoo.com/news/tether-found-bank-might-bahamas-181859081.html https://finance.yahoo.com/news/tether-found-bank-might-baham... “This banking information is commercially sensitive and confidential. You should be very careful with this information. You are asked to keep this information to yourself and to not share it except with your financial institution. Divulging this information could damage not just yourself and Bitfinex, but the entire digital token ecosystem. Accordingly, you are cautioned that there may be serious negative effects associated with this information becoming public.” Seems legit https://medium.com/@bitfinexed/bitfinex-and-tether-is-unauditable-why-they-will-never-do-a-real-audit-3324e002b185 https://medium.com/@bitfinexed/bitfinex-and-tether-is-unaudi... Tether auditor distances itself after publishing "not an audit" and then "Friedman Quietly Removes Bitfinex Mentions" A brief announcement posted on Friedman’s own site, dated May 8th 2017 and titled “Friedman Selected as Crypto-Savvy Auditor by Bitfinex” now links to a 404 page. For the record, here’s an archived version. https://web.archive.org/web/20171129082053/http://www.friedmanllp.com:80/insights/auditor-engagement https://web.archive.org/web/20171129082053/http://www.friedm...