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Bitfinex money was on an account of a small Polish bank. It was confiscated by a US government when they chased Colombian drug cartels earlier in 2018. There wa

Bitfinex money was on an account of a small Polish bank. It was confiscated by a US government when they chased Colombian drug cartels earlier in 2018. There was no proper segregation of client funds by their payment processor Crypto Capital Corp. Looks like Tether was collateral damage. Polish source: https://zaufanatrzeciastrona.pl/post/gielda-bitfinex-zgubila-851-mln-usd-a-podwykonawca-wine-zwala-na-polski-rzad/ https://zaufanatrzeciastrona.pl/post/gielda-bitfinex-zgubila... (please use Google translator)

stcredzero 8y ago
What would happen if the US Government stepped in and took over Tether? Would it be feasible for a different foreign government to do so?
- BubRoss 8y ago
  What would they take over? Massive liabilities?
  - stcredzero 8y ago
    Just business as usual.
- elliekelly 8y ago
  They would almost certainly not have the jurisdiction. They’re a BVI Corp (a jurisdiction that tends to look the other way at corporate fraud) and I believe operate out of Hong Kong. Lately it seems the Chinese government practically encourages companies to commit securities fraud in the US so I can’t imagine they’d be much help either. I suspect the likely outcome (eventually.. and if Bitfinex doesnt fold first) is the US government seizing their domain to prevent them from continuing to commit fraud. Edit: missed a word
  - 55555 8y ago
    > Lately it seems the Chinese government practically encourages companies to commit securities fraud in the US so I can’t imagine they’d be much help either. The China Hustle is a good movie if anyone wants to see how these schemes work.
- Tsubasachan 8y ago
  Every government in the world has dissuaded its citizens to get involved with crypto. If there is a bankrun on ING or WellsFargo the government will act. With Tether you're on your own. Cryptocurrency places you outside the financial system- the system r/bitcoin professed to hate.
  - stcredzero 8y ago
    Wouldn't the US government taking over Tether give them a toehold to monitor or control Cryptocurrency? They couldn't control all of crypto, but they could possibly control the favored way of getting the value out.
btown 8y ago
Tether is alleged to have been far more deeply and willingly involved than just "collateral damage." Per the AG's statement: "Those transactions – which also have not been disclosed to investors – treat Tether’s cash reserves as Bitfinex’s corporate slush fund, and are being used to hide Bitfinex’s massive, undisclosed losses and inability to handle customer withdrawals." https://ag.ny.gov/press-release/attorney-general-james-announces-court-order-against-crypto-currency-company-under https://ag.ny.gov/press-release/attorney-general-james-annou... The only reason to swap funds between those accounts would be if the parties knew that there was more risk than normal cash reserves for the money that Tether would end up having - and this was deemed by Tether operators to be an acceptable risk not worth disclosing. Not a shining beacon of cleanliness here.
- deleted 8y ago
  [deleted]
55555 8y ago
That source does not reliably support the claim "Bitfinex money was on an account of a small Polish bank. It was confiscated by a US government when they chased Colombian drug cartels earlier in 2018." That's just some dude's crypto blog. There is no citation or first or second-hand info.
- mianos 8y ago
  Citation, the equivalent of the AOG over there proudly said they have taken it and will return the money to the state after fees and bribes: https://www.rmf24.pl/fakty/polska/news-lodzkie-w-malym-banku-odkryto-prawie-1-3-mld-zl-z-obrotu-nar,nId,2566407&xid=17259,15700021,15700186,15700190,15700253,15700256,15700259&usg=ALkJrhhG2uUL1FEJPL2FaOlRVeQ5QkREXQ https://www.rmf24.pl/fakty/polska/news-lodzkie-w-malym-banku...

stcredzero 8y ago

What would happen if the US Government stepped in and took over Tether? Would it be feasible for a different foreign government to do so?

BubRoss 8y ago
What would they take over? Massive liabilities?
- stcredzero 8y ago
  Just business as usual.
elliekelly 8y ago
They would almost certainly not have the jurisdiction. They’re a BVI Corp (a jurisdiction that tends to look the other way at corporate fraud) and I believe operate out of Hong Kong. Lately it seems the Chinese government practically encourages companies to commit securities fraud in the US so I can’t imagine they’d be much help either. I suspect the likely outcome (eventually.. and if Bitfinex doesnt fold first) is the US government seizing their domain to prevent them from continuing to commit fraud. Edit: missed a word
- 55555 8y ago
  > Lately it seems the Chinese government practically encourages companies to commit securities fraud in the US so I can’t imagine they’d be much help either. The China Hustle is a good movie if anyone wants to see how these schemes work.
Tsubasachan 8y ago
Every government in the world has dissuaded its citizens to get involved with crypto. If there is a bankrun on ING or WellsFargo the government will act. With Tether you're on your own. Cryptocurrency places you outside the financial system- the system r/bitcoin professed to hate.
- stcredzero 8y ago
  Wouldn't the US government taking over Tether give them a toehold to monitor or control Cryptocurrency? They couldn't control all of crypto, but they could possibly control the favored way of getting the value out.

btown 8y ago

Tether is alleged to have been far more deeply and willingly involved than just "collateral damage." Per the AG's statement: "Those transactions – which also have not been disclosed to investors – treat Tether’s cash reserves as Bitfinex’s corporate slush fund, and are being used to hide Bitfinex’s massive, undisclosed losses and inability to handle customer withdrawals." https://ag.ny.gov/press-release/attorney-general-james-announces-court-order-against-crypto-currency-company-under https://ag.ny.gov/press-release/attorney-general-james-annou... The only reason to swap funds between those accounts would be if the parties knew that there was more risk than normal cash reserves for the money that Tether would end up having - and this was deemed by Tether operators to be an acceptable risk not worth disclosing. Not a shining beacon of cleanliness here.

deleted 8y ago
[deleted]

55555 8y ago

That source does not reliably support the claim "Bitfinex money was on an account of a small Polish bank. It was confiscated by a US government when they chased Colombian drug cartels earlier in 2018." That's just some dude's crypto blog. There is no citation or first or second-hand info.

mianos 8y ago
Citation, the equivalent of the AOG over there proudly said they have taken it and will return the money to the state after fees and bribes: https://www.rmf24.pl/fakty/polska/news-lodzkie-w-malym-banku-odkryto-prawie-1-3-mld-zl-z-obrotu-nar,nId,2566407&xid=17259,15700021,15700186,15700190,15700253,15700256,15700259&usg=ALkJrhhG2uUL1FEJPL2FaOlRVeQ5QkREXQ https://www.rmf24.pl/fakty/polska/news-lodzkie-w-malym-banku...