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It does whether or not they're trustworthy. You may think the loan will not get repaid...but it's in their interest to repay it. They're making plenty of money
by darawk 8y ago
It does whether or not they're trustworthy. You may think the loan will not get repaid...but it's in their interest to repay it. They're making plenty of money at Bitfinex. The idea that they're going to run some elaborate ponzi scheme to steal money, when they're making several hundred thousand dollars per day in fees is kind of silly.
- mikeyouse 8y agoTheir account is over $700 million short right now.. Several hundred thousand per day isn't exactly going to move that dial.
- darawk 8y agoIt's a loan. The way loans work is that you make payments on them over time. $300,000/day generates ~100mm/year in revenue. That's enough to repay the loan in 7 years. However, the loan is actually for $625 million, so a bit shorter than that. But you get the point.
- village-idiot 8y ago7 years wouldn’t exactly be a short term security, and a bespoke loan from one guy to himself isn’t something easily sold enough to be called “cash like”.
- darawk 8y ago> 7 years wouldn’t exactly be a short term security Nobody said that it was. They have 74% of the reserves in cash and short term securities. The other 26% is this loan. That is, it is not a short term security.
- village-idiot 8y agoI don’t know how else to say this: I think Tether might lie about what composes that 74%.
- darawk 8y agoThen why did they bother to update their webpage when they made this loan? On the date they made this loan they updated their page to say that it was no longer fully backed by cash. If they were in the business of lying, they'd have no reason to have done that - nobody knew about the loan at that time.