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Tether has been an openly fraudulent enterprise since the beginning. Pretty much anyone with any experience in financial securities and even passing knowledge o

Tether has been an openly fraudulent enterprise since the beginning. Pretty much anyone with any experience in financial securities and even passing knowledge of crypto was raising red flags, including on this website. Never wanna blame the victim, but kinda feel like anyone with any due diligence here was just hoping for casino rallies and didn't believe what they were being sold.

A2017U1 7y ago
Do you have any proof? The US authorities have literally shown in court they have vast sums backing tethers. Bifinex itself is a money printing machine. I'd love to take some serious 5 figure wagers with the people who say this stuff. Because they've been saying it for years now and have been consistently proven wrong.
- pfisch 7y ago
  There is no chance it is 100% backed like they claim. I would happily wager $10000 on it if a framework for such a wager existed.
  - repomies691 7y ago
    The majority of markets don't care if it is 100% backed, like they don't care when their bank does fractional reserve. They care about whether the USD peg will last within their timespan they plan to use tether. One of the most common advertised applications for tether is arbitrage between exchanges. There it hardly matters whether tether has 100% reserves, what matters if the peg stays within the days that you are doing the arbitrage (buying tether from one exchange, transfering to other, selling it).
    - pfisch 7y ago
      >The majority of markets don't care if it is 100% backed, like they don't care when their bank does fractional reserve. Banks are insured, and in general they haven't failed for the last like 100+ years. I do think what you are saying about usdt is mostly true though, however if(when) usdt does fail the entire market will take a dive off a cliff. So even if your assets are in other cryptos it still represents a systemic risk to the entire system.
      - SkyMarshal 7y ago
        >Banks are insured, and in general they haven't failed for the last like 100+ years. Not sure what you're trying to say here, given Bear Stearns and Lehman just failed ~11yrs ago, and the entire banking system would have imploded if not for trillions in Fed lending support and govt stimulus.
        pfisch 7y ago
        Those were not consumer banks. I don't think anyone actually lost their account balances.
        arcticbull 7y ago
        That's the SIPC for ya (https://www.sipc.org https://www.sipc.org)
        arcticbull 7y ago
        Not only were those investment banks, they were insured by the SIPC which actually protects the investments they've got on deposit. In 2008 WaMu and about a local bank a week went under and yet thanks to the FDIC no retail banking customer lost a single penny. That's why it's there. I swear if ECON101 was mandatory crypto wouldn't exist.
      - deadbunny 7y ago
        > Banks are insured, and in general they haven't failed for the last like 100+ years. Thanks to massive bailouts you mean?
        pfisch 7y ago
        The mechanism really doesn't matter as long as they are secured.
    - ravingraven 7y ago
      >The majority of markets don't care if it is 100% backed, like they don't care when their bank does fractional reserve. Yes, but doesn't Tether promise that they back each coin with a dollar? I would care very much if I found out that the issuing party is lying.
      - p49k 7y ago
        You’re arguing in circles. Maybe you would care, but the point OP is making is that the people who are engaging in the transactions that cause it to be pegged at $1 don’t care if Tether is lying because it doesn’t affect their use case in any significant way.
    - beefield 7y ago
      > The majority of markets don't care if it is 100% backed, like they don't care when their bank does fractional reserve Fractional reserve banks' deposits are backed more than 100% with more or less liquid assets. That's why nobody cares if a bank does fractional reserve. With tether there is no reason to believe there is even close to 100% backing. Unless you count as a reason an unverified claim that they are backed.
      - dwild 7y ago
        > with more or less liquid assets What's more liquid than cash itself? I also have an hard time it's backed with MORE value and whether that value is fictional or not. The 2008 crash has shown that it wasn't actually backed by much.
        beefield 7y ago
        "Or less" Any bank with assets worth less than liabilities is bankrupt. You may not believe it, but regulators that allow bank to operate and any one holding bank equity with stock price above zero believes that bank's assets are worth more than liabilities. There you are right that it is possible that tje value of the bank's assets may decline fast, but normally the assets exceed deposits quite significantly as deposits are amongst the highest priorities, so other liabilities (senior debt and equity) act as buffers as well.
        beefield 7y ago
        Of course, when I say liabilities, I mean non-equity.
  - magnamerc 7y ago
    You could open up a prediction market on Augur.
    - gerikson 7y ago
      Interesting! Can Augur manage USD via escrow?
      - magnamerc 7y ago
        I believe Veil (which is a dapp built ontop of the Augur protocol) supports DAI, which is a decentralized stablecoin built by MakerDAO. The only market on Augur right now for USDT is the following one: https://predictions.global/augur-markets/will-tether-usdt-trade-below-0-50-usd-by-2020-0xe7578ea98bba0a52e8237cfc78b72eba6120de8e https://predictions.global/augur-markets/will-tether-usdt-tr... There's no liquidity though, which is a problem obviously.
- arcticbull 7y ago
  May I point you to @bitfinexed for all the proof you can handle? https://medium.com/@bitfinexed https://medium.com/@bitfinexed
  - tuesdayrain 7y ago
    Oh yes a short seller writing articles on medium must have the unbiased truth we're looking for. The US authorities should have saved time by just contacting him instead of doing an investigation
    - arcticbull 7y ago
      It’s important to take any information someone presents you that doesn’t line up with your existing worldview and just find a way to ignore it, that’s why were all here right?
repomies691 7y ago
If you look at market data, it looks like tether has managed to keep the peg of the asset quite well along the years. So if you have parked some of your assets to tether, you have had very good possibility to change it back to other crypto-assets any time. I don't want to promote tether and I have never touched it myself, but when it seems to be working and liquid for many exchanged world-wide, your statements seem a little bit off. Tether may be having shitloads of issues but according to market data the issues haven't hit the end-user and the USD peg yet.
- gerikson 7y ago
  The main issue is what will happen when holders of USDT try to redeem them. Tether says it's immune to a bank run, because they have the entire outstanding amount of USDT (3.83B at time of writing) is backed 74% with USD. If you believe that a company without access to banking actually has 2.8B USD available for disbursement, then you are more optimistic than I am.
  - repomies691 7y ago
    I'm just saying that tether has worked for years, and the peg seems to be still there. All those years also people have been saying that tether will lose its liquidity any moment. Might be but tha market data says what it says. As I said I haven't used tether and highly probably will never use it - I don't have any use case, bitcoin is enough for me. However if I had some use-case for moderate amount and months of timespan, I would probably use it (depending of course on other alternatives - AFAIK USDT is de facto "USD coin" on many exchanges).
    - roenxi 7y ago
      > I'm just saying that tether has worked for years, and the peg seems to be still there. But traditionally in finance, when things go wrong everything is fine for a few years then everyone loses all their money.
    - arcticbull 7y ago
      Tether has not worked for years, they say on their website they're not redeemable for dollars ever. Yes, I suppose by that metric chuck-e-cheese tokens work too, but you'd have the same luck trying to get your cash back out of either. It's "worked" on a hope and a prayer because crypto-to-crypto exchanges who can't achieve AML/KYC compliance rely on it. How else are the narcos and the sanctioned supposed to launder their proceeds? When this whole thing goes tits up how long do you think it'll take before the founders go "missing" like Gerald Cotten? Their CEO literally tried to start a ponzi scheme right before he kicked off Tether haha (https://steemit.com/bitcoin/@binyamin/bitfinex-s-founder-seemingly-tried-to-start-a-ponzi-scheme https://steemit.com/bitcoin/@binyamin/bitfinex-s-founder-see...) and you trust these people that they're just plain sitting on BILLIONS of dollars? You know what they say, first you go broke slowly, then all at once.
Macross8299 7y ago
I can't speak to how well-backed their reserves are but the idea of a "wildcat bank" [0] almost certainly comes to mind whenever somebody mentions tether. Everything old is new again. [0]: https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking

A2017U1 7y ago

Do you have any proof? The US authorities have literally shown in court they have vast sums backing tethers. Bifinex itself is a money printing machine. I'd love to take some serious 5 figure wagers with the people who say this stuff. Because they've been saying it for years now and have been consistently proven wrong.

pfisch 7y ago
There is no chance it is 100% backed like they claim. I would happily wager $10000 on it if a framework for such a wager existed.
- repomies691 7y ago
  The majority of markets don't care if it is 100% backed, like they don't care when their bank does fractional reserve. They care about whether the USD peg will last within their timespan they plan to use tether. One of the most common advertised applications for tether is arbitrage between exchanges. There it hardly matters whether tether has 100% reserves, what matters if the peg stays within the days that you are doing the arbitrage (buying tether from one exchange, transfering to other, selling it).
  - pfisch 7y ago
    >The majority of markets don't care if it is 100% backed, like they don't care when their bank does fractional reserve. Banks are insured, and in general they haven't failed for the last like 100+ years. I do think what you are saying about usdt is mostly true though, however if(when) usdt does fail the entire market will take a dive off a cliff. So even if your assets are in other cryptos it still represents a systemic risk to the entire system.
    - SkyMarshal 7y ago
      >Banks are insured, and in general they haven't failed for the last like 100+ years. Not sure what you're trying to say here, given Bear Stearns and Lehman just failed ~11yrs ago, and the entire banking system would have imploded if not for trillions in Fed lending support and govt stimulus.
      - pfisch 7y ago
        Those were not consumer banks. I don't think anyone actually lost their account balances.
        arcticbull 7y ago
        That's the SIPC for ya (https://www.sipc.org https://www.sipc.org)
      - arcticbull 7y ago
        Not only were those investment banks, they were insured by the SIPC which actually protects the investments they've got on deposit. In 2008 WaMu and about a local bank a week went under and yet thanks to the FDIC no retail banking customer lost a single penny. That's why it's there. I swear if ECON101 was mandatory crypto wouldn't exist.
    - deadbunny 7y ago
      > Banks are insured, and in general they haven't failed for the last like 100+ years. Thanks to massive bailouts you mean?
      - pfisch 7y ago
        The mechanism really doesn't matter as long as they are secured.
  - ravingraven 7y ago
    >The majority of markets don't care if it is 100% backed, like they don't care when their bank does fractional reserve. Yes, but doesn't Tether promise that they back each coin with a dollar? I would care very much if I found out that the issuing party is lying.
    - p49k 7y ago
      You’re arguing in circles. Maybe you would care, but the point OP is making is that the people who are engaging in the transactions that cause it to be pegged at $1 don’t care if Tether is lying because it doesn’t affect their use case in any significant way.
  - beefield 7y ago
    > The majority of markets don't care if it is 100% backed, like they don't care when their bank does fractional reserve Fractional reserve banks' deposits are backed more than 100% with more or less liquid assets. That's why nobody cares if a bank does fractional reserve. With tether there is no reason to believe there is even close to 100% backing. Unless you count as a reason an unverified claim that they are backed.
    - dwild 7y ago
      > with more or less liquid assets What's more liquid than cash itself? I also have an hard time it's backed with MORE value and whether that value is fictional or not. The 2008 crash has shown that it wasn't actually backed by much.
      - beefield 7y ago
        "Or less" Any bank with assets worth less than liabilities is bankrupt. You may not believe it, but regulators that allow bank to operate and any one holding bank equity with stock price above zero believes that bank's assets are worth more than liabilities. There you are right that it is possible that tje value of the bank's assets may decline fast, but normally the assets exceed deposits quite significantly as deposits are amongst the highest priorities, so other liabilities (senior debt and equity) act as buffers as well.
        beefield 7y ago
        Of course, when I say liabilities, I mean non-equity.
- magnamerc 7y ago
  You could open up a prediction market on Augur.
  - gerikson 7y ago
    Interesting! Can Augur manage USD via escrow?
    - magnamerc 7y ago
      I believe Veil (which is a dapp built ontop of the Augur protocol) supports DAI, which is a decentralized stablecoin built by MakerDAO. The only market on Augur right now for USDT is the following one: https://predictions.global/augur-markets/will-tether-usdt-trade-below-0-50-usd-by-2020-0xe7578ea98bba0a52e8237cfc78b72eba6120de8e https://predictions.global/augur-markets/will-tether-usdt-tr... There's no liquidity though, which is a problem obviously.
arcticbull 7y ago
May I point you to @bitfinexed for all the proof you can handle? https://medium.com/@bitfinexed https://medium.com/@bitfinexed
- tuesdayrain 7y ago
  Oh yes a short seller writing articles on medium must have the unbiased truth we're looking for. The US authorities should have saved time by just contacting him instead of doing an investigation
  - arcticbull 7y ago
    It’s important to take any information someone presents you that doesn’t line up with your existing worldview and just find a way to ignore it, that’s why were all here right?

repomies691 7y ago

If you look at market data, it looks like tether has managed to keep the peg of the asset quite well along the years. So if you have parked some of your assets to tether, you have had very good possibility to change it back to other crypto-assets any time. I don't want to promote tether and I have never touched it myself, but when it seems to be working and liquid for many exchanged world-wide, your statements seem a little bit off. Tether may be having shitloads of issues but according to market data the issues haven't hit the end-user and the USD peg yet.

gerikson 7y ago
The main issue is what will happen when holders of USDT try to redeem them. Tether says it's immune to a bank run, because they have the entire outstanding amount of USDT (3.83B at time of writing) is backed 74% with USD. If you believe that a company without access to banking actually has 2.8B USD available for disbursement, then you are more optimistic than I am.
- repomies691 7y ago
  I'm just saying that tether has worked for years, and the peg seems to be still there. All those years also people have been saying that tether will lose its liquidity any moment. Might be but tha market data says what it says. As I said I haven't used tether and highly probably will never use it - I don't have any use case, bitcoin is enough for me. However if I had some use-case for moderate amount and months of timespan, I would probably use it (depending of course on other alternatives - AFAIK USDT is de facto "USD coin" on many exchanges).
  - roenxi 7y ago
    > I'm just saying that tether has worked for years, and the peg seems to be still there. But traditionally in finance, when things go wrong everything is fine for a few years then everyone loses all their money.
  - arcticbull 7y ago
    Tether has not worked for years, they say on their website they're not redeemable for dollars ever. Yes, I suppose by that metric chuck-e-cheese tokens work too, but you'd have the same luck trying to get your cash back out of either. It's "worked" on a hope and a prayer because crypto-to-crypto exchanges who can't achieve AML/KYC compliance rely on it. How else are the narcos and the sanctioned supposed to launder their proceeds? When this whole thing goes tits up how long do you think it'll take before the founders go "missing" like Gerald Cotten? Their CEO literally tried to start a ponzi scheme right before he kicked off Tether haha (https://steemit.com/bitcoin/@binyamin/bitfinex-s-founder-seemingly-tried-to-start-a-ponzi-scheme https://steemit.com/bitcoin/@binyamin/bitfinex-s-founder-see...) and you trust these people that they're just plain sitting on BILLIONS of dollars? You know what they say, first you go broke slowly, then all at once.

Macross8299 7y ago

I can't speak to how well-backed their reserves are but the idea of a "wildcat bank" [0] almost certainly comes to mind whenever somebody mentions tether. Everything old is new again. [0]: https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking