5 ms·

> Really wonder why HN community nowdays completely ignores tether discussion everytime a bitcoin thread comes. Because it's not an issue? The NY AG issued th

> Really wonder why HN community nowdays completely ignores tether discussion everytime a bitcoin thread comes. Because it's not an issue? The NY AG issued the subpoena roughly 3 years ago. If tether were fraudulently unbacked, it would not take that long for a restraining order to be issued. Hell, it would be malpractice to see missing funds on their balance sheet and not file in that time. To believe otherwise is to say that Leticia James got the results of the subpoena, looked at the lack of funds, and decided to let them continue issuance rather than take expeditious action. You'd have to be deep into tinfoil-hat territory to believe she's in on the con.

SnowProblem 6y ago
Agree. Regardless whether or not Tether is fraudulently backed, it is fractionally backed. 74% last year, with the remaining lent out. But I suppose that's expected. Even if Tether hadn't lent out their cash, the bank they deposit into certainly would.
- raesene9 6y ago
  Out of curiousity what's the basis for your assertion on 74%, given that, as far as I'm aware, Tether has never completed an audit with an independent third party.
  - SnowProblem 6y ago
    It came from an investigation by New York's AG last year: > In fact, Tether’s reserves of cash and cash equivalents alone (without the line of credit) would cover approximately 74 percent of the outstanding amount of tether. This sort of “fractional” reserving arrangement is similar to how commercial banks work. No bank holds in liquid cash more than a small percentage of depositors’ money. The funds are invested. https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=JcKQms/tM52ywY78HUsInw== https://iapps.courts.state.ny.us/nyscef/ViewDocument?docInde...
    - raesene9 6y ago
      So an important note about that filing is that it's from iFinex and it's their opinion, it has not been established as a fact :) It may be that once they actually get to court with the NYAG they can prove this opinion to be true, however as far as I'm aware no independent auditor has confirmed the status of Tether's reserves.
raesene9 6y ago
Except of course that you're missing the point that Bitfinex have been stonewalling the discovery requests for that entire period and have not yet (as far as I'm aware) actually produced the information requested. If you've got information to show that they've complied with the subpoena, I'd be real interested to read it :)
- jpmattia 6y ago
  I was talking about the initial subpoena, not discovery. (Discovery occurs during the lawsuit, which happened later on.) The initial subpoena has not been quashed afaik, and would be pretty obvious grounds to stop issuance if it had yielded info about a hole in the balance sheet.
  - raesene9 6y ago
    They haven't produced the information that would allow NYAG to establish the state of their balance sheet, and they appear to be fighting pretty hard to avoid producing that evidence. NYAG can't, at the moment, do anything as the case has not yet reached court. Most of the discussions in the case I've seen so far resolve around iFinex trying to insist the NYAG does not have jurisdiction over them, and so they don't have to provide any information about their finances. Whilst they don't appear to be winning that argument e.g. https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=A7OmCd1LNbrQaRdGxJAzYQ== https://iapps.courts.state.ny.us/nyscef/ViewDocument?docInde... they haven't (as far as I'm aware) actually produced the information about their finances so far.
    - jpmattia 6y ago
      First: You understand that your comment was about discovery (from the lawsuit) and mine was about the subpoena before the lawsuit? > They haven't produced the information that would allow NYAG to establish the state of their balance sheet, I don't know why you think this. It's the basis of the current lawsuit from the NYAG, who questions the nature of the loans that make up a portion of the balance sheet (on the asset side).

SnowProblem 6y ago

Agree. Regardless whether or not Tether is fraudulently backed, it is fractionally backed. 74% last year, with the remaining lent out. But I suppose that's expected. Even if Tether hadn't lent out their cash, the bank they deposit into certainly would.

raesene9 6y ago
Out of curiousity what's the basis for your assertion on 74%, given that, as far as I'm aware, Tether has never completed an audit with an independent third party.
- SnowProblem 6y ago
  It came from an investigation by New York's AG last year: > In fact, Tether’s reserves of cash and cash equivalents alone (without the line of credit) would cover approximately 74 percent of the outstanding amount of tether. This sort of “fractional” reserving arrangement is similar to how commercial banks work. No bank holds in liquid cash more than a small percentage of depositors’ money. The funds are invested. https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=JcKQms/tM52ywY78HUsInw== https://iapps.courts.state.ny.us/nyscef/ViewDocument?docInde...
  - raesene9 6y ago
    So an important note about that filing is that it's from iFinex and it's their opinion, it has not been established as a fact :) It may be that once they actually get to court with the NYAG they can prove this opinion to be true, however as far as I'm aware no independent auditor has confirmed the status of Tether's reserves.

raesene9 6y ago

Except of course that you're missing the point that Bitfinex have been stonewalling the discovery requests for that entire period and have not yet (as far as I'm aware) actually produced the information requested. If you've got information to show that they've complied with the subpoena, I'd be real interested to read it :)

jpmattia 6y ago
I was talking about the initial subpoena, not discovery. (Discovery occurs during the lawsuit, which happened later on.) The initial subpoena has not been quashed afaik, and would be pretty obvious grounds to stop issuance if it had yielded info about a hole in the balance sheet.
- raesene9 6y ago
  They haven't produced the information that would allow NYAG to establish the state of their balance sheet, and they appear to be fighting pretty hard to avoid producing that evidence. NYAG can't, at the moment, do anything as the case has not yet reached court. Most of the discussions in the case I've seen so far resolve around iFinex trying to insist the NYAG does not have jurisdiction over them, and so they don't have to provide any information about their finances. Whilst they don't appear to be winning that argument e.g. https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=A7OmCd1LNbrQaRdGxJAzYQ== https://iapps.courts.state.ny.us/nyscef/ViewDocument?docInde... they haven't (as far as I'm aware) actually produced the information about their finances so far.
  - jpmattia 6y ago
    First: You understand that your comment was about discovery (from the lawsuit) and mine was about the subpoena before the lawsuit? > They haven't produced the information that would allow NYAG to establish the state of their balance sheet, I don't know why you think this. It's the basis of the current lawsuit from the NYAG, who questions the nature of the loans that make up a portion of the balance sheet (on the asset side).