5 ms·

Is Tether Just a Scam to Enrich Bitcoin Investors?

18 points by 40four 6y ago

40four 6y ago
There have been a lot of accusations about the Tether/ Bitfinex relationship, and whether or not they are illicitly manipulating the bitcoin market. Considering the unprecedented bitcoin rally, the fact that Tether 'printed' 2 billion coins last week, and the rapidly approaching court date with the New York Attorney General, I found this article very informative. I think the writing is good quality, nice to read. And it provides a detailed overview of the whole situation, and the history of how Tether came to this point.
- f430 6y ago
  > rapidly approaching court date with the New York Attorney General OH MAN! I thought they settled already but I guess this is still on going. Do you have more details on this? I really think Bitfinex's defence is very weak and they could be charged with wire fraud and money laundering. If what I hear is true then the drug cartels have been successfully using cryptocurrencies and bitfinex to allegedly launder their money and its participants and speculators may have played a role. I expect many people to face the courts or head to jail.
  - 40four 6y ago
    Yeah, I'm not super well versed on this, I think they settled a separate issue a while ago you might be thinking of. It's surprisingly hard to find info on this, buried in a bunch of crap to do with the bitcoin going nuts. I'll dig through my history I read something the other day. Maybe 'court date' wasn't the right thing, but some sort of deadline is soon, and they don't want to extend any more. Here's a few things https://www.nasdaq.com/articles/tether-mints-record-2b-usdt-in-one-week-2021-01-11 https://www.nasdaq.com/articles/tether-mints-record-2b-usdt-... https://www.coindesk.com/nyag-tether-bitfinex-loan-documents-coming-weeks https://www.coindesk.com/nyag-tether-bitfinex-loan-documents... https://finance.yahoo.com/news/york-attorney-general-bitfinex-tether-011537028.html https://finance.yahoo.com/news/york-attorney-general-bitfine...
    - f430 6y ago
      I've been following this very carefully. My popcorn is in the microwave and I believe that we may finally see the biggest comedy gold yet.
f430 6y ago
Well, when you can't exchange Tether for USD and they can print as much as they want, and everybody just takes their word that they have the cash backing up the 1:1 ratio which is volatile (when it shouldnt') If it quacks like a duck, looks like a duck, it probably is a duck. But hey, I'm just a buttcoiner.
- 40four 6y ago
  Yeah, you can exchange them for USD if you have a minimum transaction of $100,000 :)
  - whitepoplar 6y ago
    wonder what would happen if you tried to do $100M...shouldn't be a problem, right?
    - 40four 6y ago
      Haha, good question. My guess is Tether Limited would very happy to collect their $100K in transaction fees and send you on your merry way. https://tether.to/fees/ https://tether.to/fees/
- spurdoman77 6y ago
  > everybody just takes their word that they have the cash backing up the 1:1 ratio Most people dont care if they have full reserve. I dont care if there is full reserve at my bank. I care that there is enough reserves.
  - lupire 6y ago
    Banks dont base their entire operation on a lie that they have 100% reserves. And the exact reserves are audited.
jki275 6y ago
Short answer, yes. Long answer -- it's probably more complex than all that, but Tether has been a scam for a very long time.
zinekeller 6y ago
So, Bitcoin is a fiat currency. Not government-controled*, but still fiat (despite some Bitcoin evangelists preaching "Bitcoin is not a fiat currency!") Now, Tether seems to be also a fiat currency not because it is backed by another fiat currency (US Dollars, but even then Tether will still be technically a pegged fiat currency) but because of the fait that it is backed by US Dollars. Sounds about right. /s * That I knew of, of course.

18 points by 40four 6y ago

There have been a lot of accusations about the Tether/ Bitfinex relationship, and whether or not they are illicitly manipulating the bitcoin market. Considering the unprecedented bitcoin rally, the fact that Tether 'printed' 2 billion coins last week, and the rapidly approaching court date with the New York Attorney General, I found this article very informative. I think the writing is good quality, nice to read. And it provides a detailed overview of the whole situation, and the history of how Tether came to this point.

f430 6y ago
> rapidly approaching court date with the New York Attorney General OH MAN! I thought they settled already but I guess this is still on going. Do you have more details on this? I really think Bitfinex's defence is very weak and they could be charged with wire fraud and money laundering. If what I hear is true then the drug cartels have been successfully using cryptocurrencies and bitfinex to allegedly launder their money and its participants and speculators may have played a role. I expect many people to face the courts or head to jail.
- 40four 6y ago
  Yeah, I'm not super well versed on this, I think they settled a separate issue a while ago you might be thinking of. It's surprisingly hard to find info on this, buried in a bunch of crap to do with the bitcoin going nuts. I'll dig through my history I read something the other day. Maybe 'court date' wasn't the right thing, but some sort of deadline is soon, and they don't want to extend any more. Here's a few things https://www.nasdaq.com/articles/tether-mints-record-2b-usdt-in-one-week-2021-01-11 https://www.nasdaq.com/articles/tether-mints-record-2b-usdt-... https://www.coindesk.com/nyag-tether-bitfinex-loan-documents-coming-weeks https://www.coindesk.com/nyag-tether-bitfinex-loan-documents... https://finance.yahoo.com/news/york-attorney-general-bitfinex-tether-011537028.html https://finance.yahoo.com/news/york-attorney-general-bitfine...
  - f430 6y ago
    I've been following this very carefully. My popcorn is in the microwave and I believe that we may finally see the biggest comedy gold yet.

f430 6y ago

Well, when you can't exchange Tether for USD and they can print as much as they want, and everybody just takes their word that they have the cash backing up the 1:1 ratio which is volatile (when it shouldnt') If it quacks like a duck, looks like a duck, it probably is a duck. But hey, I'm just a buttcoiner.

40four 6y ago
Yeah, you can exchange them for USD if you have a minimum transaction of $100,000 :)
- whitepoplar 6y ago
  wonder what would happen if you tried to do $100M...shouldn't be a problem, right?
  - 40four 6y ago
    Haha, good question. My guess is Tether Limited would very happy to collect their $100K in transaction fees and send you on your merry way. https://tether.to/fees/ https://tether.to/fees/
spurdoman77 6y ago
> everybody just takes their word that they have the cash backing up the 1:1 ratio Most people dont care if they have full reserve. I dont care if there is full reserve at my bank. I care that there is enough reserves.
- lupire 6y ago
  Banks dont base their entire operation on a lie that they have 100% reserves. And the exact reserves are audited.

jki275 6y ago

Short answer, yes. Long answer -- it's probably more complex than all that, but Tether has been a scam for a very long time.

zinekeller 6y ago

So, Bitcoin is a fiat currency. Not government-controled*, but still fiat (despite some Bitcoin evangelists preaching "Bitcoin is not a fiat currency!") Now, Tether seems to be also a fiat currency not because it is backed by another fiat currency (US Dollars, but even then Tether will still be technically a pegged fiat currency) but because of the fait that it is backed by US Dollars. Sounds about right. /s * That I knew of, of course.