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Is this the first official ruling on tether that shows it isn’t backed 1:1 by the US dollar? That has long been speculated, but if this is the first official v

by raiyu 6y ago

Is this the first official ruling on tether that shows it isn’t backed 1:1 by the US dollar? That has long been speculated, but if this is the first official verification how does that affect the Market. Especially the self dealing of Bitfinex.

deleted 6y ago
[deleted]
PragmaticPulp 6y ago
Tether themselves essentially admitted that it wasn’t fully backed in 2019: https://www.coindesk.com/tether-lawyer-confirms-stablecoin-74-percent-backed-by-cash-and-equivalents https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7... The strangest part of the Tether story is how much of it was obvious or even out in the open. Cryptocurrency proponents were happy to look the other way as long as prices were only going up. I suspect cryptocurrency proponents and Bitfinex are working hard to spin this as a win for Tether right.
- bhouston 6y ago
  Getting rid of the fraud (tether) at the core of btc will strengthen btc. This cryptocurrency proponents should be all for it. I have honestly been surprised how long this obvious tether saga has gone on.
  - ForHackernews 6y ago
    This is only true if we accept your unstated premise that BTC itself isn't a big ole Ponzi scheme. I guess we could argue, "It's good news for our slightly more subtle fraud if the blatant, obvious fraud gets stamped out."
    - CarelessExpert 6y ago
      > This is only true if we accept your unstated premise that BTC itself isn't a big ole Ponzi scheme. Let's be clear, here: There's a substantial difference between Bitfinex engaging in outright financial fraud vs a bunch of people buying into the value of a virtual currency for reasons no one can understand. BTC is not a ponzi. It's just a long-running speculative bubble. A collective delusion. You can disagree with that, sure, but it's certainly no more a fraud than Beanie Babies or tulip bulbs.
      - ForHackernews 6y ago
        Sort of. There are many many people hyping Bitcoin (and various bitcoin-adjacent projects: mining rigs, wallets, dodgy unregulated exchanges, etc.), and most of them have a vested financial interest in it. BTC didn't get to the price it is today on the backs of a few cypherpunks experimenting with decentralized digital currency technology.
        CarelessExpert 6y ago
        > Sort of. There are many many people hyping Bitcoin (and various bitcoin-adjacent projects: mining rigs, wallets, dodgy unregulated exchanges, etc.), and most of them have a vested financial interest in it. You've basically described commerce. Pick a random asset class--stocks, real estate, commodities, etc--and ask yourself: are there people who are hyping that asset who have a vested financial interest in it? The answer is almost certainly "yes" in every case.
        ForHackernews 6y ago
        In the less-scammy world of regulated finance, there are rules about disclosure and the SEC will come after you for running a pump-and-dump scheme.
      - sekai 6y ago
        > but it's certainly no more a fraud than Beanie Babies or tulip bulbs Did their bubbles also last 12 years, went through multiple bear/bull markets?
  - ffggvv 6y ago
    might strengthen it but not it’s price
- Cullinet 6y ago
  no the strangest thing isn't how it was out in the open - that's precisely how to get away with fraud...the message and the reality aren't the same but the message is pumped into echo chamber
- deleted 6y ago
  [deleted]
jcfrei 6y ago
The market doesn't care. Hasn't cared for years now, just look at the Kraken USDT/USD market which is freely tradable. Tethers are mostly backed by USD - no 100% but that's because some funds were seized due to regulatory scrutiny, not because they disappeared.
- albntomat0 6y ago
  I'm not convinced your argument works. Bubbles exist until they suddenly don't. This isn't a strong argument that it's a bubble, but the burden of proof is solidly on the tether folks to show that they're 100% backed, not the other way around.
  - jcfrei 6y ago
    I'm not arguing - I'm making a statement. It's evident from market prices that investors don't care. Whether the market should care is another discussion but the parent asked about the market's reaction.
- vzcx 6y ago
  I am not sure why I should trust kraken, but even if I trusted them completely, this only proves tether has enough liquidity to maintain their peg, not that they are "mostly backed." That is to say, it only puts a relatively small bound on their reserve ratio.
kpaystaxes 6y ago
This isn't a "ruling" at all. The parties just reached a settlement agreement and Bitfinex/Tether did not admit any wrongdoing.

by raiyu 6y ago

deleted 6y ago

[deleted]

PragmaticPulp 6y ago

Tether themselves essentially admitted that it wasn’t fully backed in 2019: https://www.coindesk.com/tether-lawyer-confirms-stablecoin-74-percent-backed-by-cash-and-equivalents https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7... The strangest part of the Tether story is how much of it was obvious or even out in the open. Cryptocurrency proponents were happy to look the other way as long as prices were only going up. I suspect cryptocurrency proponents and Bitfinex are working hard to spin this as a win for Tether right.

bhouston 6y ago
Getting rid of the fraud (tether) at the core of btc will strengthen btc. This cryptocurrency proponents should be all for it. I have honestly been surprised how long this obvious tether saga has gone on.
- ForHackernews 6y ago
  This is only true if we accept your unstated premise that BTC itself isn't a big ole Ponzi scheme. I guess we could argue, "It's good news for our slightly more subtle fraud if the blatant, obvious fraud gets stamped out."
  - CarelessExpert 6y ago
    > This is only true if we accept your unstated premise that BTC itself isn't a big ole Ponzi scheme. Let's be clear, here: There's a substantial difference between Bitfinex engaging in outright financial fraud vs a bunch of people buying into the value of a virtual currency for reasons no one can understand. BTC is not a ponzi. It's just a long-running speculative bubble. A collective delusion. You can disagree with that, sure, but it's certainly no more a fraud than Beanie Babies or tulip bulbs.
    - ForHackernews 6y ago
      Sort of. There are many many people hyping Bitcoin (and various bitcoin-adjacent projects: mining rigs, wallets, dodgy unregulated exchanges, etc.), and most of them have a vested financial interest in it. BTC didn't get to the price it is today on the backs of a few cypherpunks experimenting with decentralized digital currency technology.
      - CarelessExpert 6y ago
        > Sort of. There are many many people hyping Bitcoin (and various bitcoin-adjacent projects: mining rigs, wallets, dodgy unregulated exchanges, etc.), and most of them have a vested financial interest in it. You've basically described commerce. Pick a random asset class--stocks, real estate, commodities, etc--and ask yourself: are there people who are hyping that asset who have a vested financial interest in it? The answer is almost certainly "yes" in every case.
        ForHackernews 6y ago
        In the less-scammy world of regulated finance, there are rules about disclosure and the SEC will come after you for running a pump-and-dump scheme.
    - sekai 6y ago
      > but it's certainly no more a fraud than Beanie Babies or tulip bulbs Did their bubbles also last 12 years, went through multiple bear/bull markets?
- ffggvv 6y ago
  might strengthen it but not it’s price
Cullinet 6y ago
no the strangest thing isn't how it was out in the open - that's precisely how to get away with fraud...the message and the reality aren't the same but the message is pumped into echo chamber
deleted 6y ago
[deleted]

jcfrei 6y ago

The market doesn't care. Hasn't cared for years now, just look at the Kraken USDT/USD market which is freely tradable. Tethers are mostly backed by USD - no 100% but that's because some funds were seized due to regulatory scrutiny, not because they disappeared.

albntomat0 6y ago
I'm not convinced your argument works. Bubbles exist until they suddenly don't. This isn't a strong argument that it's a bubble, but the burden of proof is solidly on the tether folks to show that they're 100% backed, not the other way around.
- jcfrei 6y ago
  I'm not arguing - I'm making a statement. It's evident from market prices that investors don't care. Whether the market should care is another discussion but the parent asked about the market's reaction.
vzcx 6y ago
I am not sure why I should trust kraken, but even if I trusted them completely, this only proves tether has enough liquidity to maintain their peg, not that they are "mostly backed." That is to say, it only puts a relatively small bound on their reserve ratio.

kpaystaxes 6y ago

This isn't a "ruling" at all. The parties just reached a settlement agreement and Bitfinex/Tether did not admit any wrongdoing.