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"Contrary to online speculation, there was no finding that Tether ever issued tethers [USDT] without backing, or to manipulate crypto prices," said Weinstein, a

"Contrary to online speculation, there was no finding that Tether ever issued tethers [USDT] without backing, or to manipulate crypto prices," said Weinstein, a former federal prosecutor. [0] [0] https://www.theblockcrypto.com/post/95207/bitfinex-tether-new-york-ag-settlement-lawsuit https://www.theblockcrypto.com/post/95207/bitfinex-tether-ne... EDIT: For some reason I'm being downvoted, but I'm genuinely curious to understand why this news is being simultaneously interpreted in two opposite ways.

Clewza313 6y ago
Huh? The NYAG press release literally says: "Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie." Edit: The difference between the two statements is that Tether can still be "backed" by something other than USD, notably crypto. And the PR is silent on what exactly Tether is backed by. This saga isn't over yet.
- andreaorru 6y ago
  I'm also confused by the contradicting news. CryptoTwitter (and the markets) reacted enthusiastically...
  - Izkata 6y ago
    Those two quotes aren't necessarily contradictory, they're about different timings. Tether could have been fully backed when issuing new tethers, and stopped issuing tethers during period(s) when it wasn't fully backed.
  - PragmaticPulp 6y ago
    When was the last time CryptoTwitter didn’t try to spin something as good for Bitcoin?
jkhdigital 6y ago
That statement was made by their counsel, so it should probably be taken with a grain of salt.
- andreaorru 6y ago
  I guess we'll know more in the next few hours.
lovedswain 6y ago
It also documents all their attempts to verify the peg required mixing funds with an exchange known to have a running $500m+ hole in their balance sheet
Jonnax 6y ago
The linked webpage is from the New York Attorney General's office and the quote you quoted is from one of BitFenix's lawyers.
teknopurge 6y ago
From 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 USDT stablecoin is only about 74 percent backed by fiat equivalents as of April 30, says its issuer’s general counsel. Tether, the company behind USDT, holds about $2.1 billion in cash and short-term securities, wrote its general counsel Stuart Hoegner in an affidavit Tuesday. Hoegner is also general counsel to Bitfinex, a crypto exchange which shares executives and has overlapping owners with Tether. The two companies are at the heart of allegations by the New York Attorney General, who says Bitfinex borrowed more than $600 million from Tether after losing as much as $850 million to a currency converter."
erwan 6y ago
That's a really good point, this settlement is extremely favorable to Tether and Bitfinex. It's odd to see people persist in pinning Bitcoin's market performance on Tether issuance after reading this settlement from NYAG. Chunks of Tether collateral weren't fully liquid but my takeaway is that they operated on a genuine best-effort basis. As another comment put it, Tether definitely operated in a grey area legally - they hacked the system, but they're not the fraudsters some media, comments, or rumors made them out to be.
- PragmaticPulp 6y ago
  This settlement shows they operated as if Tether was fully backed and claimed Tether was fully backed when they knew it was not. How it that extremely favorable? If someone sells something they don’t have under false pretenses, that’s fraud. It’s not a simple liquidity issue.
dgellow 6y ago
Read the settlement agreement: https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2_oag_signed.pdf https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... Page 4 of the agreement: > 20. Because of Tether’s inability to conduct significant banking activity during this time, it could not itself hold dollars sufficient to back the hundreds of millions of new tethers that had entered the market. Until September 15, 2017, the only U.S. dollars held by Tether ostensibly backing the approximately 442 million tethers in circulation was the approximately $61 million on deposit at the Bank of Montreal. That's 14% of the cash required to back the issued Tether.
FireBeyond 6y ago
Because the issue is this: A "finding", in legal terms, is a specific, explicit statement with the supporting rationale behind it. You can make statements in a legal document, even a settlement, without classifying them as "findings" (that have specific legal ramifications). Indeed, the AG says in the documents that absolutely Tether did not always have backing. However, it doesn't address -issuance- without backing. So the attorney for Tether is doing as attorneys do, making a carefully crafted statement that will paint a specific impression to the world, whilst being entirely aware (and maintaining plausible deniability) that he is artfully weaving through several other "inconvenient truths".

Clewza313 6y ago

Huh? The NYAG press release literally says: "Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie." Edit: The difference between the two statements is that Tether can still be "backed" by something other than USD, notably crypto. And the PR is silent on what exactly Tether is backed by. This saga isn't over yet.

andreaorru 6y ago
I'm also confused by the contradicting news. CryptoTwitter (and the markets) reacted enthusiastically...
- Izkata 6y ago
  Those two quotes aren't necessarily contradictory, they're about different timings. Tether could have been fully backed when issuing new tethers, and stopped issuing tethers during period(s) when it wasn't fully backed.
- PragmaticPulp 6y ago
  When was the last time CryptoTwitter didn’t try to spin something as good for Bitcoin?

jkhdigital 6y ago

That statement was made by their counsel, so it should probably be taken with a grain of salt.

andreaorru 6y ago
I guess we'll know more in the next few hours.

lovedswain 6y ago

It also documents all their attempts to verify the peg required mixing funds with an exchange known to have a running $500m+ hole in their balance sheet

Jonnax 6y ago

The linked webpage is from the New York Attorney General's office and the quote you quoted is from one of BitFenix's lawyers.

teknopurge 6y ago

From 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 USDT stablecoin is only about 74 percent backed by fiat equivalents as of April 30, says its issuer’s general counsel. Tether, the company behind USDT, holds about $2.1 billion in cash and short-term securities, wrote its general counsel Stuart Hoegner in an affidavit Tuesday. Hoegner is also general counsel to Bitfinex, a crypto exchange which shares executives and has overlapping owners with Tether. The two companies are at the heart of allegations by the New York Attorney General, who says Bitfinex borrowed more than $600 million from Tether after losing as much as $850 million to a currency converter."

erwan 6y ago

That's a really good point, this settlement is extremely favorable to Tether and Bitfinex. It's odd to see people persist in pinning Bitcoin's market performance on Tether issuance after reading this settlement from NYAG. Chunks of Tether collateral weren't fully liquid but my takeaway is that they operated on a genuine best-effort basis. As another comment put it, Tether definitely operated in a grey area legally - they hacked the system, but they're not the fraudsters some media, comments, or rumors made them out to be.

PragmaticPulp 6y ago
This settlement shows they operated as if Tether was fully backed and claimed Tether was fully backed when they knew it was not. How it that extremely favorable? If someone sells something they don’t have under false pretenses, that’s fraud. It’s not a simple liquidity issue.

dgellow 6y ago

Read the settlement agreement: https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2_oag_signed.pdf https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen... Page 4 of the agreement: > 20. Because of Tether’s inability to conduct significant banking activity during this time, it could not itself hold dollars sufficient to back the hundreds of millions of new tethers that had entered the market. Until September 15, 2017, the only U.S. dollars held by Tether ostensibly backing the approximately 442 million tethers in circulation was the approximately $61 million on deposit at the Bank of Montreal. That's 14% of the cash required to back the issued Tether.

FireBeyond 6y ago

Because the issue is this: A "finding", in legal terms, is a specific, explicit statement with the supporting rationale behind it. You can make statements in a legal document, even a settlement, without classifying them as "findings" (that have specific legal ramifications). Indeed, the AG says in the documents that absolutely Tether did not always have backing. However, it doesn't address -issuance- without backing. So the attorney for Tether is doing as attorneys do, making a carefully crafted statement that will paint a specific impression to the world, whilst being entirely aware (and maintaining plausible deniability) that he is artfully weaving through several other "inconvenient truths".