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Honestly, this is kind of a nothingburger. The press release seems to merely reinforce what was an open secret in the cryptocurrency world, which is that Bitfin

Honestly, this is kind of a nothingburger. The press release seems to merely reinforce what was an open secret in the cryptocurrency world, which is that Bitfinex and Tether have played fast and loose with whatever reserves they received for their Tether issuance. Which is, of course, utterly unremarkable to anyone who knows anything about how financial sausage is really made. Bitfinex and Tether are shady. Caveat emptor, and carry on hodling.

PragmaticPulp 6y ago
It’s more important than that. Cryptocurrency proponents have been trying to downplay the Tether situation for years. One of the common dismissals was the idea that if what Tether was doing was truly fraudulent, some government institution would step in to intervene. Proponents pointed to the lack of intervention as a signal that Tether was operating above board. This also reveals new facts and numbers about the scale of what has been going on. We still don’t know the full story, but it’s clear that reality is even worse than we thought.
- jkhdigital 6y ago
  I don't disagree that Tether is likely a big fraud, but my point is that even the regulated financial system is full of questionable accounting and long-running, undiscovered fraud. Remember Bernie Madoff? His fraud lasted 17 years before falling apart. It would be nice if Tether eventually falls apart too, but the world will never run out of fraudsters and hucksters.
  - mumblemumble 6y ago
    Bernie Madoff's fraud was big and awful, but, if the allegations about Tether are true, then (edit: for the purposes of this particular discussion) comparing the two is a category error. Madoff's fraud never raised any questions about whether the exchange rate between USD and some other currency was legitimate.
  - saalweachter 6y ago
    The innovation of Bitcoin is that it is a decentralized Ponzi scheme. Bernie Madoff's scheme fell apart because it was centralized, and so, once you arrested Madoff, it was over. The end. There's no one at the center of Bitcoin. There are big players, sure, but they are all replaceable. It's happened before and it will happen again. And each time one exchange or big player is arrested, shut down, or slinks away having stolen enough money to sate themselves, someone new can seamlessly slip in and start hyping Bitcoin and taking a percentage from the new rubes without missing a beat. I honestly don't think it will ever go away, completely, for good, no matter how often it booms and busts. When I'm in a nursing home I'm going to be getting calls from boiler rooms trying to convince me to move my retirement savings into Bitcoin, I'm convinced.
    - varispeed 6y ago
      Almost every currency is a ponzi scheme - that does not only apply to crypto.
      - saalweachter 6y ago
        Wombats poop cubes -- they stack them to mark their territory.
- teknopurge 6y ago
  I did not see any data in that post that is new. The latest news this-year is that Tether paid-off the remaining balances of borrows/loans from other asset classes to make the USD holdings whole. The only way to tell is an independent 3rd-party audit, which would bring some finality to this discussion.
owenmarshall 6y ago
Considering the meteoric rise of BTC is tied so deeply to Tether issuances, it sounds an awful lot like you’re trying to convince us the emperor really has clothes.
- jkhdigital 6y ago
  Correlation is not causation. And your mental model of how the cryptocurrency markets work is likely way too simplistic--did you know that cryptocurrency perpetual swap derivatives clear over $350B in daily volume? Pretend for a moment that Tether pulls a Nixon, and closes the "dollar window" ending redeemability. Then what would be the difference between Tether and e.g. the BitMEX XBTUSD perpetual swap contract? Just think about it for a while.
  - gzer0 6y ago
    Editing my response because OP has edited theirs- putting my original comment out of context.
    - jkhdigital 6y ago
      Go read more economics. And maybe trade some financial derivatives, lose some real money and see how that sharpens your mind.
      - deleted 6y ago
        [deleted]
  - cool_dude85 6y ago
    Ending redeemability? Can you redeem a tether for a USD today?
    - BelenusMordred 6y ago
      Yes, certainly can, right here: https://www.kraken.com/prices/usdt-tether-usd-price-chart/usd-us-dollar?interval=1m https://www.kraken.com/prices/usdt-tether-usd-price-chart/us... You can also short it if you are convinced Tether is going to collapse.
TrackerFF 6y ago
If they are shady, then it's high time to employ and enforce regulations - if they can't regulate themselves, then someone else has to. Arguing that this is old news, and that a small minority has been "in the know" doesn't hold much water either - the crypto scene has long since become mainstream, and as such, attracted regular masses. In the end, it boils down to consumer protection.
NelsonMinar 6y ago
This is not "utterly unremarkable". Rational investors don't buy investments whose very basis is a lie. It's only unremarkable to cryptocurrency gamblers who've already accepted everything they're doing is a slow motion scam.

PragmaticPulp 6y ago

It’s more important than that. Cryptocurrency proponents have been trying to downplay the Tether situation for years. One of the common dismissals was the idea that if what Tether was doing was truly fraudulent, some government institution would step in to intervene. Proponents pointed to the lack of intervention as a signal that Tether was operating above board. This also reveals new facts and numbers about the scale of what has been going on. We still don’t know the full story, but it’s clear that reality is even worse than we thought.

jkhdigital 6y ago
I don't disagree that Tether is likely a big fraud, but my point is that even the regulated financial system is full of questionable accounting and long-running, undiscovered fraud. Remember Bernie Madoff? His fraud lasted 17 years before falling apart. It would be nice if Tether eventually falls apart too, but the world will never run out of fraudsters and hucksters.
- mumblemumble 6y ago
  Bernie Madoff's fraud was big and awful, but, if the allegations about Tether are true, then (edit: for the purposes of this particular discussion) comparing the two is a category error. Madoff's fraud never raised any questions about whether the exchange rate between USD and some other currency was legitimate.
- saalweachter 6y ago
  The innovation of Bitcoin is that it is a decentralized Ponzi scheme. Bernie Madoff's scheme fell apart because it was centralized, and so, once you arrested Madoff, it was over. The end. There's no one at the center of Bitcoin. There are big players, sure, but they are all replaceable. It's happened before and it will happen again. And each time one exchange or big player is arrested, shut down, or slinks away having stolen enough money to sate themselves, someone new can seamlessly slip in and start hyping Bitcoin and taking a percentage from the new rubes without missing a beat. I honestly don't think it will ever go away, completely, for good, no matter how often it booms and busts. When I'm in a nursing home I'm going to be getting calls from boiler rooms trying to convince me to move my retirement savings into Bitcoin, I'm convinced.
  - varispeed 6y ago
    Almost every currency is a ponzi scheme - that does not only apply to crypto.
    - saalweachter 6y ago
      Wombats poop cubes -- they stack them to mark their territory.
teknopurge 6y ago
I did not see any data in that post that is new. The latest news this-year is that Tether paid-off the remaining balances of borrows/loans from other asset classes to make the USD holdings whole. The only way to tell is an independent 3rd-party audit, which would bring some finality to this discussion.

owenmarshall 6y ago

Considering the meteoric rise of BTC is tied so deeply to Tether issuances, it sounds an awful lot like you’re trying to convince us the emperor really has clothes.

jkhdigital 6y ago
Correlation is not causation. And your mental model of how the cryptocurrency markets work is likely way too simplistic--did you know that cryptocurrency perpetual swap derivatives clear over $350B in daily volume? Pretend for a moment that Tether pulls a Nixon, and closes the "dollar window" ending redeemability. Then what would be the difference between Tether and e.g. the BitMEX XBTUSD perpetual swap contract? Just think about it for a while.
- gzer0 6y ago
  Editing my response because OP has edited theirs- putting my original comment out of context.
  - jkhdigital 6y ago
    Go read more economics. And maybe trade some financial derivatives, lose some real money and see how that sharpens your mind.
    - deleted 6y ago
      [deleted]
- cool_dude85 6y ago
  Ending redeemability? Can you redeem a tether for a USD today?
  - BelenusMordred 6y ago
    Yes, certainly can, right here: https://www.kraken.com/prices/usdt-tether-usd-price-chart/usd-us-dollar?interval=1m https://www.kraken.com/prices/usdt-tether-usd-price-chart/us... You can also short it if you are convinced Tether is going to collapse.

TrackerFF 6y ago

If they are shady, then it's high time to employ and enforce regulations - if they can't regulate themselves, then someone else has to. Arguing that this is old news, and that a small minority has been "in the know" doesn't hold much water either - the crypto scene has long since become mainstream, and as such, attracted regular masses. In the end, it boils down to consumer protection.

NelsonMinar 6y ago

This is not "utterly unremarkable". Rational investors don't buy investments whose very basis is a lie. It's only unremarkable to cryptocurrency gamblers who've already accepted everything they're doing is a slow motion scam.