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It appears from the link in the settlement agreement: https://ag.ny.gov/sites/default/files/2021.02.17_-_settlement_agreement_-_execution_version.b-t_signed-c2

It appears from the link in 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... Tether wasn’t backed at all times. The argument was that this happened due to asset seizures in Poland and Portugal in 2017-2018. https://www.theblockcrypto.com/post/95207/bitfinex-tether-new-york-ag-settlement-lawsuit https://www.theblockcrypto.com/post/95207/bitfinex-tether-ne... Seems to me they couldn’t prove malicious intent, so they suggested they stop trading. Frankly this seems a bit of a click-bait title with the whole “illegal activities”. Sure, tether wasn’t backed at all times (probably is now), due to governments seizing their funds. Also banks do this all the time, every time they issue a loan for instance. The bank only keeps 10-30% collateral on your home.

bhouston 6y ago
The issue is that if it isn’t backed they can print more at any time. But they claim it is backed to avoid inflation devaluation of the currency. Banks are not lower to print currency but tether can at any time. The potential for fraud sufrounding tether is huge and no one is checking over them. Do you trust them? They are already known for lying. This is why banking regulations exist.
- lettergram 6y ago
  > The issue is that if it isn’t backed they can print more at any time. That’s how all banking works. China, for instance, never even publish how much money they click into existence. Not saying it’s correct, just explaining how the system really works. They really do “create” money. Even synthetic shares are created on the stock market (largely when creating ETF blocks), see “naked shorts”. It happens all the time. Here’s an explanation on how banking & interest work in a digestible way: http://anuparty.org/on-interest-slavery/ http://anuparty.org/on-interest-slavery/
  - dgellow 6y ago
    Tether isn't a bank. It's a stable coin supposed to be backed by real dollars. But that's of course not the case in practice.
PragmaticPulp 6y ago
> Sure, tether wasn’t backed at all times (probably is now), Even Tether admitted that they weren’t backed by funds, and that was before they printed most of their current supply: https://www.coindesk.com/tether-lawyer-confirms-stablecoin-74-percent-backed-by-cash-and-equivalents https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7... I don’t understand why anyone would be in a rush to take them at their word when every new piece of evidence demonstrates that Tether’s operators are not interested in behaving honestly. > Also banks do this all the time, every time they issue a loan for instance. The bank only keeps 10-30% collateral on your home. Fractional reserve banking doesn’t mean banks can simply print more money than they have on the books. Regardless, if a bank loses funds due to fraud or government intervention or whatever, they can’t simply continue pretending they had the money all along. I don’t understand the desire to pretend that what Tether is doing is normal or good for the crypto community. It’s not.
- wpietri 6y ago
  I think it has a pretty simple explanation. The crypto community started with a few dedicated idealists. But it quickly attracted loons, fantasists, scammers, and get-rich-quick dreamers, along with some reasonable people interested in the hype. Over time, as the space has produced almost no actual utility and generated billions in theft, fraud, and losses, the reasonable people generally got out, often with fingers burned. A few idealists remain. But by now the dominant group are the people low on sense and scruples who are hoping to Make Money Fast, so anything that keeps the industry aloft is great by them. That's how bubbles work, alas. The dot-com bubble was less extreme, but still at the end there was all sorts chicanery that made no sense to a vaguely rational actor. We saw it again in the mortgage bubble. There was one bank CEO who stayed out of the more dubious mortgages; when questioned, he said, "If something grows too fast, it's a weed." But there were plenty of hucksters saying that everything was normal and good. The good news is that bubbles eventually pop. I loved the post dot-com bubble period! Most of the MBA-holding locusts who had rushed in went away again. I hope the people truly interested in digital financial innovation enjoy a similar period of quiet soon.
  - 35fbe7d3d5b9 6y ago
pavlov 6y ago
> (probably is now) This kind of argumentation makes cryptocurrency proponents so insufferable. There’s no evidence Tether is backed, but somehow we can just assume in a parenthesis that they probably are, and then go on a tangential rant about banks or fiat or digital gold or something.
- thedudeabides5 6y ago
  Exactly. We've traded confidence in centralized, old world financial institutions, for decentralized, techno-utopian...financial institutions. Same s**, different marketing.
  - PragmaticPulp 6y ago
    At least banks have to operate within the realities of regulations and legal recourse. It’s not perfect, but it does provide a forcing function to make them think long and hard before doing anything that might be fraudulent. Cryptocurrency proponents like to tout crypto’s ability to escape regulation as a good thing, while ignoring that the same property makes it a dream come true for financial fraud schemes.
    - deleted 6y ago
      [deleted]
  - aqme28 6y ago
    Nothing about Tether or Bitfinex is decentralized.
- inter_netuser 6y ago
  You can take redemption from tether and they will wire you the money, they are in fact registered and regulated. on several exchanges it can be exchanged into fiat, for smaller participant.s It would collapse a long time ago, if it weren't backed.
  - 35fbe7d3d5b9 6y ago
jkhdigital 6y ago
> Sure, tether wasn’t backed at all times (probably is now), due to governments seizing their funds. Also banks do this all the time, every time they issue a loan for instance. The bank only keeps 10-30% collateral on your home. Exactly. Tether has made no claims about the quality of the collateral they use to back Tethers, so they can probably get away with some very questionable accounting. Anyone who actually has skin in the game understands this about Tether. If you want to take the risk, go right ahead. I've traded at least $50M in notional volume over the past 3 years and never, not once, have I touched Tether.
- PragmaticPulp 6y ago
  You’re ignoring the systemic issues that come from having Tether printing drive the price action. You may not have touched Tether, but Tether’s influence on asset prices can’t be understated. You are at risk by trading assets that are inflated by Tether. These things aren’t uncoupled.
user-the-name 6y ago
> probably is now Here are the facts we know about Tether being backed: 1. They used to say they were backed 1 to 1 by cash. 2. This was a direct lie. 3. They now say they are backed 1 to 1 by cash and "cash equivalents", not otherwise specified. Which one of these facts is it that you are basing your claim that they "probably are now" on?
- FireBeyond 6y ago
  3. "... while printing multiple billions a week."
Forbo 6y ago
If they're backed then they can prove it with an audit. Considering their last auditor told them to kick rocks, I'm highly skeptical.
- FireBeyond 6y ago
  I thought it hilarious that 1) Bitfinex/Tether (when they were still pretending they were two completely unrelated entities, remember that?) thought that handing an auditor the front summary page of a bank account would be sufficient to 'verify holdings', and 2) when they told the public they had another audit done, but were unable to release it because it would be in Mandarin...
Spooky23 6y ago
The entire point of the tether was that it was backed 1:1 by US Dollars. Later they asserted that it was 0.75:1. The bank doesn't lie about it's capitalization.

bhouston 6y ago

The issue is that if it isn’t backed they can print more at any time. But they claim it is backed to avoid inflation devaluation of the currency. Banks are not lower to print currency but tether can at any time. The potential for fraud sufrounding tether is huge and no one is checking over them. Do you trust them? They are already known for lying. This is why banking regulations exist.

lettergram 6y ago
> The issue is that if it isn’t backed they can print more at any time. That’s how all banking works. China, for instance, never even publish how much money they click into existence. Not saying it’s correct, just explaining how the system really works. They really do “create” money. Even synthetic shares are created on the stock market (largely when creating ETF blocks), see “naked shorts”. It happens all the time. Here’s an explanation on how banking & interest work in a digestible way: http://anuparty.org/on-interest-slavery/ http://anuparty.org/on-interest-slavery/
- dgellow 6y ago
  Tether isn't a bank. It's a stable coin supposed to be backed by real dollars. But that's of course not the case in practice.

PragmaticPulp 6y ago

> Sure, tether wasn’t backed at all times (probably is now), Even Tether admitted that they weren’t backed by funds, and that was before they printed most of their current supply: https://www.coindesk.com/tether-lawyer-confirms-stablecoin-74-percent-backed-by-cash-and-equivalents https://www.coindesk.com/tether-lawyer-confirms-stablecoin-7... I don’t understand why anyone would be in a rush to take them at their word when every new piece of evidence demonstrates that Tether’s operators are not interested in behaving honestly. > Also banks do this all the time, every time they issue a loan for instance. The bank only keeps 10-30% collateral on your home. Fractional reserve banking doesn’t mean banks can simply print more money than they have on the books. Regardless, if a bank loses funds due to fraud or government intervention or whatever, they can’t simply continue pretending they had the money all along. I don’t understand the desire to pretend that what Tether is doing is normal or good for the crypto community. It’s not.

wpietri 6y ago
I think it has a pretty simple explanation. The crypto community started with a few dedicated idealists. But it quickly attracted loons, fantasists, scammers, and get-rich-quick dreamers, along with some reasonable people interested in the hype. Over time, as the space has produced almost no actual utility and generated billions in theft, fraud, and losses, the reasonable people generally got out, often with fingers burned. A few idealists remain. But by now the dominant group are the people low on sense and scruples who are hoping to Make Money Fast, so anything that keeps the industry aloft is great by them. That's how bubbles work, alas. The dot-com bubble was less extreme, but still at the end there was all sorts chicanery that made no sense to a vaguely rational actor. We saw it again in the mortgage bubble. There was one bank CEO who stayed out of the more dubious mortgages; when questioned, he said, "If something grows too fast, it's a weed." But there were plenty of hucksters saying that everything was normal and good. The good news is that bubbles eventually pop. I loved the post dot-com bubble period! Most of the MBA-holding locusts who had rushed in went away again. I hope the people truly interested in digital financial innovation enjoy a similar period of quiet soon.
- 35fbe7d3d5b9 6y ago

pavlov 6y ago

> (probably is now) This kind of argumentation makes cryptocurrency proponents so insufferable. There’s no evidence Tether is backed, but somehow we can just assume in a parenthesis that they probably are, and then go on a tangential rant about banks or fiat or digital gold or something.

thedudeabides5 6y ago
Exactly. We've traded confidence in centralized, old world financial institutions, for decentralized, techno-utopian...financial institutions. Same s**, different marketing.
- PragmaticPulp 6y ago
  At least banks have to operate within the realities of regulations and legal recourse. It’s not perfect, but it does provide a forcing function to make them think long and hard before doing anything that might be fraudulent. Cryptocurrency proponents like to tout crypto’s ability to escape regulation as a good thing, while ignoring that the same property makes it a dream come true for financial fraud schemes.
  - deleted 6y ago
    [deleted]
- aqme28 6y ago
  Nothing about Tether or Bitfinex is decentralized.
inter_netuser 6y ago
You can take redemption from tether and they will wire you the money, they are in fact registered and regulated. on several exchanges it can be exchanged into fiat, for smaller participant.s It would collapse a long time ago, if it weren't backed.
- 35fbe7d3d5b9 6y ago

jkhdigital 6y ago

> Sure, tether wasn’t backed at all times (probably is now), due to governments seizing their funds. Also banks do this all the time, every time they issue a loan for instance. The bank only keeps 10-30% collateral on your home. Exactly. Tether has made no claims about the quality of the collateral they use to back Tethers, so they can probably get away with some very questionable accounting. Anyone who actually has skin in the game understands this about Tether. If you want to take the risk, go right ahead. I've traded at least $50M in notional volume over the past 3 years and never, not once, have I touched Tether.

PragmaticPulp 6y ago
You’re ignoring the systemic issues that come from having Tether printing drive the price action. You may not have touched Tether, but Tether’s influence on asset prices can’t be understated. You are at risk by trading assets that are inflated by Tether. These things aren’t uncoupled.

user-the-name 6y ago

> probably is now Here are the facts we know about Tether being backed: 1. They used to say they were backed 1 to 1 by cash. 2. This was a direct lie. 3. They now say they are backed 1 to 1 by cash and "cash equivalents", not otherwise specified. Which one of these facts is it that you are basing your claim that they "probably are now" on?

FireBeyond 6y ago
3. "... while printing multiple billions a week."

Forbo 6y ago

If they're backed then they can prove it with an audit. Considering their last auditor told them to kick rocks, I'm highly skeptical.

FireBeyond 6y ago
I thought it hilarious that 1) Bitfinex/Tether (when they were still pretending they were two completely unrelated entities, remember that?) thought that handing an auditor the front summary page of a bank account would be sufficient to 'verify holdings', and 2) when they told the public they had another audit done, but were unable to release it because it would be in Mandarin...

Spooky23 6y ago

The entire point of the tether was that it was backed 1:1 by US Dollars. Later they asserted that it was 0.75:1. The bank doesn't lie about it's capitalization.