4 ms·

Do you know what an attestation actually is? Are you aware of the complete lack of accountability, liability, anything from these reports? They literally just m

by numair 5y ago

Do you know what an attestation actually is? Are you aware of the complete lack of accountability, liability, anything from these reports? They literally just mean “I saw some money in an account and it matched the figure they said they were supposed to have.” That’s it. As of 12:00pm on a Friday you could have your friend wire you $1B and get someone to attest that they saw $1B in your bank account, which is then wired back out; does that make you a billionaire? The willingness of these operators to target poor, unsuspecting muppets who aren’t aware that attestation ≠ audit, without any disclaimer or explanation of this fact, is a HUGE red flag that their claims of “transparency” are anything but.

anon9001 5y ago
Yes, I understand, but the businesses involved in this also have a strong desire to not become insolvent. I think it's very reasonable to accept that you're mostly betting on Gemini (or whoever) being an honest broker, and the attestation reports give some reason to believe that they can produce the dollars on demand. The attestation reports do show that they're able to come up with that available balance, even if only for a minute, which does add credibility. If you're concerned about the solvency of the institutions offering these products, that's fine, but I think everyone (including Tether) is incentivized to do everything possible to never become insolvent. Aligned interests do count for something.
- numair 5y ago
  Please choose between one of these options: 1) You retract your claim that the stablecoins you listed have audited reserves. 2) You’ve found the auditors’ reports and we all get some excellent reading material for the weekend. Your theories of crypto monetary policy are completely irrelevant within the context of a regulatory conversation. Which, by the way, is the problem the entire crypto community will have — if the hammer ever drops (which may never happen due to intense lobbying pressure by VCs and Big Crypto), the regulator won’t have any patience for any of the various theories about “the future of money” etc. Answer basic questions about audits or admit you’ve got a problem.
  - anon9001 5y ago
    I suppose I'll take option #1, if we're saying that "attestations" are not a form of auditing. It seems pedantic to me, but maybe your usage is correct in the regulatory/accounting world. To use GUSD as an example, this is the document in question: https://assets.ctfassets.net/jg6lo9a2ukvr/4HRkKKmHejTvQ32jfv8d5E/0962b89806ff27e40b695a97ac64fcb2/Gemini_Dollar_Examination_Report_05-28-21.pdf https://assets.ctfassets.net/jg6lo9a2ukvr/4HRkKKmHejTvQ32jfv... It is not a full audit of the entire history of the movement of the funds. I agree that having a full trace of every penny publicly available would increase trust in GUSD. I suspect that if you're an exchange partner with Gemini, you could ask for more visibility into how the funds are actually being allocated when they're not being summoned for attestation. Keep in mind that the risk here is insolvency, and the firms best suited to evaluate that risk are also the ones holding large amount of GUSD. I don't know if regulation would be helpful here or not. I think exchanges considering holding GUSD should accept the risk of possible insolvency, and adjust their business to account for that risk, perhaps by buying insurance.
    - numair 5y ago
      > option #1 Great! So you agree that your claim that these stablecoins have audited reserves was false, and you retract it. Pleasure doing business. Since you were a good sport about this, I’ll say that I agree that Gemini is one of the better participants in that market. That being said, I’ll leave you with the notice on page 4 of your linked document, which is the only relevant passage for legal/regulatory purposes: This Information Has Not Been Examined by the Company’s Independent Accountant
    - rojeee 5y ago
      Differentiating between and audit and attestation is not pedantic but I can understand why you might think it is. I explained there difference here: https://news.ycombinator.com/item?id=27532670 https://news.ycombinator.com/item?id=27532670 TL;DR attestations do not provide a strong level of assurance and there are no standards for conducting them - they are ad hoc engagements. Audits are standardised engagements and must conform to a particular methodology to determine sufficient and appropriate evidence that financial statements are true and fair - basically you need third party info like custodian reports.
EMM_386 5y ago
> As of 12:00pm on a Friday you could have your friend wire you $1B and get someone to attest that they saw $1B in your bank account, which is then wired back out; does that make you a billionaire? This is literally what happened. https://davidgerard.co.uk/blockchain/2021/03/30/tether-produces-a-new-attestation-it-says-nothing-useful/ https://davidgerard.co.uk/blockchain/2021/03/30/tether-produ...

by numair 5y ago

anon9001 5y ago

Yes, I understand, but the businesses involved in this also have a strong desire to not become insolvent. I think it's very reasonable to accept that you're mostly betting on Gemini (or whoever) being an honest broker, and the attestation reports give some reason to believe that they can produce the dollars on demand. The attestation reports do show that they're able to come up with that available balance, even if only for a minute, which does add credibility. If you're concerned about the solvency of the institutions offering these products, that's fine, but I think everyone (including Tether) is incentivized to do everything possible to never become insolvent. Aligned interests do count for something.

numair 5y ago
Please choose between one of these options: 1) You retract your claim that the stablecoins you listed have audited reserves. 2) You’ve found the auditors’ reports and we all get some excellent reading material for the weekend. Your theories of crypto monetary policy are completely irrelevant within the context of a regulatory conversation. Which, by the way, is the problem the entire crypto community will have — if the hammer ever drops (which may never happen due to intense lobbying pressure by VCs and Big Crypto), the regulator won’t have any patience for any of the various theories about “the future of money” etc. Answer basic questions about audits or admit you’ve got a problem.
- anon9001 5y ago
  I suppose I'll take option #1, if we're saying that "attestations" are not a form of auditing. It seems pedantic to me, but maybe your usage is correct in the regulatory/accounting world. To use GUSD as an example, this is the document in question: https://assets.ctfassets.net/jg6lo9a2ukvr/4HRkKKmHejTvQ32jfv8d5E/0962b89806ff27e40b695a97ac64fcb2/Gemini_Dollar_Examination_Report_05-28-21.pdf https://assets.ctfassets.net/jg6lo9a2ukvr/4HRkKKmHejTvQ32jfv... It is not a full audit of the entire history of the movement of the funds. I agree that having a full trace of every penny publicly available would increase trust in GUSD. I suspect that if you're an exchange partner with Gemini, you could ask for more visibility into how the funds are actually being allocated when they're not being summoned for attestation. Keep in mind that the risk here is insolvency, and the firms best suited to evaluate that risk are also the ones holding large amount of GUSD. I don't know if regulation would be helpful here or not. I think exchanges considering holding GUSD should accept the risk of possible insolvency, and adjust their business to account for that risk, perhaps by buying insurance.
  - numair 5y ago
    > option #1 Great! So you agree that your claim that these stablecoins have audited reserves was false, and you retract it. Pleasure doing business. Since you were a good sport about this, I’ll say that I agree that Gemini is one of the better participants in that market. That being said, I’ll leave you with the notice on page 4 of your linked document, which is the only relevant passage for legal/regulatory purposes: This Information Has Not Been Examined by the Company’s Independent Accountant
  - rojeee 5y ago
    Differentiating between and audit and attestation is not pedantic but I can understand why you might think it is. I explained there difference here: https://news.ycombinator.com/item?id=27532670 https://news.ycombinator.com/item?id=27532670 TL;DR attestations do not provide a strong level of assurance and there are no standards for conducting them - they are ad hoc engagements. Audits are standardised engagements and must conform to a particular methodology to determine sufficient and appropriate evidence that financial statements are true and fair - basically you need third party info like custodian reports.

EMM_386 5y ago

> As of 12:00pm on a Friday you could have your friend wire you $1B and get someone to attest that they saw $1B in your bank account, which is then wired back out; does that make you a billionaire? This is literally what happened. https://davidgerard.co.uk/blockchain/2021/03/30/tether-produces-a-new-attestation-it-says-nothing-useful/ https://davidgerard.co.uk/blockchain/2021/03/30/tether-produ...