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Some people being ignorant about how it works makes it (probably) a scam? That ZH article's ifs, possiblies, and maybes are doing a lot of heavy lifting. Is t

Some people being ignorant about how it works makes it (probably) a scam? That ZH article's ifs, possiblies, and maybes are doing a lot of heavy lifting. Is the Bitcoin price up? Queue the Tether FUD.

gjsman-1000 5y ago
This is cryptocurrency, where “Don’t trust. Verify.” is the sentiment, and they’ve done a terrible job at allowing verification.
pwned1 5y ago
Just look at the tether terms of service. A whole section on your representations and warranties as user. The reps and warranties that tether makes? "Tether makes no representations, warranties, or guarantees to you of any kind."
onepointsixC 5y ago
Unlike Bitcoin, Eth, and other coins, Tether was always claimed to be backed by something which ensured it's stable value. Tether the company claims that their tether coins are each worth $1. There are now >$60Bn worth of Tether coin issued. With that much money they'd be a very serious private financial institution, and yet they only have 13 employee's. They have never been audited by any independent third party. They have repetitively lied about who owns the company (the same people who own Binance, the world's largest crypto exchange own Tether, and yet did not disclose that until it was found out). They have receptively changed their story on what backs Tether coin (originally each coin had $1 in a bank account to back it, now it's majoritively unspecified "commercial paper"). There is nothing which proves that Tether actually is backed by anything and the billions in new Tether coin which are minted could very well be worthless.
- mikeblackson 5y ago
  >There is nothing which proves that Tether actually is backed by anything Also, there is nothing which proves that Tether actually isn't backed by anything. I see a lot of people jumping to conclusions about a topic they are self admittedly ignorant about. Perhaps wait for the DOJ to do their jobs if you don't have insider knowledge. In response to -dsr's sarcasm below (rate limit), I've got a bit of my own. "I've run a profitable business for years and haven't committed fraud during the time I spent in an unregulated environment. Now that regulators are nearing my doorstep, it's the perfect time to start committing fraud." /s
  - Marazan 5y ago
    The NYAG showed that Tether was not fully backed.
    - mikeblackson 5y ago
      >The NYAG showed that Tether was not fully backed. In 2017, when they were busy securing other banking partners due to accounts being shutdown. I consider this a gap due to growing pains, as did the NYAG. How would you shutdown Tether temporarily (2-3 months) if a bank ends a relationship?
      - Majromax 5y ago
        > How would you shutdown Tether temporarily (2-3 months) if a bank ends a relationship? By refusing to take deposits for new Tether, and by shutting down redemptions if necessary while the banking relationship is sorted out. Tether doesn't exist ex nihilo; it requires active management to issue and redeem coins. If it ever cannot live up to its "fully backed" claim, then continuing to operate under a pretense is fraudulent.
        mikeblackson 5y ago
        >By refusing to take deposits for new Tether, and by shutting down redemptions if necessary while the banking relationship is sorted out. I agree and expect that is the lesson the $18M fine taught them. The key point is, they had a legitimate reason for under-collateralizing during the biggest bull run in crypto history at that point. 2014-2017 was the perfect period to begin fraudulent activity if they were really interested in it. I guess the question is, what is the best time to commit fraud in the crypto space, earlier or later (during-post increased regulatory scrutiny)?
        user-the-name 5y ago
        Why do you see clear evidence that the company directly lied and acted fraudulently, and immediately assume that this must be the one single time they have ever done so? When I see that a company founded by criminals has lied, I tend to assume that they will be lying again. I think that is a fairly safe bet.
- TheCapn 5y ago
  >(the same people who own Binance, the world's largest crypto exchange own Tether, and yet did not disclose that until it was found out) I thought Tether & BitFinex were the two partners? Am I wrong?

gjsman-1000 5y ago

This is cryptocurrency, where “Don’t trust. Verify.” is the sentiment, and they’ve done a terrible job at allowing verification.

pwned1 5y ago

Just look at the tether terms of service. A whole section on your representations and warranties as user. The reps and warranties that tether makes? "Tether makes no representations, warranties, or guarantees to you of any kind."

onepointsixC 5y ago

Unlike Bitcoin, Eth, and other coins, Tether was always claimed to be backed by something which ensured it's stable value. Tether the company claims that their tether coins are each worth $1. There are now >$60Bn worth of Tether coin issued. With that much money they'd be a very serious private financial institution, and yet they only have 13 employee's. They have never been audited by any independent third party. They have repetitively lied about who owns the company (the same people who own Binance, the world's largest crypto exchange own Tether, and yet did not disclose that until it was found out). They have receptively changed their story on what backs Tether coin (originally each coin had $1 in a bank account to back it, now it's majoritively unspecified "commercial paper"). There is nothing which proves that Tether actually is backed by anything and the billions in new Tether coin which are minted could very well be worthless.

mikeblackson 5y ago
>There is nothing which proves that Tether actually is backed by anything Also, there is nothing which proves that Tether actually isn't backed by anything. I see a lot of people jumping to conclusions about a topic they are self admittedly ignorant about. Perhaps wait for the DOJ to do their jobs if you don't have insider knowledge. In response to -dsr's sarcasm below (rate limit), I've got a bit of my own. "I've run a profitable business for years and haven't committed fraud during the time I spent in an unregulated environment. Now that regulators are nearing my doorstep, it's the perfect time to start committing fraud." /s
- Marazan 5y ago
  The NYAG showed that Tether was not fully backed.
  - mikeblackson 5y ago
    >The NYAG showed that Tether was not fully backed. In 2017, when they were busy securing other banking partners due to accounts being shutdown. I consider this a gap due to growing pains, as did the NYAG. How would you shutdown Tether temporarily (2-3 months) if a bank ends a relationship?
    - Majromax 5y ago
      > How would you shutdown Tether temporarily (2-3 months) if a bank ends a relationship? By refusing to take deposits for new Tether, and by shutting down redemptions if necessary while the banking relationship is sorted out. Tether doesn't exist ex nihilo; it requires active management to issue and redeem coins. If it ever cannot live up to its "fully backed" claim, then continuing to operate under a pretense is fraudulent.
      - mikeblackson 5y ago
        >By refusing to take deposits for new Tether, and by shutting down redemptions if necessary while the banking relationship is sorted out. I agree and expect that is the lesson the $18M fine taught them. The key point is, they had a legitimate reason for under-collateralizing during the biggest bull run in crypto history at that point. 2014-2017 was the perfect period to begin fraudulent activity if they were really interested in it. I guess the question is, what is the best time to commit fraud in the crypto space, earlier or later (during-post increased regulatory scrutiny)?
        user-the-name 5y ago
        Why do you see clear evidence that the company directly lied and acted fraudulently, and immediately assume that this must be the one single time they have ever done so? When I see that a company founded by criminals has lied, I tend to assume that they will be lying again. I think that is a fairly safe bet.
TheCapn 5y ago
>(the same people who own Binance, the world's largest crypto exchange own Tether, and yet did not disclose that until it was found out) I thought Tether & BitFinex were the two partners? Am I wrong?