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This thread speculates that Tether’s commercial paper may be in Chinese real estate, which is currently suffering huge losses… https://twitter.com/TheLastBearS

This thread speculates that Tether’s commercial paper may be in Chinese real estate, which is currently suffering huge losses… https://twitter.com/TheLastBearSta1/status/1418302465557110785 https://twitter.com/TheLastBearSta1/status/14183024655571107...

spookthesunset 5y ago
Or more likely tether isn’t backed by anything at all. The auditor they hired quit before completing their audit. Seems legit to me. These dudes are a complete scam but as long as BTC goes to the moon nobody seems to care.
- deleted 5y ago
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- fksadfji12 5y ago
  lol
- spywaregorilla 5y ago
  Given that you're not allowed to redeem tether for dollars I never quite understood why it mattered. edit: Note the difference between "trade" for dollars and "redeem" for dollars
  - graeme 5y ago
    The whales can redeem, in minimum chunks of $100,000. Mostly these are exchanges. Thus the peg is supported by the reserves in a roundabout way. If Tether can’t redeem, and trades break the peg, then ultimately either exchanges go insolves or anyone holding tether has to write off their holdings. Or both.
    - BLanen 5y ago
      > The whales can redeem Show me the burns.
      - graeme 5y ago
        I think they only had two big ones. One was around the time they had no banking, the other was when Phil Potter left. My point wasn’t that the redemptions routinely happen. My point was that it does matter if no one can redeem, because eventually that will cause the peg to break and USDT to become worthless. I wasn’t arguing redemptions will be honoured en masse. Though interestingly Tether supply has gone very slightly down since June.
    - user-the-name 5y ago
      They can redeem, but not necessarily in dollars. The terms of service specifically give Tether the option of redeeming in basically whatever they want. Also, I say "they can", but we have zero proof of this ever happening.
      - FireBeyond 5y ago
        Indeed, people have posted bounties for anyone willing to come forth with evidence that they have redeemed Tether for USD. No-one has claimed them (and, IIRC, some are in the order of $5K USD, so not too trivial).
    - arcticbull 5y ago
      Can they though? (1) US persons and entities cannot redeem, period, so that leaves out all of Coinbase doesn't it? [edit] originally I mentioned FTX but of course they're based on Antigua and Barbuda and Hong Kong. [1 - Section 3/ and 3/3]. (2) Only individuals Tether deems as customers at their sole discretion are permitted to redeem. [1 - Section 9/ - "Tether in its absolute and sole discretion may determine that you are a customer of TIL or TLTD"] (3) Tether may delay redemptions arbitrarily at their sole discretion. [1 - Section 3/] (4) Tether may substitute whatever is in their reserves in lieu of cash at their sole discretion, and themselves admit to only having 3% of the cash needed to satisfy the "obligations" (and I air-quote say that because ... [1 - Section 3/] (5) Holding tether tokens is not a claim to any backing assets. Any redemptions are strictly goodwill. (6) Tether has identified their absconding with all the funds as a risk in their white paper [2 page 10]. This is all on their website. [1] Roughly speaking nobody has tried to redeem any - for obvious reasons. They know they can't. To your point it's the largest exchanges with their hands in this particular cookie jar, and their fates are entwined. The exchanges are holding the bags, Binance alone has 17,000,000,000 USDT. They won't do anything to potentially upset the peg, and are incentivized to do whatever they can to maintain it. Otherwise, to your point, RIP. [1] tether.to/legal [2] https://tether.to/wp-content/uploads/2016/06/TetherWhitePaper.pdf https://tether.to/wp-content/uploads/2016/06/TetherWhitePape...
      - leppr 5y ago
        > Roughly speaking nobody has tried to redeem any - for obvious reasons. They know they can't. Usually you at least come up with FUD that sounds reasonable to an outsider. Obviously many people (some that I know personally) have "redeemed" USDT for a USD wire via Tether. Tether may be fraudulent but it wouldn't have held up until now without some aspect of credibility. There are many 8 figures+ redemptions going on, sometimes multiple times a day.
        arcticbull 5y ago
        > Obviously many people (some that I know personally) have "redeemed" USDT for a USD wire from Tether. Tether may be fraudulent but it wouldn't have held up until now without some aspect of credibility. There are many 8 figures+ redemptions going on, sometimes multiple times a day. I have not seen a single piece of evidence of this, and I have not seen any burns to line up with this. If you'd like to provide some I'll happily retract my statement. For what it's worth 8 figures is small potatoes, Bitfinex literally grabbed 800M worth of their reserves one time, so we know they have some money in the piggy bank. They have some cash, but way, way, way less than they would require for a semblance of actual legitimacy. Otherwise, everything I posted is directly from their legal page and whitepaper.
  - Jkol 5y ago
    what are you talking about? you absolutely can redeem USDT for dollars...
- jpmattia 5y ago
  > Or more likely tether isn’t backed by anything at all. In order to believe this, you have to believe that Leticia James got the data from the NYAG subpoenas, and then ignored the fact that Tether has no backing. So no, not "more likely".
  - deleted 5y ago
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  - deleted 5y ago
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  - arcticbull 5y ago
    Did you read the settlement? [1] > New York Attorney General Letitia James’ office says it found that Tether sometimes held no reserves to back its cryptocurrency’s dollar peg. It said that, from mid-2017, the company had no access to banking and misled clients about liquidity issues. [2] It also depends on what you believe the role of that settlement was. Some speculated it was a trial balloon for a federal suit. [1] 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... [2] https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settlement-with-new-york-attorney-general.html https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle...
    - jpmattia 5y ago
      > Did you read the settlement? Yes. It says that tether held securities/receivables denominated in dollars rather than actual dollars, despite Tether's claim that they held dollars. I could not find anywhere that the settlement claimed "no reserves", despite CNBC's quote. [edit: It came out of the AG press release, not the settlement. As near as I can tell the settlement makes no representation that tether is unbacked, only that it is unbacked directly by US dollars, which was the Tether advertising up until 2017.]
      - arcticbull 5y ago
        They lost all access to banking meaning that there was no physical way for them to create redeem Tethers. That makes it de facto un-backed. This is addressed in 14/ through 18/. They lost access to banking, and continued to issue Tethers. > 18/ Because Tether did not have a significant bank relationship in its name from at least March 2017 until September 15, 2017, it could not directly process any fiat deposits for purchases of Tethers by customers on either the Tether website or via the Bitfinex trading platform. And yet in that period they issued some 400M tethers.
- staplers 5y ago
  Most bank notes aren't "backed by anything". Reserve requirements are now zero for banks. Source: https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.federalreserve.gov/monetarypolicy/reservereq.htm
  - killingtime74 5y ago
    Government is something. They can tax and print money.
  - acheron 5y ago
    You have to pay the taxman on April 15. He’s going to want US dollars. If you don’t pay up, the men with guns come. That’s “backing” more real than shiny yellow metal.
    - staplers 5y ago
      So one could say the US dollar is backed by violence? Also, you didn't address reserve requirements.
- anonymoushn 5y ago
  The Tether attestation earlier this year is by my fund's auditor, and they seem in my experience to be sufficiently diligent.
- fnordfnordfnord 5y ago
  >These dudes are a complete scam but as long as BTC goes to the moon nobody seems to care. Chuckles... I'm in danger.
Aperocky 5y ago
LOL Evergrande is a ticking time bomb. Assets frozen by a Chinese bank just a week ago, and before that they were peddling CP in the range of 12% annual... It's about to explode.
DebtDeflation 5y ago
>This thread speculates that Tether’s commercial paper may be in Chinese real estate The simpler answer is Tether's commercial paper was issued by Bitfinex, or some shell company owned by Bitfinex.

spookthesunset 5y ago

Or more likely tether isn’t backed by anything at all. The auditor they hired quit before completing their audit. Seems legit to me. These dudes are a complete scam but as long as BTC goes to the moon nobody seems to care.

deleted 5y ago
[deleted]
fksadfji12 5y ago
lol
spywaregorilla 5y ago
Given that you're not allowed to redeem tether for dollars I never quite understood why it mattered. edit: Note the difference between "trade" for dollars and "redeem" for dollars
- graeme 5y ago
  The whales can redeem, in minimum chunks of $100,000. Mostly these are exchanges. Thus the peg is supported by the reserves in a roundabout way. If Tether can’t redeem, and trades break the peg, then ultimately either exchanges go insolves or anyone holding tether has to write off their holdings. Or both.
  - BLanen 5y ago
    > The whales can redeem Show me the burns.
    - graeme 5y ago
      I think they only had two big ones. One was around the time they had no banking, the other was when Phil Potter left. My point wasn’t that the redemptions routinely happen. My point was that it does matter if no one can redeem, because eventually that will cause the peg to break and USDT to become worthless. I wasn’t arguing redemptions will be honoured en masse. Though interestingly Tether supply has gone very slightly down since June.
  - user-the-name 5y ago
    They can redeem, but not necessarily in dollars. The terms of service specifically give Tether the option of redeeming in basically whatever they want. Also, I say "they can", but we have zero proof of this ever happening.
    - FireBeyond 5y ago
      Indeed, people have posted bounties for anyone willing to come forth with evidence that they have redeemed Tether for USD. No-one has claimed them (and, IIRC, some are in the order of $5K USD, so not too trivial).
  - arcticbull 5y ago
    Can they though? (1) US persons and entities cannot redeem, period, so that leaves out all of Coinbase doesn't it? [edit] originally I mentioned FTX but of course they're based on Antigua and Barbuda and Hong Kong. [1 - Section 3/ and 3/3]. (2) Only individuals Tether deems as customers at their sole discretion are permitted to redeem. [1 - Section 9/ - "Tether in its absolute and sole discretion may determine that you are a customer of TIL or TLTD"] (3) Tether may delay redemptions arbitrarily at their sole discretion. [1 - Section 3/] (4) Tether may substitute whatever is in their reserves in lieu of cash at their sole discretion, and themselves admit to only having 3% of the cash needed to satisfy the "obligations" (and I air-quote say that because ... [1 - Section 3/] (5) Holding tether tokens is not a claim to any backing assets. Any redemptions are strictly goodwill. (6) Tether has identified their absconding with all the funds as a risk in their white paper [2 page 10]. This is all on their website. [1] Roughly speaking nobody has tried to redeem any - for obvious reasons. They know they can't. To your point it's the largest exchanges with their hands in this particular cookie jar, and their fates are entwined. The exchanges are holding the bags, Binance alone has 17,000,000,000 USDT. They won't do anything to potentially upset the peg, and are incentivized to do whatever they can to maintain it. Otherwise, to your point, RIP. [1] tether.to/legal [2] https://tether.to/wp-content/uploads/2016/06/TetherWhitePaper.pdf https://tether.to/wp-content/uploads/2016/06/TetherWhitePape...
    - leppr 5y ago
      > Roughly speaking nobody has tried to redeem any - for obvious reasons. They know they can't. Usually you at least come up with FUD that sounds reasonable to an outsider. Obviously many people (some that I know personally) have "redeemed" USDT for a USD wire via Tether. Tether may be fraudulent but it wouldn't have held up until now without some aspect of credibility. There are many 8 figures+ redemptions going on, sometimes multiple times a day.
      - arcticbull 5y ago
        > Obviously many people (some that I know personally) have "redeemed" USDT for a USD wire from Tether. Tether may be fraudulent but it wouldn't have held up until now without some aspect of credibility. There are many 8 figures+ redemptions going on, sometimes multiple times a day. I have not seen a single piece of evidence of this, and I have not seen any burns to line up with this. If you'd like to provide some I'll happily retract my statement. For what it's worth 8 figures is small potatoes, Bitfinex literally grabbed 800M worth of their reserves one time, so we know they have some money in the piggy bank. They have some cash, but way, way, way less than they would require for a semblance of actual legitimacy. Otherwise, everything I posted is directly from their legal page and whitepaper.
- Jkol 5y ago
  what are you talking about? you absolutely can redeem USDT for dollars...
jpmattia 5y ago
> Or more likely tether isn’t backed by anything at all. In order to believe this, you have to believe that Leticia James got the data from the NYAG subpoenas, and then ignored the fact that Tether has no backing. So no, not "more likely".
- deleted 5y ago
  [deleted]
- deleted 5y ago
  [deleted]
- arcticbull 5y ago
  Did you read the settlement? [1] > New York Attorney General Letitia James’ office says it found that Tether sometimes held no reserves to back its cryptocurrency’s dollar peg. It said that, from mid-2017, the company had no access to banking and misled clients about liquidity issues. [2] It also depends on what you believe the role of that settlement was. Some speculated it was a trial balloon for a federal suit. [1] 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... [2] https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settlement-with-new-york-attorney-general.html https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle...
  - jpmattia 5y ago
    > Did you read the settlement? Yes. It says that tether held securities/receivables denominated in dollars rather than actual dollars, despite Tether's claim that they held dollars. I could not find anywhere that the settlement claimed "no reserves", despite CNBC's quote. [edit: It came out of the AG press release, not the settlement. As near as I can tell the settlement makes no representation that tether is unbacked, only that it is unbacked directly by US dollars, which was the Tether advertising up until 2017.]
    - arcticbull 5y ago
      They lost all access to banking meaning that there was no physical way for them to create redeem Tethers. That makes it de facto un-backed. This is addressed in 14/ through 18/. They lost access to banking, and continued to issue Tethers. > 18/ Because Tether did not have a significant bank relationship in its name from at least March 2017 until September 15, 2017, it could not directly process any fiat deposits for purchases of Tethers by customers on either the Tether website or via the Bitfinex trading platform. And yet in that period they issued some 400M tethers.
staplers 5y ago
Most bank notes aren't "backed by anything". Reserve requirements are now zero for banks. Source: https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.federalreserve.gov/monetarypolicy/reservereq.htm
- killingtime74 5y ago
  Government is something. They can tax and print money.
- acheron 5y ago
  You have to pay the taxman on April 15. He’s going to want US dollars. If you don’t pay up, the men with guns come. That’s “backing” more real than shiny yellow metal.
  - staplers 5y ago
    So one could say the US dollar is backed by violence? Also, you didn't address reserve requirements.
anonymoushn 5y ago
The Tether attestation earlier this year is by my fund's auditor, and they seem in my experience to be sufficiently diligent.
fnordfnordfnord 5y ago
>These dudes are a complete scam but as long as BTC goes to the moon nobody seems to care. Chuckles... I'm in danger.

Aperocky 5y ago

LOL Evergrande is a ticking time bomb. Assets frozen by a Chinese bank just a week ago, and before that they were peddling CP in the range of 12% annual... It's about to explode.

DebtDeflation 5y ago

>This thread speculates that Tether’s commercial paper may be in Chinese real estate The simpler answer is Tether's commercial paper was issued by Bitfinex, or some shell company owned by Bitfinex.