4 ms·

The CFTC claims to be helping end-customers by doing this kind of thing, but it is really taking money that could have been distributed off the table. Fining (a

by nickff 5y ago

The CFTC claims to be helping end-customers by doing this kind of thing, but it is really taking money that could have been distributed off the table. Fining (and perhaps requiring the dismissal of) Tether's corporate officers would likely instill more discipline, but fining the company just hurts the customer.

klyrs 5y ago
No. This teaches scammers and customers alike that this is a risky business. Fining the corporate officers is almost certainly off the table, because Tether appears to be some form of limited liability corporation (but I don't know anything about the law in HK). Play stupid games, win stupid prizes. I'd hope the founders end up in jail for what appears to be blatant fraud... but chances are, they'll just move on to the next thing after Tether crumples.
- nickff 5y ago
  The CFTC mission statement is: >"The mission of the Commodity Futures Trading Commission is to promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation." I don't see how punishing customers accomplishes that goal.
  - klyrs 5y ago
    Let's read that carefully, now. The CFTC provides "sound regulation," not insurance. Insurance protects customers. Regulation by the CFTC is meant to protect "the U.S. derivatives markets." They aren't there to protect customers. If the customers wanted a safe investment, they should have used an insured vehicle for that.
tdeck 5y ago
It would be better to confiscate Tether's entire reserve, force them to allow tether holders to cash out (for fractional amounts), and punish the execs directly.
- nickff 5y ago
  That would make sense to me, though it may be possible (and less disruptive) to allow tether to continue under new management.
  - Hamuko 5y ago
    This sounds a lot like letting Bernard L. Madoff Investment Securities LLC to "continue under new management" in order to be less disruptive.
    - nickff 5y ago
      Madoff’s fund was insolvent; I am not sure whether the same is true of Tether. There’s no need to liquidate a solvent entity.
FireBeyond 5y ago
> perhaps requiring the dismissal of) Tether's corporate officers That's okay, they'll just go to work for Bitfinex. Remember when the two claimed they were independent? And then Bitfinex loaned Tether $800M, and we'll call the two people who signed the loan contract for Bitfinex "Corporate Officer A" and "Corporate Officer B". Meanwhile, on the other side of the contract, we'll call the people who signed on behalf of Tether uhh... "Corporate Officer A" and "Corporate Officer B". Or they'll go work for Deltec. Whose Deputy CEO will give interviews saying that "they can see the flow of all the Tether, because we are in the system and can see every transaction". Another legit, arms-length financial relationship, evidently...

by nickff 5y ago

klyrs 5y ago

No. This teaches scammers and customers alike that this is a risky business. Fining the corporate officers is almost certainly off the table, because Tether appears to be some form of limited liability corporation (but I don't know anything about the law in HK). Play stupid games, win stupid prizes. I'd hope the founders end up in jail for what appears to be blatant fraud... but chances are, they'll just move on to the next thing after Tether crumples.

nickff 5y ago
The CFTC mission statement is: >"The mission of the Commodity Futures Trading Commission is to promote the integrity, resilience, and vibrancy of the U.S. derivatives markets through sound regulation." I don't see how punishing customers accomplishes that goal.
- klyrs 5y ago
  Let's read that carefully, now. The CFTC provides "sound regulation," not insurance. Insurance protects customers. Regulation by the CFTC is meant to protect "the U.S. derivatives markets." They aren't there to protect customers. If the customers wanted a safe investment, they should have used an insured vehicle for that.

tdeck 5y ago

It would be better to confiscate Tether's entire reserve, force them to allow tether holders to cash out (for fractional amounts), and punish the execs directly.

nickff 5y ago
That would make sense to me, though it may be possible (and less disruptive) to allow tether to continue under new management.
- Hamuko 5y ago
  This sounds a lot like letting Bernard L. Madoff Investment Securities LLC to "continue under new management" in order to be less disruptive.
  - nickff 5y ago
    Madoff’s fund was insolvent; I am not sure whether the same is true of Tether. There’s no need to liquidate a solvent entity.

FireBeyond 5y ago

> perhaps requiring the dismissal of) Tether's corporate officers That's okay, they'll just go to work for Bitfinex. Remember when the two claimed they were independent? And then Bitfinex loaned Tether $800M, and we'll call the two people who signed the loan contract for Bitfinex "Corporate Officer A" and "Corporate Officer B". Meanwhile, on the other side of the contract, we'll call the people who signed on behalf of Tether uhh... "Corporate Officer A" and "Corporate Officer B". Or they'll go work for Deltec. Whose Deputy CEO will give interviews saying that "they can see the flow of all the Tether, because we are in the system and can see every transaction". Another legit, arms-length financial relationship, evidently...