4 ms·

Did the 2008 subprime mortgage crisis completely go out of the consciousness of everyone? Private companies doing "audits" on securities that they have an incen

by alexb_ 5y ago

Did the 2008 subprime mortgage crisis completely go out of the consciousness of everyone? Private companies doing "audits" on securities that they have an incentive to say are better than they actually are is not going to give anything worth a damn. If it's not a government audit, I don't buy it.

benreesman 5y ago
I don’t think any part of the financial system, conventional or crypto is immune from shady dealings. But everyone who didn’t just fall off a truck knows Tether is capitalized at maybe 30%, and there’s a lot of mediocre commercial paper in the assets it does hold. USDC and Tether are completely different asset classes. USDT is casino chips you have to buy to play the low-cap alt-coin slot machine. USDC has a de facto address within reach of the FBI.
- drsnow 5y ago
  "USDC has a de facto address within reach of the FBI." What does this mean?
  - deleted 5y ago
    [deleted]
  - andruby 5y ago
    That Coinbase, the US company, can be held accountable for USDC, and falls within the reach of the FBI. If USDT fails and goes to 0, people will lose their money, and probably no government will be able to go after the creators of USDT (Bitfinex?) and their "collateral". If USDC fails, the US government can actually make Coinbase responsible. And that's a public company with a 51B USD market cap. As a holder of USDC, you could reasonably expect to see some money back.
    - jqpabc123 5y ago
      ... you could reasonably expect to see some money back. Maybe, maybe not. USDC is not legal tender. Coinbase could easily argue it is nothing but monopoly money with a value of $0USD.
      - benreesman 5y ago
        Bankruptcy proceedings start complicated with individuals and go straight up from there, so you're definitely right to point out that there are no guarantees. But the point is that the USDT people are already some combination of accused/investigated-for/sanctioned-for misrepresenting the amount and quality of the collateral, seem to have very little to lose by doubling down and to many (most?) people look like a worse credit risk than CoinBase.

by alexb_ 5y ago

benreesman 5y ago

I don’t think any part of the financial system, conventional or crypto is immune from shady dealings. But everyone who didn’t just fall off a truck knows Tether is capitalized at maybe 30%, and there’s a lot of mediocre commercial paper in the assets it does hold. USDC and Tether are completely different asset classes. USDT is casino chips you have to buy to play the low-cap alt-coin slot machine. USDC has a de facto address within reach of the FBI.

drsnow 5y ago
"USDC has a de facto address within reach of the FBI." What does this mean?
- deleted 5y ago
  [deleted]
- andruby 5y ago
  That Coinbase, the US company, can be held accountable for USDC, and falls within the reach of the FBI. If USDT fails and goes to 0, people will lose their money, and probably no government will be able to go after the creators of USDT (Bitfinex?) and their "collateral". If USDC fails, the US government can actually make Coinbase responsible. And that's a public company with a 51B USD market cap. As a holder of USDC, you could reasonably expect to see some money back.
  - jqpabc123 5y ago
    ... you could reasonably expect to see some money back. Maybe, maybe not. USDC is not legal tender. Coinbase could easily argue it is nothing but monopoly money with a value of $0USD.
    - benreesman 5y ago
      Bankruptcy proceedings start complicated with individuals and go straight up from there, so you're definitely right to point out that there are no guarantees. But the point is that the USDT people are already some combination of accused/investigated-for/sanctioned-for misrepresenting the amount and quality of the collateral, seem to have very little to lose by doubling down and to many (most?) people look like a worse credit risk than CoinBase.