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didn't they just redeem a few billion dollars?

cycrutchfield 4y ago
All they have proven is that 1 USDT >= $0.1 USD. When the bank run really gets going, we will see just what fraction of the money they actually have.
- cowvin 4y ago
  Well technically they proved that that WAS true. We don't know how much money they have backing it now after spending $8B.
ceejayoz 4y ago
Bernie Madoff paid out when people wanted to withdraw, too. Until he couldn't. Fruads often look healthy on the outside right up until the collapse. No one's arguing Tether holds no assets, but they've been very cagey - and frequently, outright fraudulent - about whether they hold enough for their stated model. If Tether was backed 1:1 with Bitcoin, and Bitcoin sank 50%, Tether'd be able to redeem half of their Tethers without an outward indication of issues. "See! We're fine, we're paying out all requests!" https://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal https://ag.ny.gov/press-release/2021/attorney-general-james-... > The OAG’s investigation found that, starting no later than mid-2017, Tether had no access to banking, anywhere in the world, and so for periods of time held no reserves to back tethers in circulation at the rate of one dollar for every tether, contrary to its representations. In the face of persistent questions about whether the company actually held sufficient funds, Tether published a self-proclaimed ‘verification’ of its cash reserves, in 2017, that it characterized as “a good faith effort on our behalf to provide an interim analysis of our cash position.” In reality, however, the cash ostensibly backing tethers had only been placed in Tether’s account as of the very morning of the company’s ‘verification.’ > On November 1, 2018, Tether publicized another self-proclaimed ‘verification’ of its cash reserve; this time at Deltec Bank & Trust Ltd. of the Bahamas. The announcement linked to a letter dated November 1, 2018, which stated that tethers were fully backed by cash, at one dollar for every one tether. However, the very next day, on November 2, 2018, Tether began to transfer funds out of its account, ultimately moving hundreds of millions of dollars from Tether’s bank accounts to Bitfinex’s accounts. And so, as of November 2, 2018 — one day after their latest ‘verification’ — tethers were again no longer backed one-to-one by U.S. dollars in a Tether bank account. That's not good.
- smoovb 4y ago
  The NYAG release fails to mention - why did they had not have access to banking? Cause the $850m they had in a bank account was frozen. https://bitcoinmagazine.com/culture/bitfinex-files-subpoena-to-recover-850m-in-frozen-bank-accounts https://bitcoinmagazine.com/culture/bitfinex-files-subpoena-... Then, On May 10, 2019 "To alleviate the cash shortfall, BitFinex announced it would conduct a private offering for $1 billion for it's token Unus Sed Leo." SBF, a crypto insider, has said these issues are the growing pains of a company not allowed to use the US banking system and suck with second and third tier banking solutions.
  - ceejayoz 4y ago
    > In its recent subpoena application, Bitfinex claims that these losses were the result of theft or criminal mismanagement by Crypto Capital. Without signing a formal agreement, Bitfinex entrusted $880 million with Crypto Capital and since then has been unable to access it. In a bid to avoid disclosing these difficulties to its users, Bitfinex initiated the scheme to “borrow” money from Tether. You think this makes them look less sleazy? Who gives someone nearly a billion dollars without a contract?
    - smoovb 4y ago
      The early days of crypto were an under-regulated wild west but most projects are now moving from sleazy to more formal regulation. There is evidence that Tether is making moves to improve.
      - ceejayoz 4y ago
        > There is evidence that Tether is making moves to improve. Such as? There is concrete evidence that Tether has repeatedly defrauded the field.
        smoovb 4y ago
        The fact the NYAG settled for $18.5M is as concrete as it gets. If there were more wrong doing than a frozen bank account, why would NYAG settle with no wrongdoing admitted?

All they have proven is that 1 USDT >= $0.1 USD. When the bank run really gets going, we will see just what fraction of the money they actually have.

cowvin 4y ago
Well technically they proved that that WAS true. We don't know how much money they have backing it now after spending $8B.

ceejayoz 4y ago

Bernie Madoff paid out when people wanted to withdraw, too. Until he couldn't. Fruads often look healthy on the outside right up until the collapse. No one's arguing Tether holds no assets, but they've been very cagey - and frequently, outright fraudulent - about whether they hold enough for their stated model. If Tether was backed 1:1 with Bitcoin, and Bitcoin sank 50%, Tether'd be able to redeem half of their Tethers without an outward indication of issues. "See! We're fine, we're paying out all requests!" https://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal https://ag.ny.gov/press-release/2021/attorney-general-james-... > The OAG’s investigation found that, starting no later than mid-2017, Tether had no access to banking, anywhere in the world, and so for periods of time held no reserves to back tethers in circulation at the rate of one dollar for every tether, contrary to its representations. In the face of persistent questions about whether the company actually held sufficient funds, Tether published a self-proclaimed ‘verification’ of its cash reserves, in 2017, that it characterized as “a good faith effort on our behalf to provide an interim analysis of our cash position.” In reality, however, the cash ostensibly backing tethers had only been placed in Tether’s account as of the very morning of the company’s ‘verification.’ > On November 1, 2018, Tether publicized another self-proclaimed ‘verification’ of its cash reserve; this time at Deltec Bank & Trust Ltd. of the Bahamas. The announcement linked to a letter dated November 1, 2018, which stated that tethers were fully backed by cash, at one dollar for every one tether. However, the very next day, on November 2, 2018, Tether began to transfer funds out of its account, ultimately moving hundreds of millions of dollars from Tether’s bank accounts to Bitfinex’s accounts. And so, as of November 2, 2018 — one day after their latest ‘verification’ — tethers were again no longer backed one-to-one by U.S. dollars in a Tether bank account. That's not good.

smoovb 4y ago
The NYAG release fails to mention - why did they had not have access to banking? Cause the $850m they had in a bank account was frozen. https://bitcoinmagazine.com/culture/bitfinex-files-subpoena-to-recover-850m-in-frozen-bank-accounts https://bitcoinmagazine.com/culture/bitfinex-files-subpoena-... Then, On May 10, 2019 "To alleviate the cash shortfall, BitFinex announced it would conduct a private offering for $1 billion for it's token Unus Sed Leo." SBF, a crypto insider, has said these issues are the growing pains of a company not allowed to use the US banking system and suck with second and third tier banking solutions.
- ceejayoz 4y ago
  > In its recent subpoena application, Bitfinex claims that these losses were the result of theft or criminal mismanagement by Crypto Capital. Without signing a formal agreement, Bitfinex entrusted $880 million with Crypto Capital and since then has been unable to access it. In a bid to avoid disclosing these difficulties to its users, Bitfinex initiated the scheme to “borrow” money from Tether. You think this makes them look less sleazy? Who gives someone nearly a billion dollars without a contract?
  - smoovb 4y ago
    The early days of crypto were an under-regulated wild west but most projects are now moving from sleazy to more formal regulation. There is evidence that Tether is making moves to improve.
    - ceejayoz 4y ago
      > There is evidence that Tether is making moves to improve. Such as? There is concrete evidence that Tether has repeatedly defrauded the field.
      - smoovb 4y ago
        The fact the NYAG settled for $18.5M is as concrete as it gets. If there were more wrong doing than a frozen bank account, why would NYAG settle with no wrongdoing admitted?