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How can anybody be surprised ? The 2 biggest players - Tether and Binance are much worse and still very well alive. Both are several times bigger (on paper) th

How can anybody be surprised ? The 2 biggest players - Tether and Binance are much worse and still very well alive. Both are several times bigger (on paper) than FTX. Binance is already banned in most countries and without headquarters. Do anybody believes they have a proper gouvernance ? Tether was proved to lie about it réserves several times, recently started publishing attestations about reserves - attestations that are obviously false - the numbers don’t really add up. For all we know, both could disappear tomorrow with all the money and nobody would be able to say where and how it’s gone !

radicalbyte 4y ago
> both could disappear tomorrow with all the money If they go then the magic beans are worth $0. In which case - what are the damages? They've ran away with magic beans worth $0. To quote Monty Python: "I mean, what have you got to lose? You know, you come from nothing. You're going back to nothing. What have you lost? Nothing."
- BobbyJo 4y ago
  Tether prints tokens in exchange for money. Them disappearing means they took the money and abandoned their magic bean IOUs.
  - foepys 4y ago
    Do they actually exchange them for money or are they just creating them? There has never been a reputable audit of Tether.
    - discodave 4y ago
      Tether's 'market cap' is like 60 billion or whatever, I think most of that was just created out of thin air, but I think some of it was exchanged for real dollars, like a few percent, maybe a couple of billion dollars. In which case, when the fraud comes crashing down, they will have stolen hundreds of millions, to maybe a couple of billion dollars. Imagine if somebody stole a piece of art worth hundreds of millions of dollars...
      - ludjer 4y ago
        The way I always thought about it was they printed Thether and used it to buy other POS/POW tokens like BTC + Eth, and then sold those for real $$$.
      - sobkas 4y ago
        > Tether's 'market cap' is like 60 billion or whatever, I think most of that was just created out of thin air, but I think some of it was exchanged for real dollars, like a few percent, maybe a couple of billion dollars. In which case, when the fraud comes crashing down, they will have stolen hundreds of millions, to maybe a couple of billion dollars. > Imagine if somebody stole a piece of art worth hundreds of millions of dollars... Buy some bs art for peanuts, get bs appraisal that it's worth millions, donate it to some bs gallery and reap tax deductions. Art was turned into a tax evasion scheme, and it compromised any value it ever had.
      - spaceman_2020 4y ago
        They did handle several billion in redemptions without any hiccups when Luna collapsed. But then again, everyone knows that if Tether blows up, every single crypto entity collapses. If Tether had a hole of a few billion, other entities might have stepped in. Will they do so again? Hard to tell. Regardless, Tether is a ticking time bomb. It would be a fantastic business if they did indeed have all that money. 70B in depsoits. Even in safe short-term t-bills, that's a crap load of risk-free interest income for basically doing nothing.
        deleted 4y ago
        [deleted]
    - cypress66 4y ago
      Yes, of course. In fact its market cap decreased by like 20B at one point.
  - digger250 4y ago
    You'd still have your token though.
- adbachman 4y ago
  Tether and Bitfinex have the same owner. They print the Tethers for free, move them to an exchange, exchange them for Bitcoin or other token, convert that to USD. As long as it happens slowly enough and with enough steps, that's 1 USDT converted to 1 USD. The damages are everyone with money in a USDT denominated exchange who believes that the actual USD still exists somewhere in the system. It left months / years ago, the people still playing are the ones holding the empty bag.
- throwaheyy 4y ago
  They received dollars for the magic beans, and it’s the dollars that are worth something. It’s a game of musical chairs where people holding the magic beans are dancing around and the dollars are the chairs. There’s only so many dollars to go around when the music stops, and they will go to the exchanges and the ones who “cashed out”.
memish 4y ago
What's interesting is how little scrutiny was applied to FTX and they're the one who lost people's money. Tether has been under intense scrutiny for years and is still working just fine. No one has lost their money in Tether despite huge outflow events. There's a lesson in here.
- PragmaticPulp 4y ago
  FTX is younger than Tether and it was actually subject to scrutiny. Tether has also been subject to scrutiny and was found, at the time, to be lying about their reserves and backing. And this was before they printed a lot more! It doesn’t make sense to write them off as having withstood the test of time when they literally failed to stand up to the first legal scrutiny that got access to their books.
  - camjohnson26 4y ago
    The lesson learned is that frauds can go on for a long time. It took decades and a once in a generation market crash to expose Bernie Madoff. Enron spent years running their sketchy accounting. Wirecard was only finally exposed after the German government essentially lobbied on their behalf against the journalists trying to expose the fraud.
    - jandrese 4y ago
      These frauds can continue so long as they can continue to grow or at least maintain a steady state. Since they promise higher returns than can be achieved through honest means the liabilities grow faster than assets over time, but so long as nobody tries to realize their gains it's fine. FTX only came down because they pissed off the Binance guy who dumped his position all at once and exposed the fraud. I'm dubious Tether could survive a similar attack. I also think that at least some people investing in these are completely aware of the situation and are ok with it because it means they can beat the market so long as they get out before the whole thing suddenly collapses. Basically playing financial chicken.
      - 4y ago
snapcaster 4y ago
I assume tether is mostly propped up by illegal businesses. I don't hear it discussed much, but what if they do actually have all the money it's just that they got it from drug dealers and oligarchs

radicalbyte 4y ago

> both could disappear tomorrow with all the money If they go then the magic beans are worth $0. In which case - what are the damages? They've ran away with magic beans worth $0. To quote Monty Python: "I mean, what have you got to lose? You know, you come from nothing. You're going back to nothing. What have you lost? Nothing."

BobbyJo 4y ago
Tether prints tokens in exchange for money. Them disappearing means they took the money and abandoned their magic bean IOUs.
- foepys 4y ago
  Do they actually exchange them for money or are they just creating them? There has never been a reputable audit of Tether.
  - discodave 4y ago
    Tether's 'market cap' is like 60 billion or whatever, I think most of that was just created out of thin air, but I think some of it was exchanged for real dollars, like a few percent, maybe a couple of billion dollars. In which case, when the fraud comes crashing down, they will have stolen hundreds of millions, to maybe a couple of billion dollars. Imagine if somebody stole a piece of art worth hundreds of millions of dollars...
    - ludjer 4y ago
      The way I always thought about it was they printed Thether and used it to buy other POS/POW tokens like BTC + Eth, and then sold those for real $$$.
    - sobkas 4y ago
      > Tether's 'market cap' is like 60 billion or whatever, I think most of that was just created out of thin air, but I think some of it was exchanged for real dollars, like a few percent, maybe a couple of billion dollars. In which case, when the fraud comes crashing down, they will have stolen hundreds of millions, to maybe a couple of billion dollars. > Imagine if somebody stole a piece of art worth hundreds of millions of dollars... Buy some bs art for peanuts, get bs appraisal that it's worth millions, donate it to some bs gallery and reap tax deductions. Art was turned into a tax evasion scheme, and it compromised any value it ever had.
    - spaceman_2020 4y ago
      They did handle several billion in redemptions without any hiccups when Luna collapsed. But then again, everyone knows that if Tether blows up, every single crypto entity collapses. If Tether had a hole of a few billion, other entities might have stepped in. Will they do so again? Hard to tell. Regardless, Tether is a ticking time bomb. It would be a fantastic business if they did indeed have all that money. 70B in depsoits. Even in safe short-term t-bills, that's a crap load of risk-free interest income for basically doing nothing.
      - deleted 4y ago
        [deleted]
  - cypress66 4y ago
    Yes, of course. In fact its market cap decreased by like 20B at one point.
- digger250 4y ago
  You'd still have your token though.
adbachman 4y ago
Tether and Bitfinex have the same owner. They print the Tethers for free, move them to an exchange, exchange them for Bitcoin or other token, convert that to USD. As long as it happens slowly enough and with enough steps, that's 1 USDT converted to 1 USD. The damages are everyone with money in a USDT denominated exchange who believes that the actual USD still exists somewhere in the system. It left months / years ago, the people still playing are the ones holding the empty bag.
throwaheyy 4y ago
They received dollars for the magic beans, and it’s the dollars that are worth something. It’s a game of musical chairs where people holding the magic beans are dancing around and the dollars are the chairs. There’s only so many dollars to go around when the music stops, and they will go to the exchanges and the ones who “cashed out”.

memish 4y ago

What's interesting is how little scrutiny was applied to FTX and they're the one who lost people's money. Tether has been under intense scrutiny for years and is still working just fine. No one has lost their money in Tether despite huge outflow events. There's a lesson in here.

PragmaticPulp 4y ago
FTX is younger than Tether and it was actually subject to scrutiny. Tether has also been subject to scrutiny and was found, at the time, to be lying about their reserves and backing. And this was before they printed a lot more! It doesn’t make sense to write them off as having withstood the test of time when they literally failed to stand up to the first legal scrutiny that got access to their books.
- camjohnson26 4y ago
  The lesson learned is that frauds can go on for a long time. It took decades and a once in a generation market crash to expose Bernie Madoff. Enron spent years running their sketchy accounting. Wirecard was only finally exposed after the German government essentially lobbied on their behalf against the journalists trying to expose the fraud.
  - jandrese 4y ago
    These frauds can continue so long as they can continue to grow or at least maintain a steady state. Since they promise higher returns than can be achieved through honest means the liabilities grow faster than assets over time, but so long as nobody tries to realize their gains it's fine. FTX only came down because they pissed off the Binance guy who dumped his position all at once and exposed the fraud. I'm dubious Tether could survive a similar attack. I also think that at least some people investing in these are completely aware of the situation and are ok with it because it means they can beat the market so long as they get out before the whole thing suddenly collapses. Basically playing financial chicken.
    - 4y ago

snapcaster 4y ago

I assume tether is mostly propped up by illegal businesses. I don't hear it discussed much, but what if they do actually have all the money it's just that they got it from drug dealers and oligarchs