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People are saying the exchanges borrowed the tokens from each other, produced a snapshot of the reserves, and then shipped the tokens to the next exchange to do
by ww520 4y ago
People are saying the exchanges borrowed the tokens from each other, produced a snapshot of the reserves, and then shipped the tokens to the next exchange to do the same thing. People were seeing large outflow of tokens from one address to another.
- LudwigNagasena 4y agoWhat “snapshots”? All transactions are visible on the chain. I don’t get how that is supposed to help. Could as well just use Photoshop?
- mikeyouse 4y agoThey rely on 3rd party attestations where an audit firm verifies that when eg Tether says they have $100 cash, 1 btc and 1 eth, they actually do. The issue comes when these “point-in-time attestations” are gamed by eg taking a 1-day loan the day before the statements are sent so that the cash balance qualifies.
- dd36 4y agoThat would never fly with a real audit. You’d perform a triple tie out and the incoming cash transaction would have to be recorded. And you never do a single day.
- acjohnson55 4y agoProbably why very few of these organizations do real audits.
- pifm_guy 4y agoThe audit documents make clear they are point-in-time. I'm sure if they could do an audit for a full year/quarter, they would. But they didn't, so they can't.
- dd36 4y agoThey can. Anyone that won’t should be shut down immediately.