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Tether?... withdrawals? Not sure what you mean here. Do you mean conversion? With BTC, 99% of users could withdraw their BTC from the exchange and it would ha

Tether?... withdrawals? Not sure what you mean here. Do you mean conversion? With BTC, 99% of users could withdraw their BTC from the exchange and it would have relatively little effect on price (although there might be volatility). Trading for USD would impact the price, and I'm suspecting that's what you mean by "withdrawal". But trading anything into anything else devalues it relative to the other thing. You could say the same thing about a stock. If everyone holding Alphabet decided to try to sell it tomorrow, the price would crater, because that's how markets work. This not the same thing as a Ponzi scheme.

rcme 4y ago
Tether supports redemptions of USDT to USD: https://tether.to/es/redeem-tethers-to-your-bank-account/ https://tether.to/es/redeem-tethers-to-your-bank-account/
- lmm 4y ago
  They claim to, if you meet their verification requirements, and if you're requesting enough. What's the betting that their account verification would happen to have some technical issues during any crisis?
- arcticbull 4y ago
  They claim to but nobody has posted proof that they got their money. Their terms of service at tether.to/legal says they can basically deny or indefinitely delay redemptions arbitrarily, and the only people who backed up Tether's claims publicly are SBF and Trabucco and I'm not sure I believe them anymore.
  - SilasX 4y ago
    If someone didn’t get their money when they tried to redeem, they would definitely scream bloody murder about that. So far, no such party has.
    - arcticbull 4y ago
      They're simply not incentivized to do that. If they did their USDT would actually become worthless. If they said nothing and simply exchanged it to the next fool, they get their money. Contractually, Tether doesn't allow redemptions from most people. New Yorkers are excluded thanks to the NYAG settlement. US persons are (or were when I checked) blanket excluded in their terms. Of the remainder, only their 'customers' as defined at their sole discretion are eligible for redemptions. Then, you have to meet minimum transaction size requirements ($100K I believe) and also pay their fees. What individual would bother doing all that when they can hit 'sell' on Coinbase? So once the retail rubes are ruled out, you've really only got gigaholders whose fate is so tied to USDT's continued existence and value that pantsing the emperor leaves them rekt.
      - SilasX 4y ago
        Okay. So your argument requires no one to ever pull the trigger for mutually assured destruction in his case, over a broad universe of non-cooperating actors, and even if they had another way to benefit from the collapse of crypto that they would be causing. That still leaves it in a tenuous position. Edit: for your later addition: >What individual would bother doing all that when they can hit 'sell' on Coinbase? In addition to the above, someone doing an arb play during any one of tether’s many “it’s gonna die this time for real” depeggings.
        arcticbull 4y ago
        The thing is it's not really speculation. The CFTC and NYAG statements said in no uncertain terms that there were long periods of time where Tether did not have the money to cover their obligations. Letitia James says: > 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. The CFTC says: > As found in the order, Tether held sufficient fiat reserves in its accounts to back USDT tether tokens in circulation for only 27.6% of the days in a 26-month sample time period from 2016 through 2018. I don't personally think that it's impossible to redeem, I think they're almost guaranteed not to be good for all outstanding Tethers. I think they keep some small pool of liquidity to satisfy certain key partners, and gamble with the rest of it hoping for yield they can take off the table for themselves. I strongly suspect they got ruined during the downturn. They had a ton of Celsius equity, for instance. I think they loan tethers to institutional players in the space without collateral, too. [edit] I'm not sure BFX actually arbs the peg, I think they stopped? I'm trying to find my source. However, I do know Alameda arbed the peg. > Edit: for your later addition: Sorry for the ninja add.
paulryanrogers 4y ago
Except stocks don't claim to be pegged to, or backed by, anything. If Tether isn't backed 1-to-1 then it looks more like a bank, and may be subject to a lot more regulation.
- pcthrowaway 4y ago
  Of course, I wasn't claiming Tether works the same way. I was merely responding to the idea that bitcoin "gains" aren't real because people haven't "withdrawn"
- arcticbull 4y ago
  Money market funds do, but of course, they're heavily regulated securities.
lmm 4y ago
The Tether-Bitcoin complex is a Ponzi scheme, because the profits that people have seen from them have been paid out of (newer) deposits.
tsimionescu 4y ago
> If everyone holding Alphabet decided to try to sell it tomorrow, the price would crater, because that's how markets work. Not necessarily - Alphabet could prop up the price by using its cash and taking out loans on the company itself, if the price of the shares is truly in line with the value of the company.
deleted 4y ago
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rcme 4y ago

Tether supports redemptions of USDT to USD: https://tether.to/es/redeem-tethers-to-your-bank-account/ https://tether.to/es/redeem-tethers-to-your-bank-account/

lmm 4y ago
They claim to, if you meet their verification requirements, and if you're requesting enough. What's the betting that their account verification would happen to have some technical issues during any crisis?
arcticbull 4y ago
They claim to but nobody has posted proof that they got their money. Their terms of service at tether.to/legal says they can basically deny or indefinitely delay redemptions arbitrarily, and the only people who backed up Tether's claims publicly are SBF and Trabucco and I'm not sure I believe them anymore.
- SilasX 4y ago
  If someone didn’t get their money when they tried to redeem, they would definitely scream bloody murder about that. So far, no such party has.
  - arcticbull 4y ago
    They're simply not incentivized to do that. If they did their USDT would actually become worthless. If they said nothing and simply exchanged it to the next fool, they get their money. Contractually, Tether doesn't allow redemptions from most people. New Yorkers are excluded thanks to the NYAG settlement. US persons are (or were when I checked) blanket excluded in their terms. Of the remainder, only their 'customers' as defined at their sole discretion are eligible for redemptions. Then, you have to meet minimum transaction size requirements ($100K I believe) and also pay their fees. What individual would bother doing all that when they can hit 'sell' on Coinbase? So once the retail rubes are ruled out, you've really only got gigaholders whose fate is so tied to USDT's continued existence and value that pantsing the emperor leaves them rekt.
    - SilasX 4y ago
      Okay. So your argument requires no one to ever pull the trigger for mutually assured destruction in his case, over a broad universe of non-cooperating actors, and even if they had another way to benefit from the collapse of crypto that they would be causing. That still leaves it in a tenuous position. Edit: for your later addition: >What individual would bother doing all that when they can hit 'sell' on Coinbase? In addition to the above, someone doing an arb play during any one of tether’s many “it’s gonna die this time for real” depeggings.
      - arcticbull 4y ago
        The thing is it's not really speculation. The CFTC and NYAG statements said in no uncertain terms that there were long periods of time where Tether did not have the money to cover their obligations. Letitia James says: > 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. The CFTC says: > As found in the order, Tether held sufficient fiat reserves in its accounts to back USDT tether tokens in circulation for only 27.6% of the days in a 26-month sample time period from 2016 through 2018. I don't personally think that it's impossible to redeem, I think they're almost guaranteed not to be good for all outstanding Tethers. I think they keep some small pool of liquidity to satisfy certain key partners, and gamble with the rest of it hoping for yield they can take off the table for themselves. I strongly suspect they got ruined during the downturn. They had a ton of Celsius equity, for instance. I think they loan tethers to institutional players in the space without collateral, too. [edit] I'm not sure BFX actually arbs the peg, I think they stopped? I'm trying to find my source. However, I do know Alameda arbed the peg. > Edit: for your later addition: Sorry for the ninja add.

paulryanrogers 4y ago

Except stocks don't claim to be pegged to, or backed by, anything. If Tether isn't backed 1-to-1 then it looks more like a bank, and may be subject to a lot more regulation.

pcthrowaway 4y ago
Of course, I wasn't claiming Tether works the same way. I was merely responding to the idea that bitcoin "gains" aren't real because people haven't "withdrawn"
arcticbull 4y ago
Money market funds do, but of course, they're heavily regulated securities.

lmm 4y ago

The Tether-Bitcoin complex is a Ponzi scheme, because the profits that people have seen from them have been paid out of (newer) deposits.

tsimionescu 4y ago

> If everyone holding Alphabet decided to try to sell it tomorrow, the price would crater, because that's how markets work. Not necessarily - Alphabet could prop up the price by using its cash and taking out loans on the company itself, if the price of the shares is truly in line with the value of the company.

deleted 4y ago

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