[HN Gopher] Tether ordered to produce documents showing backing ...
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Tether ordered to produce documents showing backing of USDT [pdf]
Author : seo-speedwagon
Score : 317 points
Date : 2022-09-21 15:06 UTC (7 hours ago)
(HTM) web link (storage.courtlistener.com)
(TXT) w3m dump (storage.courtlistener.com)
| tiku wrote:
| I highly doubt they have given out Tethers for free, exchanges
| paid dollars for them. And even banks don't have all their money
| in stock. That is why it is illegal to incite bankruns.
| ogogmad wrote:
| They can print Tether for free and use it to buy crypto. This
| pumps the price and then they can sell.
|
| Also, Tether is owned by Bitfinex, which enables them to print
| Tether to cover their own losses.
| Tenoke wrote:
| You can do the same if you have a lot of USD in the first
| place or alternatively with reserves. Printing Tether isn't
| required and it is questionable if a pump and dump at quite
| this basic of a level is profitable on average.
| dsr_ wrote:
| "There is this other scam you can commit with less work" is
| not an argument that the first scam isn't happening.
| Tenoke wrote:
| It's not 'other scams'. It's that printing - the only
| thing Tether can do which others can't and seemingly the
| main reason why they suggest Tether is the one doing it -
| doesn't add much of anything to the scam.
| banannaise wrote:
| The mechanism of a pump-and-dump like this is to spend your
| company's assets to boost the price of your personal
| (crypto) holdings. The exchange and the coin don't profit
| from the scheme; they lose money, while the owners of
| Tether/Bitfinex win big with their personal assets.
|
| It's a way of cashing out company funds.
| Closi wrote:
| > They can print Tether for free and use it to buy crypto.
|
| Ah yes, they can just operate a classic ponzi scheme!
|
| They can use new investors money to cover for the ficticious
| assets that previous investers were told that they hold!
| paulgb wrote:
| > They can print Tether for free and use it to buy crypto.
| This pumps the price and then they can sell.
|
| I've never understood this theory. It implies that the market
| moves when they buy, but not when they sell?
|
| If you're unscrupulous and you have a money printer, you
| don't need to resort to market manipulation to print money,
| you just... print money. And you can offer a 20% APR to
| people who are willing to pay real USD for your money, to
| keep the music from stopping too early.
| notahacker wrote:
| > I've never understood this theory. It implies that the
| market moves when they buy, but not when they sell?
|
| That's not an unreasonable assumption when the asset isn't
| held and bought mostly by professionals trading based on
| its fundamentals, but by people that get very excited by
| "line goes up" and diehard HODLers. This isn't specific to
| Tether, it's standard pump and dump behaviour. Printing
| money is great, but getting further gains on your printed
| money (and a plausible "massive growth in crypto interest"
| story to make your printed money seem more real) is better
| still.
|
| Plus chances are Bitfinex did the pump bit but actually
| holds onto a lot of the crypto it bought anyway.
| paulgb wrote:
| Successful pump-and-dumps usually involve spreading a
| narrative (e.g. false rumors) in addition to the price
| action, though.
|
| > Plus chances are Bitfinex did the pump bit but actually
| holds onto a lot of the crypto it bought anyway.
|
| Yeah, this is a theory that makes more sense to me.
| Tether may have driven up the price over time by buying
| and holding bitcoin. The more they bought, the more they
| drove up the price, reinforcing their decision to buy.
| Similar to Archegos, but with bitcoin instead of
| equities.
| PragmaticPulp wrote:
| > I highly doubt they have given out Tethers for free,
| exchanges paid dollars for them.
|
| Tether and Bitfinex (one of the biggest exchanges) are both
| owned by the same people: iFinex. They're effectively one in
| the same.
|
| Not coincidentally, both of them have already been caught and
| fined for Tether not being fully backed and for commingling
| reserves and customer funds:
| https://www.cftc.gov/PressRoom/PressReleases/8450-21
|
| Also, you can't assume that exchanges paid dollars for them.
| Tether could print a lot of Tethers, transfer them to
| exchanges, and exchange them for crypto. No dollars are
| involved in the transaction and it all relies on everyone
| believing that Tethers are worth $1 because Tether says they
| are.
| Tenoke wrote:
| Bitfinex has 42 times less volume than Binance so it likely
| doesn't add up to all that much of the total exchange USDT
| usage to make a big difference.
|
| 0. https://www.coingecko.com/en/exchanges
| skybrian wrote:
| Not for free, but they very likely exchanged Tether for assets
| that are not dollars and whose value has since dropped. In some
| cases we know that those assets were very dubious and they had
| trouble getting the money back.
|
| Banks have losses too. But they raise money by selling stock,
| which provides a cushion against losses. The stockholders lose
| money first.
| vuln wrote:
| > but they raise money by selling stock
|
| How does this work with credit unions? The one I joined I had
| to "buy a share" for 5$ and keep that minimum of one share
| (5$) to keep my account active. The credit union is not
| publicly traded so the shareholders are the account holders.
| skybrian wrote:
| Good question. Looks like technically, you are a
| shareholder and get dividends instead of interest for a
| "share draft account" [1] which is backed by share
| insurance. [2]
|
| I don't understand how that can work as risk capital. Maybe
| it just isn't.
|
| [1] https://www.investopedia.com/terms/s/share-draft.asp
| [2] https://www.ncua.gov/support-services/share-insurance-
| fund
| erostrate wrote:
| It's less direct than that. Some crypto fund has say 10M$, they
| want to buy a lot of BTC, so they borrow 20M$ denominated in
| USD but settled in USDT from iFinex treasury, and use it to buy
| BTC. iFinex can now claim that they are backed by USD assets,
| crypto fund effectively has taken a leveraged BTC long
| position, pushing BTC up, everybody is happy. Until BTC goes
| down too much or everybody tries to withdraw USDT, or both,
| then everything unravels.
|
| You can also replace "crypto fund" by any crypto project that
| uses leverage to deliver extraordinary returns - as long as
| everything goes up.
| MichaelCollins wrote:
| > _I highly doubt they have given out Tethers for free,
| exchanges paid dollars for them._
|
| Why do you doubt that? They have motive and opportunity, and
| they're obviously not on the level so any appeal to general
| assumptions of honesty go out the window.
| advisedwang wrote:
| They may have spent or lost some of those dollars though!
| jandrese wrote:
| I'm sure they will be able to produce those documents, just so
| long as there are no followup questions or inquires into their
| actual account status.
|
| I don't know why they would stop lying now.
| cuteboy19 wrote:
| They literally invented their own non-GAAP system of
| accounting!
| wmf wrote:
| Doesn't GAAP have some obviously stupid rules about crypto? I
| don't mean to excuse scam accounting but I don't consider
| GAAP automatically optimal either. (Putting aside that Tether
| shouldn't be backed by crypto.)
| rhodorhoades wrote:
| Yeah - GAAP definitely doesn't work with crypto. Is eth an
| asset, currency, or inventory? If I'm a big crypto firm and
| I regularly use eth for chain fees, do I calculate that as
| a sale of an asset? If my eth has appreciated since it's
| purchase, did I just make a sale?
|
| When I'm adding liquidity to a common pair that I utilize a
| lot and get a divergent loss between the two assets, should
| that be impairment at the time of the transaction or only
| when all the coins are converted to USD?
|
| I can go on and on and on about the impossibility to comply
| with tax regulations and crypto. I'm an avid crypto user, I
| like making bots for all the games, I think NFTs are cool
| and always like meeting the programmers turned artists, I
| participate in 10+ exchanges and 50+ liquidity pools across
| the map.
|
| When it came time to do my taxes this last year, I had to
| hire a crypto specific tax person. His advice was that
| every time I transfer crypto off an exchange, it is 'sold'
| for that price and I have to pay taxes on the minuscule
| difference between my purchase price and the 10 seconds it
| take me to transfer into the meta verse. It's literally
| impossible to do it otherwise.
| jandrese wrote:
| I think the rules are "stupid" only in that it would expose
| too much fraud if the companies followed them. Crypto
| currencies are no different than any other speculative
| asset for tax purposes. Treat them like stocks.
| cliftonk wrote:
| Virtually every take I read on this forum is uninformed. To hear
| it straight from the horses mouth, here's Matt Levine + SBF
| getting into the realities of tether (skip to 48 minutes):
| https://open.spotify.com/show/1te7oSFyRVekxMBJUSethH?si=05bd...
|
| I agree with the general sentiment around tether acting very
| opaque / shady. That said:
|
| 1. creation/redemption of tether (read: actual USD wire
| transfers) has been done on the magnitude of billions of dollars
| a time by major players in the space
|
| 2. during UST collapse, something like $15b of tether was
| redeemed in less than 2 weeks. so they obviously had that much
| cash on hand at the time.
|
| 3. the academic paper that attempted to show that tether was
| being created to pump up bitcoin has an extremely simple
| alternative explanation: as bitcoin went up, holders of bitcoin
| sold it for tether on centralized exchanges on the way up.
|
| so, IMO they could very likely have some bad commercial paper on
| their books, but i think its much more likely than tether is
| worth 90 cents on the dollar and not 0, and in the case that it
| is worth 90 cents on the dollar, it would be extremely likely to
| continue to trade at par as there's very unlikely to be a
| scenario which forces any kind of large-scale redemptions.
| darcys22 wrote:
| I think people dont fully understand the risk of debanking in
| crypto. If you go to the regular players with a billion dollars
| in cash, say you are cryptocurrency firm and would like a bank
| account they will turn you around.
|
| This is such a major factor with every cryptocurrency company.
| Especially 5 years ago when tether was made.
|
| Tethers 'dodgy' investments is partially driven by there being
| no other options.
| VHRanger wrote:
| Having looked into tether really deeply I think they're between
| 50% and 90% backed as you stated.
|
| https://www.singlelunch.com/2022/06/14/the-state-of-stableco...
|
| Tether depegging would be an apocalypse nonetheless
| ikeboy wrote:
| This mentions the Celsius loan without mentioning that it was
| overcollateralized and liquidated with no loss to tether
| (confirmed by tether at the time and by Celsius's lawyers in
| court filings).
| VHRanger wrote:
| As noted in the article, they announced that the loan was
| liquidated at a date where the difference in BTC price
| between when the loan was emitted and the loan was
| liquidated was greated than the overcollateralization
| ratio.
|
| It's a fairly easily checkable lie.
| ikeboy wrote:
| This is just nonsense. Please show your math including
| sources for the purported ratio and dates.
| cliftonk wrote:
| definitely agree that if there were a ~50% depeg in tether
| things would get very, very ugly in crypto
| AlexandrB wrote:
| If Tether was 50% backed and there was a depeg it would
| probably be much worse than 50%. Presumably USDT would be
| redeemed at $1 until Tether's reserves were almost gone at
| which point Tether would have to stop accepting redemptions
| and the price of USDT could fall arbitrarily close to $0 in
| a short time.
| phphphphp wrote:
| SBF is not the horse, and he has a vested interest in ensuring
| that the market believes that the market is not built on sand.
|
| Bitfinex and Tether have a history of fraud, of losing money,
| for Tether to be backed today would mean Bitfinex/Tether did a
| complete 180 and went legit after years of bad dealings. Even
| if you believe they did a 180, how did they rectify the mess
| from before they went legit? How did tether become solvent?
| cliftonk wrote:
| and btw there are liquid tether credit risk products you can
| trade if you believe that tether is going to collapse that cost
| around 20bp / month (so something like 40x payout on annualized
| premium if tether goes to 0).
| erostrate wrote:
| Do you know by what mechanism Tether gets CP for USDT? Would
| they be paying CP issuers with USDT directly? What would they
| do with it?
|
| I believe you're right just curious about the mechanism.
| cliftonk wrote:
| They would be paying CP issuers with USD out of a bank
| account (the same USD used for creation/redemption of USDT).
| erostrate wrote:
| So in that theory they do get sufficient USD to cover USDT
| (as opposed to printing it out of thin air) but are using
| it to buy questionable CP.
|
| I think many people believe they don't even have enough USD
| to start with, eg because some of their assets are loans
| collateralised by crypto (such as the Celsius 1B loan).
|
| I believe both are true - Tether printed USDT against non-
| cash, and used some of the actual cash to buy dodgy assets
| for more yield.
| qeternity wrote:
| Taking SBF's word as gospel is about the least informed thing
| you can do. Do you notice how they say things like "redeemed"
| and "backing" which are very vague terms. In a normal security,
| redemption is clearly defined. But Tether isn't normal. We know
| from players like Celsius that Tether will issue loans
| collateralized by crypto. You say yourself it's likely they
| have other toxic assets on their balance sheet.
|
| So imagine this scenario:
|
| 1. I issue a note for $1B to Tether and they send me 1B USDT.
|
| 2. I go about my business, trading crypto, doing whatever, and
| hopefully I end up with more than 1B USDT.
|
| 3. When I redeem, I send my 1B USDT back and Tether retires my
| note (or sends me back my crypto collateral) likely less some
| fees.
|
| No actual dollars changed hands. And yet this fits in exactly
| with their narrative and language.
|
| I mean hell they have issued a huge amount of USDT over
| weekends when you couldn't possibly have wired any money
| (mayyybe some people banked at Deltec and could transfer
| between accounts, or via Finex...maybe)
| rossdavidh wrote:
| If their backing were as solid as you suggest, it is difficult
| to understand why they have been so unwilling to demonstrate
| that fact, given how much uncertainty exists around it. Their
| willingness to sue in NY to keep their backing out of public
| record, does not suggest that they are at ~90%.
| rini17 wrote:
| > as bitcoin went up, holders of bitcoin sold it for tether on
| centralized exchanges on the way up.
|
| How does this work exactly? Who is the counterparty selling
| tether here, and how come it wasn't newly minted USDT?
| laserlight wrote:
| For those who are like me, wondering what the hell is SBF, it
| stands for Sam Bankman-Fried [0]. He is the founder of
| cryptocurrency exchange FTX.
|
| [0] https://en.wikipedia.org/wiki/Sam_Bankman-Fried
| ogogmad wrote:
| It's not backed. Once the Tether scam unravels, it's not clear
| how badly it will affect Bitcoin's price. But it's going to be
| bad.
|
| There's a chance that Tether has been pumping BTC.
| [deleted]
| swalsh wrote:
| USDC is the only reliable stable coin. Some dislike it because
| they have shown that they will use the blacklist feature (which
| USDT has too, to be fair) but frankly, I'd prefer my bank
| backed stablecoin is compliant with US law.
| rossdavidh wrote:
| Well, it's possible "backed", in the sense that there are
| dollar-denominated assets backing it. They've already admitted
| that it's not actual dollars, and that some of them at least
| are foreign assets.
|
| Which probably means it's Chinese dollar-denominated debt,
| perhaps stuff like Evergrande bonds that you could get for
| $0.05 on the dollar. So, it is "backed", perhaps, in that there
| are dollar denominated assets.
|
| But, functionally, it's probably not backed in a way that does
| anyone any good. So your basic point is correct. At some point,
| people rush for the exits, and when they do, BTC may collapse
| with it.
| laserlight wrote:
| What are these dollar-denominated assets? US treasury bonds?
| erichocean wrote:
| > _US treasury bonds?_
|
| Would you accept the lowest rated Chinese junk bonds
| instead?
|
| Asking for a friend...
| JumpCrisscross wrote:
| > _US treasury bonds?_
|
| It's hard to accumulate $100bn Treasuries without the
| dealers noticing.
| rossdavidh wrote:
| No.
| laserlight wrote:
| What are they then?
| vkou wrote:
| Could be a piece of tissue paper with an IOU for a
| trillion dollars from Deadbeat Dan. Could be a deed to
| lovely waterfront property on the moon. Could be a
| controlling interest in Bitfinex. We don't know.
| lottin wrote:
| They won't say.
| michaelt wrote:
| I believe Tether's claim is essentially "We can't tell
| you what dollar-denominated assets we're backed by, or
| get any competent auditors to sign off on our accounts,
| but the reserves are there. Trust us. Would a
| cryptocurrency company lie to you?"
| evdubs wrote:
| From [1]
|
| - U.S. Treasury Bills: $28,856,434,491
|
| - Commercial Paper and Certificates of Deposit:
| $8,402,426,505
|
| - Money Market Funds: $6,810,253,431
|
| - Cash & Bank Deposits: $5,418,232,067
|
| - Reverse Repurchase Agreements: $2,992,015,954
|
| - Non-U.S. Treasury Bills: $397,150,678
|
| - Corporate Bonds, Funds & Precious Metals: $3,486,896,735
|
| - Other Investments: $5,551,836,303
|
| - Secured Loans: $4,494,373,260
|
| - Total: $66,409,619,424
|
| [1] https://assets.ctfassets.net/vyse88cgwfbl/2xJyKdUKicdRU
| WpC9b...
| ufo wrote:
| I wouldn't be surprised if it were even worse than that, e.g.
| promissory notes from Bitfinex (themselves)
| puffoflogic wrote:
| If it's good enough for the SSA why not for tether?
| meepmorp wrote:
| This will be a useful analogy if/when bitfinex gains
| sovereign power along the lines of the US government.
| lazide wrote:
| And the worlds largest military, and one of the worlds
| largest captive tax bases.
| looknee wrote:
| A close friend of mine does banking in Nassau, Bahamas and
| works with Tether, and according to him Tether is where they
| sling all of their lowest rated junk chinese bonds.
|
| He has been telling me to go nowhere near it for the last 5
| years and I have not.
| robocat wrote:
| How has Tether prevented information leaks?
|
| Ex-employee, whistleblower, service dependency, . . .
|
| With billions at stake, there are highly motivated players.
| Similar to paying for dirt on mudge:
| https://news.ycombinator.com/item?id=32823548
| lottin wrote:
| They only have seven employees.
| onepointsixC wrote:
| Which beats the previous highest assets to employee ratio
| of Madoff.
| [deleted]
| epolanski wrote:
| Tether is highly backed by BTC and only partially by cash. Then
| they print Tether to buy Bitcoin which pumps the backing
| value..
| cypherpunks01 wrote:
| Wouldn't Tether have unraveled during the huge amount of
| withdrawals during the Luna collapse? I thought it was going
| to, but surprised that it appears to have made it through
| processing everyone's withdrawals.
| htrp wrote:
| Very few people converted to cash. It was mostly crypto to
| crypto iirc (Luna -> Terra -> Tether -> BTC/ETH)
|
| Also Terra was the algorithmically pegged stablecoin to Luna
| (not Tether in case that was the confusion)
| Tenoke wrote:
| There was sufficient pressure on USDT, as well as cashing
| out to the point of USDT briefly dropping in price by a few
| cents, so this isn't quite accurate.
| hi5eyes wrote:
| UST is the algostable, terra is the chain
| ahnick wrote:
| They are likely not solvent (i.e. they have enough liquid
| funds to cover everyone withdrawing their money all at once),
| but they apparently can cover a high percentage of USDT
| withdrawals. It is still very fishy b/c if you look at the
| lending rates on Bitfinex there is currently an 18.825% APR
| for USD. If there was really zero risk with USDT I think
| you'd see a whole lot more volume pumping through that
| system.
| Canada wrote:
| How much of those are to cover the leverage of customers?
| [deleted]
| liuliu wrote:
| How do we know they processed withdrawals to plain USD and
| how much? Is there any tracker on that? Thanks!
| distortedsignal wrote:
| I think a good way is to check out CoinMarketCap's Market
| Cap tracker. Let me elaborate.
|
| _I think_ Market Cap = (value per asset) * (total # of
| assets in the market). So the Market Cap of USDT SHOULD BE
| roughly equal to the number of Tethers on the market
| (assuming the price of a single Tether is stable, which isn
| 't a bad assumption _right now_ ).
|
| Since "every Tether is backed 1:1 by USD" and Tether is
| (more-or-less) pegged 1:1 to USD, if you see the market cap
| drop by a significant margin, it's likely that the drop was
| an outflow to currency. If we check the Luna crash event
| (~early May - ~early June 2022), we can see that USDT lost
| ~18B in market cap over that period. So (I think) we can
| assume that there was (roughly) 18B of dollar outflow over
| that period.
|
| If any of my statements here are incorrect, please correct
| me. I'm a software engineer, not a finance artist or an
| MBA, and the last business class I took was summer school
| in High School in like 2006.
| JumpCrisscross wrote:
| > _we can assume that there was (roughly) 18B of dollar
| outflow over that period_
|
| Couldn't Tether burn tokens it holds on its own or
| affiliates' books to create that impression?
| distortedsignal wrote:
| This is a good point - the issuer of Tether (iFinex?)
| could burn USDT that they hold without paying out to
| currency. I'm not sure how holding Tether would benefit
| the issuer of Tether, though, since anytime anyone
| transferred USDT to the issuer they would expect a cash
| payout. So I guess my statement "USDT is backed 1:1"
| should _actually be_ "circulating USDT is supposedly
| backed 1:1 by USD." Any "burnable Tether" should be
| subtracted from the Market Cap to find the actual "backed
| Tether."
|
| I don't know of any way to find how much USDT is held by
| the issuer of Tether (or their coparties) and how much is
| held by other wallets at any given time. I suspect that
| calculation would require a significantly greater
| knowledge of the blockchains that USDT is on than what I
| have.
| wmf wrote:
| You can see the "Authorized but not issued" numbers at
| https://tether.to/en/transparency/ and a detailed outside
| analysis of redemptions
| http://jpkoning.blogspot.com/2022/06/watching-tether.html
| fckgw wrote:
| USDT experienced it's longest de-pegging event ever during
| the Luna collapse. It didn't drop as low as previous events
| but it went on a long time.
| josu wrote:
| >USDT experienced it's longest de-pegging event ever during
| the Luna collapse.
|
| This is not true: https://trading.bitfinex.com/t/UST:USD
| fckgw wrote:
| A $1 stable coin being worth 99 cents is a depeg, and it
| was at that price for nearly a month after Luna/Terra
| collapse.
| jimmydorry wrote:
| But it was not the longest period of de-pegging, which
| was your original claim.
| roflyear wrote:
| What was? I can't really get that by just looking at some
| charts on an exchange...
| josu wrote:
| It depegged for much longer periods in 2019.
|
| EDIT: Screenshot https://www.tradingview.com/x/I92ccibV/
| ARandumGuy wrote:
| Tether (and the various exchanges that use it) has enough
| liquidity to process withdrawals, and likely has enough slack
| in the system to process periods of higher then normal
| withdrawal amounts.
|
| As long as Tether has some liquidity, things will keep
| operating as normal. However, if the amount of money
| withdrawn is greater then the amount deposited, eventually
| Tether's reserves will dry up. Once that happens, anyone with
| outstanding USDT will be stuck with a worthless asset. Only
| Tether knows how close we are to that point, and they aren't
| saying.
| gonzo41 wrote:
| The fun begins!
| Geee wrote:
| Stop spouting lies and non-sense. There is no evidence
| whatsoever that Tether is a "scam" or that it has been
| "pumping" BTC. You might as well claim that 911 was an inside
| job and we didn't go to the moon. Same type of people spout
| these "truths". Claiming something to be true in the complete
| absence of evidence, or contrary to existing evidence, makes
| you a nutjob.
|
| Tether is an integral part of the whole cryptocurrency
| ecosystem, and it's insane to claim that the global industry
| operates closely with a "scam that soon unravels" without the
| industry players being worried at all. Large exchanges are not
| some shadowy operations which can just close their eyes when
| they are exposed to risk.
| AlexandrB wrote:
| You'd think that after 2008 it would be obvious that even
| experienced financial institutions can be fooled into
| ignoring red flags when money is on the line. Greed is a hell
| of a drug.
|
| This same comment could have been posted about LUNA and large
| crypto investors like 3AC 6 months ago.
|
| > LUNA/UDT is an innovative part of the whole cryptocurrency
| ecosystem, and it's insane to claim that the global industry
| operates closely with a "scam that soon unravels" without the
| industry players being worried at all. Large investors are
| not some shadowy operations which can just close their eyes
| when they are exposed to risk.
|
| The red flags around Tether are many, but the biggest is that
| it would be _easy_ for them to prove that USDT is backed 1:1
| with USD _if_ it actually was. The fact that they 've
| consistently avoided offering such proof is all the evidence
| I need. It's the same reason no one believes Craig Wright is
| Satoshi.
| Geee wrote:
| They have provided transparency reports with third-party
| audits: https://tether.to/en/transparency/#reports
|
| There is no evidence that they have been fabricating those
| numbers.
| r00fus wrote:
| It makes sense if you consider all of crypto as a scam
| (greater tulip theory).
| jazzyjackson wrote:
| > Large exchanges are not some shadowy operations which can
| just close their eyes when they are exposed to risk.
|
| is this sarcasm? because the 2008 mortgage crisis showed that
| yes, large non-shadowy institutions can absolutely keep their
| eyes closed.
| tromp wrote:
| There's no way it's fully backed. I doubt that if Tether
| liquidated all their assets, they could cover even 90% of
| outstanding Tether. But they can spin all kinds of BS about how
| those assets are really worth more on paper...
| mistrial9 wrote:
| the whole of the US stock exchanges and many of the
| supporting assets, are already like that.
| quickthrowman wrote:
| Stocks aren't pegged to the dollar, you're comparing apples
| and wrenches. Tether is much more like a money market fund
| than an equity or bond.
|
| If your point is that there isn't infinite liquidity at the
| current market price for an equity or bond, you're correct,
| but it's irrelevant since tether is nothing like an equity
| or bond.
| potatolicious wrote:
| +1 on all of the above, and to add: there isn't infinite
| liquidity on securities, and that's ok. And that's
| exactly the problem: Tether is pretending _not be be an
| security, even though it transparently is_.
|
| Heck, to generalize on this, this is kind of the ur-
| problem with crypto generally: a bunch of things
| pretending to be currencies but are actually securities.
| The whole subterfuge is intentional, to foist risky
| assets on people by lying about their nature, and to
| avoid the (hard fought and hard justified) regulations
| around said risky assets.
| YawningAngel wrote:
| Can you explain why USDT is a security but the US Dollar
| is not? It seems like the only real difference is that
| one has a wealthier and more powerful issuer than the
| other (which, obviously, is enormously significant still)
| nightski wrote:
| USDT's value is pegged to $1. USD is not pegged to
| anything else really.
| kmeisthax wrote:
| It is almost a rule of banking that pegs are made to be
| broken.
|
| If you say that one of something is worth one of the
| other, you are promising that you have a bottomless
| supply of the currency on both sides of the peg. This
| almost never actually happens and whoever is running the
| peg will inevitably be caught with their pants down.
| Bankers specifically love breaking pegs and have the
| means to do so.
|
| If USDT was run by the Federal Reserve nobody would
| question the system; because then they'd have the
| capability to issue both the USDT token and the dollars
| backing it. They would be considered as fungible as
| dollars in the bank versus dollars in your hand.
| selectodude wrote:
| the US Dollar is a currency. USDT is a security backed by
| things that aren't US Dollars.
| JumpCrisscross wrote:
| > _US Dollar is a currency. USDT is a security backed by
| things that aren 't US Dollars_
|
| Meh, plenty of currencies--from the Emirati dirham to the
| Hong Kong dollar--are pegged [1]. International investors
| would just shit bricks if any of them dared the lack of
| transparency Tether pulls on crypto users.
|
| [1]
| https://www.investopedia.com/articles/forex/061015/top-
| excha...
| selectodude wrote:
| They're not pegged to assets though and as such can't
| lose value. Currencies can only go down vis-a-vis each
| other. When you buy an HKD you're not buying a slice of a
| USD, you're buying an HKD.
| JumpCrisscross wrote:
| > _When you buy an HKD you're not buying a slice of a
| USD, you're buying an HKD_
|
| You're also buying a commitment from the Hong Kong
| Monetary Authority (HKMA) to convert between Hong Kong
| and U.S. dollars at fixed exchange rates [1]. That
| promise is backed by the HKMA's reserves [2]. Tether
| closely resembles a pegged currency, albeit a banana
| republic's.
|
| [1] https://www.hkma.gov.hk/eng/key-
| functions/money/linked-excha...
|
| [2] https://www.hkma.gov.hk/eng/news-and-media/press-
| releases/20...
| selectodude wrote:
| Hong Kong's central bank prints their own currency. They
| defend the value of it by engaging in open market
| operations. If they fail, you can still pay your taxes in
| Hong Kong with it.
|
| Tether does not print their own currency. If USDT goes to
| zero, you have nothing. It's good nowhere.
| JumpCrisscross wrote:
| > _Tether does not print their own currency. If USDT goes
| to zero, you have nothing. It 's good nowhere._
|
| Tether prints Tethers. The HKMA prints Hong Kong dollars.
| They both derive their value from the U.S. dollar. If the
| HKD goes to zero, one has as much as if Tether goes to
| zero. (This is tautology.)
|
| The Hong Kong dollar is backed by the Hong Kong
| government. Tether is backed by no government. Tether is
| probably lying about its reserves. Hong Kong could just
| as well convert everyone's HKD to renminbi overnight.
|
| Point is, there isn't something fundamentally currency-
| like about one versus the other other than state backing.
| mjhay wrote:
| > Point is, there isn't something fundamentally currency-
| like about one versus the other other than state backing.
| I'd say that's as fundamental as you can get. One is
| backed up by guns, the other is backed up by literally
| nothing.
| danaris wrote:
| Isn't that effectively like saying "there's no
| fundamental difference between my three friends who like
| to talk about how democracy works and the Hong Kong
| government"?
|
| The fundamental difference between Tether and HKD (or any
| other currency) is that Tether _is not a legally
| recognized currency_.
|
| That may mean nothing to you, or to various other people
| who think that laws mean less than code, but it means a
| hell of a lot to most of the world.
| YawningAngel wrote:
| That's just a restatement of the premise. It doesn't
| explain _why_ dollars are a currency and tethers aren 't
| lazide wrote:
| For one, currencies are issued and backed by sovereign
| nations generally, and recognized as legal tender
| _somewhere_. USDT is not on either count, as far as I am
| aware.
|
| It might technically count as a 'crypto ecosystem
| currency' since it is often used to exchange value
| between different chains/coins/exchanges. But it is very
| difficult to convert to a recognized currency, so a lot
| of folks also get unknowingly stuck with it thinking they
| have dollars. There is a reason USDT is the ticker they
| pushed for, not TETH or whatever.
| mrsteveman1 wrote:
| > But it is very difficult to convert to a recognized
| currency, so a lot of folks also get unknowingly stuck
| with it thinking they have dollars.
|
| When Voyager entered bankruptcy, quite a few people
| suddenly discovered that the USDC they held on the
| platform was not the same as USD, did not enjoy the same
| legal protections USD would have, and that much of it had
| been loaned out to 3 arrows capital and was not coming
| back.
|
| The distinction became even more significant when the
| bankruptcy judge agreed that the bank accounts that were
| holding actual USD customer deposits were not part of the
| bankruptcy estate and had to be released back to those
| customers.
| mistrial9 wrote:
| yes, the distinctions you make are relevant; my point is
| exactly that there is NOWHERE NEAR the liquidity in
| ordinary markets.. I was too quick to object and with
| insufficient distinction, I stand corrected
| hahaxdxd123 wrote:
| Ok but US money markets are not backed by Evergrande debt
| sizzle wrote:
| Isn't tether USDT built on ethereum? How does it affect btc
| exactly? Can you buy BTC with USDT or am I missing something
| about the connection between the two?
| papercrane wrote:
| It's generally assumed that if USDT collapsed it would drag
| down the entire crypto market.
| tinus_hn wrote:
| > It's not backed.
|
| Then again, neither is a typical bank account.
| righttoolforjob wrote:
| The typical bank account is backed by a properly regulated
| financial institution, whereas USDT is backed by some shady
| foreign company.
| smt88 wrote:
| Absolutely wrong. Typical bank accounts in the US are FDIC-
| insured.
| anonymoushn wrote:
| Up to any amount of deposits?
| warkdarrior wrote:
| Each account is insured up to $250k, and you can open as
| many accounts as you wish.
|
| Source: https://www.fdic.gov/resources/deposit-
| insurance/faq/index.h...
| Scoundreller wrote:
| Nononono!!!!
|
| > Deposits are insured up to at least $250,000 per
| depositor, per FDIC-insured bank, per ownership category
|
| If you want have more than $250k insured in regular
| accounts, spread it across multiple banks (or put some in
| a joint acct, but that has its own risks).
|
| Opening a chequing account and a savings account at the
| same bank doesn't give you $500k of coverage if you were
| to put 250k in each.
| spookthesunset wrote:
| > Once the Tether scam unravels
|
| We've all been saying this for literally years now and yet here
| we are. The crypto market doesn't make any sense at all.
|
| It has to crash sometime, right? I mean it is obvious to
| anybody paying any attention that tether is a scam. How has it
| gone on this long? What will finally do it in?
| ravingraven wrote:
| I was short on Tether for years. Had to give up my position
| because "Markets can stay irrational longer than you can stay
| solvent."
| swalsh wrote:
| I gave up my Chinese Market shorts for the same reason
| alangibson wrote:
| Indeed. Especially when the west in question is
| systemically important. How were you shorting?
| Scoundreller wrote:
| What's it usually cost to short a tether for a year?
|
| At least it's a non-productive asset so that'll keep the
| cost down a bit, no?
| lern_too_spel wrote:
| A ponzi can keep going indefinitely if all the investors HODL
| without cashing out and no regulators check the books to
| trigger a run. As soon as enough people try to cash out their
| paper returns, the scheme unravels very quickly.
| andirk wrote:
| I agree, but we can't all cash out all of our money from US
| banks either. That much money simply does not exist. These
| comments have a lot more faith in FDIC than me, so maybe
| I'm missing something.
| cool_dude85 wrote:
| Maybe you have missed the US government's reputation of
| paying its debts and the FDIC's near 100 year history of
| paying out? It's hard to miss but I'm sure for some
| people it's possible.
| rossdavidh wrote:
| Things which cannot go on forever, will stop.
|
| Unfortunately, it is very difficult to know when.
| bb88 wrote:
| 1. The people using it don't care if it is, as they may be
| trying to grift each other anyway, or be using it for short
| term holding, transferring between crypto accounts.
|
| 2. We would only see this on a massive sell off when Tether
| can't prop up the price fast enough with their reserves (by
| buying USDT with USD). This almost happened on May 11 of
| 2022.
|
| 3. The Madoff scam went years and years before finally being
| outed in 2008. Decades perhaps?
| rhodorhoades wrote:
| Tether is hard coded to bounce between their float. Tether
| made a mega fuck ton of money when that float widened and
| so did all the hft firms. Most of the tether is held by
| insiders and they can utilize that tether to obtain 100x
| leverage. You can literally see on chain when the yield
| widened back in may 11th, that sythetix and other leverage
| platforms got a huuuge influx of USDT and they used that
| USDT to purchase more USDT on the low... and guess what?
| Made a killing.
|
| They are too powerful with too much money and too much
| centralized collusion to fail on their own. And the US
| policy still can't define crypto, let alone police it
| properly. Only the full might of the US judicial system
| will make tether fail.
| [deleted]
| Animats wrote:
| Madoff kept it going for 17 years.
|
| If you pay low or no interest, a Ponzi can be kept going for
| a long time. Eventually, though, the end of growth plus
| ongoing withdrawals catch up.
| [deleted]
| jbirer wrote:
| What's wrong? They are doing fractional reserve banking.
| PragmaticPulp wrote:
| Fractional reserve banking means that banks must _reserve_ a
| _fraction_ of the deposits. They lend out the rest. The
| deposit is still on record and the obligation to repay it
| still exists.
|
| If a bank never takes deposits, they have nothing to lend
| out. If Tether was printing Tethers without having deposits
| in place, they're not doing fractional reserve banking.
| scotty79 wrote:
| Do you think they have no money kept? Because if they kept
| fractions then it's fractional.
| Wata26363 wrote:
| No, a tether is not accompanied with an iou to the
| "bank". In fact it's the other way around. If they're not
| fully covered its simply theft.
| banannaise wrote:
| Fractional reserve banking still means having assets that
| cover your liabilities; those assets simply may not be
| liquid (i.e. they are loans that will be paid back over a
| period of years).
|
| If you don't have assets on your books, and have instead
| either walked with or lost a large portion of the money,
| then you're not doing fractional reserve banking, you're
| running a confidence scheme.
|
| If Tether, as suspected, was largely "backed" by crypto
| assets and Bitfinex shares, then they're gambling with
| the bank funds... and the recent losses in the crypto
| markets mean that they have been losing those bets.
|
| (I edited the last portion of this substantially to make
| it more concise.)
| cuteboy19 wrote:
| Two cases
|
| 1. You deposit $100 in the bank. It keeps $30 as cash and
| lends out the rest to someone. The money is still there
| on the balance sheet (but with a risk that it might not
| be returned)
|
| 2. You deposit $100 with Mr. Paulo in return getting
| 100USDT. Mr. Paolo spends $70 on private jets and
| ho*kers. If you ever want back more than $30, you're out
| of luck.
| RHSeeger wrote:
| Admittedly, unless the reserve amount required is 0
|
| From https://www.federalreserve.gov/monetarypolicy/reserver
| eq.htm
|
| > As announced on March 15, 2020, the Board reduced reserve
| requirement ratios to zero percent effective March 26,
| 2020. This action eliminated reserve requirements for all
| depository institutions.
|
| --- Feel free to correct me on this; my financial knowledge
| is only just a bit higher than that 0% rate noted above.
| kasey_junk wrote:
| The reserve requirement was removed because banks were
| holding too many reserves for the feds liking.
|
| Every US bank still has asset & liability requirements
| including having at least as many assets as liabilities
| and stringent rules on what the assets are. Further they
| have reporting requirements as well.
| iLoveOncall wrote:
| > There's a chance that Tether has been pumping BTC.
|
| A chance? It's an absolute certainty.
|
| Not only most exchanges have only a USDT:BTC pair and not a
| USD:BTC pair, but if you look at recent (~1.5 years) sudden
| spikes in BTC price, they correspond almost always to a new
| supply of USDT being released by Tether.
|
| The only upward momentum Bitcoin has had since the last ATH has
| been due to Tether printing money, so it's safe to say that not
| only it's pumping it, but it's probably contributing 80%+ of
| its value.
|
| If Tether dies, it's the end of cryptocurrency, period.
| kranke155 wrote:
| It's end of cryptocurrency as a wild speculative asset.
| Ethereum and decentralised apps will still exist, which is
| all that matters.
|
| Bitcoin is a failed open source project turned Ponzi. I can't
| wait for tether to take it to the absolute bottom and end the
| current epoch of crypto-as-speculation. Crypto will have its
| uses as a decentralised application platform.
| tehjoker wrote:
| You say that, but the only plausible non-substitutable use
| of bitcoin I've seen is sending money overseas or buying
| drugs. If its monetary value collapses, I don't see these
| other uses at all replacing it. It could just die, though
| more likely some marginal stuff will continue indefinitely
| trying to recapture lost glory.
| kranke155 wrote:
| NFTs have actually solved a real problem in the art
| world. I've said it many times before here so you can
| browse through my comment history to see why.
|
| Spoilers: - saying "but there is fraud" is not an
| argument against NFTs, because actually an automated
| solution for NFT fraud is conceivable. And the fact that
| there is fraud does not take away from the thousands of
| artists using it legitimately. Plus, authenticating you
| are buying from a real artist in the NFT space is
| actually not that hard.
|
| I actually think there is a huge potential to
| decentralized applications, but this is essentially faith
| for now so I won't add much more to the discussion.
| ohgodplsno wrote:
| > Ethereum and decentralised apps will still exist, which
| is all that matters.
|
| Will they, when ETH collapses to being worth less than 10
| bucks because you can't exchange it for funny drug money
| and it's only usable as funny slow distributed computer
| coins ? When users can't speculate on it, when stakers lose
| money on running a node because they're getting 5 bucks
| worth of rewards every other month ?
|
| Thankfully for the Ethereum Foundation, they conveniently
| prevented people from taking out their stake then did the
| merge, so that now that someone is in Ethereum, they cannot
| back out of it. Some might say it was something that only a
| malicious actor would do, but then again, the crypto
| community has never really been that bright when it comes
| to detecting scams.
| kranke155 wrote:
| This is essentially FUD, since it's obvious that
| withdrawals are the next thing in the list for the
| Foundation. No one forced anyone to stake either. Users
| did that knowing there was uncertainty on when it would
| be activated.
| jazzyjackson wrote:
| is there a decentralized app you like that isn't a defi
| exchange or play2earn "game" ?
|
| just curious because I haven't seen a practical use for the
| EVM, it just seems like the slowest, most expensive VM ever
| conceived.
| edgyquant wrote:
| I'm really tired of people assuming decentralized = eth
| derivative. The practical use cases of federated and
| decentralized apps have been shown (no one source of
| truth, tampering or failure) but practical apps aren't
| going to use a cryptocurrency why the hell would they.
|
| At scale we've been building completely decentralized
| applications for a decade and a half. They're just
| internal to some organization not public. Taking this and
| placing the database in the users hands is an interesting
| way to go but not exactly an order of magnitude more
| complex at that point.
|
| But this doesn't require some dumbass blockchain currency
| and ethereum is super forced.
| michaelchisari wrote:
| | _They're just internal to some organization not
| public._
|
| That's because technological decentralization is much
| easier with political centralization.
|
| But technological _and_ political decentralization
| together is incredibly difficult.
|
| In my experience, federated systems are more practical
| than decentralized systems and provide 98% of the
| benefits.
|
| I agree that cryptocurrency is not necessary (or ideal)
| for either.
| kranke155 wrote:
| Yes. NFTs have actually solved a real problem in the art
| world. I've said it many times before here so you can
| browse through my comment history to see why.
|
| Spoilers: - saying "but there is fraud" is not an
| argument agaisnt NFTs, because actually an automated
| solution for NFT fraud is conceivable. And the fact that
| there is fraud does not take away from the thousands of
| artists using it legitimately. Plus, authenticating you
| are buying from a real artist in the NFT space is
| actually not that hard.
| iLoveOncall wrote:
| > NFTs have actually solved a real problem in the art
| world. I've said it many times before.
|
| Saying something wrong many times doesn't make it right.
| kranke155 wrote:
| You can ignore the empirical evidence. NFTs work.
| vkou wrote:
| Work to do what? Prove ownership? They don't. Attribute
| IP rights? They don't. Persist the art in an immutable
| state? They don't. Bundle any other perks with the art?
| They don't. Provide a channel for artists to 'sell' their
| art? Okay, I guess they do, but so do a million other
| services, ranging from websites to the coffee shop two
| blocks down from my apartment.
|
| They are signed URLs that you can trade around on an
| exchange. This solves no problem that anyone making art
| has ever had.
| swalsh wrote:
| In my crypto investing thesis, I simply can't explain what
| role Bitcoin and its outdated technology can play. But I
| know not to bet against it. It's still the music to the
| merry-go-round.
| beaned wrote:
| Isn't correlation also what you would expect in an honest
| scenario as well? If there's demand for acquiring tether to
| trade Bitcoin, and it has to be printed, so it is, and then
| it's used for Bitcoin trading, I don't understand where the
| fishy-ness is. At least not from that one timing perspective.
| righttoolforjob wrote:
| People buy Bitcoin with regular money, not with USDT.
| People exchange from cryptocurrency to USDT because they
| really want USD, but that is significantly harder to
| convert to.
| 111111101101 wrote:
| > If Tether dies, it's the end of cryptocurrency, period.
|
| That's what I thought about MtGox. How wrong I was.
| epolanski wrote:
| MtGox involved few thousands people. There's more than 100M
| people at least who speculated on crypto.
| spookthesunset wrote:
| > That's what I thought about MtGox. How wrong I was.
|
| It's mind boggling how long this has gone on, really. I've
| been following the crypto scam for like 10 years now and it
| just keeps going.
| lui8906 wrote:
| It's almost like it's not all a scam isn't it?
| AlexandrB wrote:
| And Scientology is not a cult. Something being around for
| decades is no indication of whether it's legitimate or
| not.
| 111111101101 wrote:
| Or maybe it's just the most brilliant scam to ever be
| conceived? A ponzy scheme with a built-in rinse and
| repeat function that also put the final nail in the
| coffin of the war on drugs. Scam or not, it was a
| revolutionary idea which was executed perfectly.
| pwinnski wrote:
| It's not even that! It's just that most people seem to
| have no idea how long most scams are able to run. Bernie
| Madoff was operating for 17 years before things fell
| apart, and he was just one man. The layers of scam
| involved in crypto will take many, many, many more years
| to unravel.
|
| It doesn't take cleverness, just complexity.
| iamacyborg wrote:
| The technology may not be but certainly it's hard to
| argue that a large number of participants in the space
| are not committing scams.
| solveit wrote:
| I agree that Tether has certainly been pumping BTC with money
| they don't have, but
|
| > if you look at recent (~1.5 years) sudden spikes in BTC
| price, they correspond almost always to a new supply of USDT
| being released by Tether.
|
| is what you would expect to see even if Tether was 100%
| legit. As you say, most BTC liquidity is in USDT, so people
| buying Bitcoin would first buy (mint) USDT from Tether, and
| then use that to buy BTC.
| lui8906 wrote:
| Seems kinda obvious. New Tether is issued because people
| typically want to onboard into crypto assets.
| jandrese wrote:
| Criminals still need to launder money. Suburbanites still
| need to buy drugs. Cryptocurrencies won't completely
| disappear.
| 0x457 wrote:
| > Suburbanites still need to buy drugs
|
| Lol, you think these transactions done with crypto? Don't
| be silly.
| jandrese wrote:
| You are saying the Silk Road and the numerous clones
| aren't real?
| tomjakubowski wrote:
| Silk Road was a drop in the ocean, in total a hundredth
| of a percent of just the United States' spend on the most
| popular illicit drugs.
|
| _Silk Road ... facilitating annual sales estimated at
| almost_ $15 million.
|
| https://reason.com/2013/04/09/bitcoin-vs-big-government/
|
| _Researchers estimate that from 2006 to 2016, the total
| amount of money spent by Americans on these four drugs
| fluctuated between_ $120 billion and $145 billion _each
| year._
|
| https://www.rand.org/news/press/2019/08/20.html
| missedthecue wrote:
| They comprise a negligible amount of the drug trade.
| People are more likely to use Venmo than mess around with
| crypto wallets
| somewhereoutth wrote:
| When the casino admits it doesn't have the cash to back the
| chips out on the floor - pandemonium ensues.
| Scoundreller wrote:
| I wonder what percentage they consider "lost" every year and
| book as revenue?
| SMVS wrote:
| Tether asked for proof reserve is backed with dollars, not just
| ketamine.
| eutropia wrote:
| (IANAL) Tether was trying to claim that requesting essentially a
| complete financial report for Tether and Bitfinex was overbroad,
| but has so far refused to produce any example of a more specific
| and limited set of information, so the court said "open your
| books": ...In the absence of agreement between
| the parties (id., Ex. 1 at 5 ("Plaintiffs remain open to
| considering an alternate proposal ... but cannot do without
| some indications of what the B/T Defendants intend to
| produce[.]")), the Court finds that Plaintiffs' financial records
| RFPs are not overly broad, particularly given that
| Defendants have had opportunities to make sample
| productions of the financial records RFPs, but have failed
| to do so despite Plaintiffs' agreement to such proposal
| (id., Ex. 1 at 5). Plaintiffs plainly explain why they need this
| information: to assess the backing of USDT with US dollars, and
| to allow a forensic accountant to assess the USDT
| reserve... The documents sought in the transactions
| RFPs appear to go to one of Plaintiffs' core allegations:
| that the B/T Defendants engaged in cyptocommodities
| transactions using unbacked USDT, and that those
| transactions "were strategically timed to inflate the market."...
| Accordingly, the Court ORDERS the B/T Defendants to produce
| documents in line with the revised RFPs 22-25, 29, 31, and
| 72
| jsmith45 wrote:
| I found this format of a court order to be rather unique. I've
| never before seen a court order that reproduces a document from
| the docket (#245), and appends the actual order (with no header
| or anything) to the end.
| davidgerard wrote:
| I've seen some that are a letter from one side, and the judge
| has scribbled a note at the top accepting it and signed that.
| iudqnolq wrote:
| It's normal[1] to give a judge a proposed order they just
| have to sign.
|
| Judges don't have to care about formatting and headers. Each
| judge generally gets to write their own rules for how they
| want lawyers to format filings in their cases.
|
| [1] Or at least I often see them when browsing through cases
| as an interested layperson and I've heard lawyers discussing
| doing it in a tone that suggests it's the norm.
| can16358p wrote:
| Why is the letters and words garbled to an unreadable level
| especially on the first page?
| shrubble wrote:
| The good thing about Tether is that you can look at Tether, then
| look at the Federal Reserve's behavior.
|
| Tether throws into sharp relief the excess of the Fed.
| jazzyjackson wrote:
| the fed never promised they were backed by cash
| jc_811 wrote:
| The Federal Reserve is a US government created organization,
| with specific public mandates, and has the full backing of the
| entire US and global financial & monetary systems.
|
| Tether is a private company, controlling $67B in assets, with
| less than 10 FT employees, a CEO who hasn't been seen in public
| for years, with no transparency into their backing, has been
| caught lying multiple times in court, and has been involved in
| multiple civil and criminal investigations.
|
| There's no comparison.
| [deleted]
| dang wrote:
| Url changed from https://finance.yahoo.com/news/stablecoin-
| issuer-tether-orde..., which points to this.
| [deleted]
| dang wrote:
| We changed the URL from
| https://finance.yahoo.com/news/stablecoin-issuer-tether-orde...
| to the ruling it points to, since the latter is readable enough
| and the former doesn't really add anything.
| iudqnolq wrote:
| Here's the docket that links to this order and the other
| filings in the case if anyone wants context.
|
| https://www.courtlistener.com/docket/16298999/in-re-tether-a...
|
| (I'm posting this because it's slightly unintuitive to go from
| the PDF download back to the page it came from if you're not
| familiar with the site)
| can16358p wrote:
| While I find Tether super-shady, it's also one of the longest-
| going stablecoins which has stayed strong while many others
| failed catastrophically.
|
| Not to defend them or anything for sure, I find them and their
| Bitfinex/price manipulation schemes super shady too, but it's
| also a success that they came this far when many people expected
| them to collapse for years.
| anm89 wrote:
| I think this is the correct sentiment. I would be shocked if
| there's nothing shady going on at Tether, but given the 5 years
| of apocalyptic tether predictions while Tether plugs on through
| things like the Terra collapse with zero issues, it seems very
| likely to me that the sentiment is overly negative, not that
| the risk is understated.
| cowtools wrote:
| > Tether plugs on through things like the Terra collapse with
| zero issues
|
| Being more stable than Terra is not a very high bar.
| anm89 wrote:
| It's a binary event. It's either stable or it isn't stable.
| It isn't "more stable than Terra". It's stable (so far).
| WFHRenaissance wrote:
| As of 2021, their reserves consist of:
|
| Cash & Cash Equivalents & Other Short-Term Deposits & Commercial
| Paper (75.85%):
|
| - Commercial Paper (65.39%)
|
| - Fiduciary Deposits (24.20%)
|
| - Cash (3.87%)
|
| - Reverse Repo Notes (3.60%)
|
| - Treasury Bills (2.94%)
|
| Secured Loans (none to affiliated entities) (12.55%)
|
| Corporate Bonds, Funds & Precious Metals (9.96%)
|
| Other Investments (including digital tokens) (1.64%)
|
| Anyone saying Tether is not backed in any way is illiterate or a
| conspiracy theorist.
| advisedwang wrote:
| I would guess that the lawsuit alleges either:
|
| a) These percentages are true, but they don't actually add up
| to the amount of tether issued.
|
| b) This was true in 2021 but is no longer true
|
| c) This numbers were not an accurate representation.
| ohgodplsno wrote:
| I'll borrow 100 bucks from you, they'll be backed too:
|
| - $25 in my gas tank (50.0%)
|
| - $10 in a crumpled bill in my pocket (20%)
|
| - $15 of groceries that are in my fridge (40%)
|
| don't worry about how much it adds up to or if it's liquid,
| it's backed
| WFHRenaissance wrote:
| But the numbers do add up?
| pwinnski wrote:
| The _percentages_ add up. Are you certain that for every
| $100 in USDT they issue, they acquire another $2.94 in
| T-bills, $3.87 in cash, take out a secured loan for $12.55,
| and so on?
|
| They could indeed have all of those percentages, in exactly
| that relationship, all combined worth... a million dollars.
| That would be far, far, far, far short of what it should
| be.
| evdubs wrote:
| The attestation reports tell you the actual numbers (not
| percentages) of holdings grouped by asset type. [1]
|
| > The Group's consolidated total assets amount to at
| least US$ 66,409,619,424.
|
| > The Group's consolidated total liabilities amount to
| US$ 66,218,725,778, of which US$ 66,204,234,509 relates
| to digital tokens issued.
|
| > ... US Treasury Bills ... $28,856,434,491
|
| > ... other holdings by asset type
|
| [1] https://assets.ctfassets.net/vyse88cgwfbl/2xJyKdUKicd
| RUWpC9b...
| jwozn wrote:
| I love that these percentages add up to 110%, and even more
| so when comparing the dollar amount and associated
| percentages in relation to the original $100 and to each
| other.
| EdwardDiego wrote:
| ..what's the worth of that commercial paper? What's the
| _trustworthiness_ of it? Who is it from?
| evdubs wrote:
| From [1], the value of that commercial paper was
| $24,165,815,363. $23,615,946,340 of it was rated A-2 (Tier-2)
| or better (A-1/Tier-1 and A-1+/Tier-1+). This is equivalent
| to BBB or better (A to AAA) rated bonds. The report does not
| specify the CP issuer.
|
| Tether's consolidated reserves have since changed
| composition. [2] The most recent report shows (approximate
| percentages):
|
| - US Treasury Bills (43.45%)
|
| - Commercial Paper and Certificates of Deposit (12.65%)
|
| - Money Market Funds (10.25%)
|
| - Cash & Bank Deposits (8.15%)
|
| - Reverse Repos (4.5%)
|
| - Non US Treasury Bills (0.59%)
|
| - Bonds, Funds, Metals, Other, Loans (20.37%)
|
| So the commercial paper was so far trustworthy enough to
| allow them to rotate out of much of their CP position and
| into US Treasury bills.
|
| [1] https://assets.ctfassets.net/vyse88cgwfbl/4hiNJsZ98LlZqCJ
| HKz...
|
| [2] https://assets.ctfassets.net/vyse88cgwfbl/2xJyKdUKicdRUWp
| C9b...
| AlexandrB wrote:
| Since April of this year USDT has lost ~20% of its market cap.
| Presumably, this was tethers being redeemed for USD. Would be
| interesting to know which of the listed assets Tether sold off
| to fund these redemptions and whether they had to sell any of
| them at a loss.
| WFHRenaissance wrote:
| It was likely Tether being swapped for other stablecoins, or
| Tether swapped as a TETHER/USD pair on a centralized crypto
| market.
| lawn wrote:
| Allegedly.
|
| And I'm sure it's _partially_ backed by something, the issue
| how much is it really backed and by what.
| LawTalkingGuy wrote:
| There isn't a single dollar in a vault. They've been a scam since
| the beginning.
|
| They clearly did NOT have any assets when they were pretending to
| be audited or they would have completed the audit.
| anm89 wrote:
| This is just a cartoonishly naive take. This is like saying the
| Fed or JP Morgan is insolvent because they don't have the sum
| of their balance sheet located in some metal vault with dollar
| bills inside of it. It turns out having stacks of paper in a
| metal cage isn't how solvency is defined in 2022.
| LawTalkingGuy wrote:
| Their whole promise is having a dollar in a vault for every
| tether issued.
| anm89 wrote:
| Well, you are wrong. But ok.
| yieldcrv wrote:
| I think some of the most extreme criticism doesn't go that far.
|
| Bitcoin crowd doesn't like less than 100% backing. The argument
| isn't that they have nothing.
|
| When Tether had disrupted fiat redemptions and lost banking,
| people would find the banks they likely moved to by looking at
| massive increases in the bank's reported deposits.
| LawTalkingGuy wrote:
| Nobody likes 0% backing. Yes, the argument is that they have
| NOTHING, zero, $0. Never did.
| bell-cot wrote:
| With some financial engineering, an "absolutely 100% dollar-
| backed" asset can be backed by a "more than 99% for-sure" mix of
| assets, which are in turn backed by a "96% good in even the worse
| case" mish-mash, which are in turn backed by a "I'd bet my left
| arm that more than 91% are okay" heap of stuff, which are in turn
| backed by a "we have checked on 84% of 'em" pile of smelly
| things, which are in turn...
| Grimburger wrote:
| > we have checked on 84% of 'em" pile of smelly things, which
| are in turn...
|
| For the posterity of this thread American banks are no longer
| required to hold any reserve requirements at all[1].
|
| Though I guess that is a " _different_ " issue depending on who
| you ask here.
|
| Ask yourself this - can everyone in the country take their
| money out at the same time
|
| For these shitty stablecoins: nearly everyone
|
| For the actual money you use everyday: Maybe 2-3% of people can
| cash out of the system properly.
|
| A system built on trust works until it doesn't.
|
| [1]
| https://www.federalreserve.gov/monetarypolicy/reservereq.htm
| drc500free wrote:
| Which is why FDIC insurance is a thing.
| jcranmer wrote:
| > For the posterity of this thread American banks are no
| longer required to hold any reserve requirements at all[1].
|
| That is misleading. Banks are no longer required to hold a
| certain fraction of their deposits in their bank account at a
| Federal Reserve bank--that's the reserve requirement that was
| reduced to 0%. Keep in mind that only money in the bank
| account qualifies as reserves that requirement; a literal
| pile of dollar bills would contribute not one cent.
|
| Instead, banks are required to keep on hand sufficient equity
| for a percentage of their risk-weighted assets--money that,
| if the assets go to 0, can be raided to make up the losses.
| The requirement here starts at I believe 8%, and increases if
| you're a more important bank.
|
| (If I'm computing it correctly, Tether has disclosed a
| capital ratio of approximately 0%, FWIW. Were Tether actually
| held to the same standards as a bank, Tether would be
| considered dangerously undercapitalized if not outright
| insolvent.)
| rlucas wrote:
| This is misleading to those who read "plain English" meanings
| and not familiar with jargon. Banks call "Capital" or
| "Equity" the unencumbered safe assets like cash they hold.
|
| Banks do have strict Capital requirements.
|
| The "reserve" requirement going to zero is different.
| rchaud wrote:
| Depositor insurance is why people don't try to take out all
| their money at the same time.
|
| Stablecoins don't offer that. They have their own stabilizing
| mechanism where in a crisis, the peg collapses so quickly
| that it's not even worth trying to take any out after
| considering peak traffic tx fees.
| lazide wrote:
| Bwaha, you had me in the first half.
|
| Glorious.
| mywittyname wrote:
| What's so funny?
|
| The FDIC has a track record of payouts and they keep
| meticulous of every bank they insure, going back to the
| program inception in 1933.
| belter wrote:
| NFTs All The Way Down...
| ur-whale wrote:
| You've just described the _entire_ (USD-backed or otherwise)
| world financial system - unless that is - if you have hard
| assets buried in a hole somewhere in the ground in a place only
| known to you as well as enough firepower to prevent anyone from
| taking it by force when you try and access it.
| rhodorhoades wrote:
| I can't tell if this is a joke about financial engineering
| tether slowing lowering its backing publicly? Maybe a double
| entendre?
|
| Tether was originally 100% 'backed' and after more and more
| pressure, they literally did that exact same thing with the
| percent that was backed in USD.
|
| "It's 100%. Okay, it's absolutely backed by 99% usd. JK, 96! I
| think they are at like 74% now publicly backed by USD?
| zen_1 wrote:
| All AAA mortgages, I'm sure.
| GaveDrohl wrote:
| S&P & Moody's would not lie!/s
| andrepd wrote:
| Is AAA even meaningful? Shit ratings were a major part of the
| 2008 meltdown, but we've all collectively decided to ignore
| that and keep relying on the big three's Divinely Inspired
| Appraisal. Sounds odd.
| lazide wrote:
| It is only meaningful in a relative sense - AAA is less
| likely to be allowed to fail (or maybe actually fail?) than
| BBb or whatever. Usually.
| onlyrealcuzzo wrote:
| AAA NFT mortgages in the metaverse.
| londons_explore wrote:
| It's all zuckerberg's one meta-house remortgaged a million
| times...
| metacritic12 wrote:
| Much less the case after 2008.
|
| And definitely was never the case if that chain of assets had
| the same par value.
|
| E.g. a 100% dollar-backed worth $1000 can never be backed by
| $1000 of B-rated mortgages. It would have been e.g. $2000 of
| B-rated mortgages. Obviously, this still had a massive flaw as
| we saw.
|
| The point still stands though that USDT's profits are probably
| all based on it's float, so they want to go as risky as
| possible to generate more profits. They get all the upside of
| high-yield assets, and not the downside.
| zmgsabst wrote:
| To elaborate:
|
| The problem in 2008 is correlated risk -- basically, the
| difference between rolling once per mortgage (uncorrelated
| defaults) or just once that impacts all the mortgages
| (correlated defaults). Creating a "more secure" investment
| out of nominally more "less secure" for investments depends
| on the risk being uncorrelated, ie every risky investment is
| a separate roll.
|
| But as we saw in 2008, many people may default at once if the
| economy becomes unhealthy.
| JumpCrisscross wrote:
| > _problem in 2008 is correlated risk -- basically, the
| difference between rolling once per mortgage (uncorrelated
| defaults) or just once that impacts all the mortgages
| (correlated defaults)_
|
| It was ignoring solvency != liquidity. Most of the
| structured mortgage products paid out fine. You really can
| skim cream off crap through payment prioritisation. But
| that was not clear _ex ante_. If you're leveraged or in
| dire straits, that a security will pay as promised over the
| coming decade is little comfort when it's going at a dime
| on the dollar.
| roflyear wrote:
| The problem with the securities may have been correlated
| risk, but that didn't cause 2008. 2008 did not have a
| single problem, it had a lot of problems.
| ISL wrote:
| Crypto is growing up. The little tyke we got to know in 2014 is
| getting its first meaningful encounters with the consequence of
| young adulthood.
|
| Growing up is hard, but the outcome can be positive.
| cowtools wrote:
| How is tether considered a cryptocurrency here? It's centrally
| minted and controlled.
| davidgerard wrote:
| It's important to note that a lot of the demanded records _don 't
| exist_.
|
| e.g., we know from the CFTC settlement that for a while, Tether
| didn't keep anything so tawdry as "accounts" - the only
| documentation of the reserve was a single shared spreadsheet.
| purpleblue wrote:
| If you own Tether right now, and you don't liquidate immediately,
| you 100% deserve to lose all your money. This thing is going to
| collapse. There's no reason why Tether would keep its holdings
| secret unless it's hiding a secret. So be warned, if you don't
| want to suffer the same fate as Terra you need to liquidate right
| now.
| phphphphp wrote:
| Very few people hold Tether so it's not a very helpful warning:
| most "USDT" exists within exchanges and is used to transact.
|
| The Luna fiasco was a consequence of Luna specifically
| encouraging people to hold UST, encouraged with unsustainable
| incentives. That dynamic doesn't exist in the context of USDT,
| there's no benefit to holding USDT.
|
| The problem with USDT is that so much of the current
| cryptocurrency market has been propped up by USDT that probably
| isn't backed by any real assets.
|
| Tether print $1bn of USDT -> buy $1bn worth of BTC on an
| exchange that uses USDT (e.g: their own...) -> price goes up
| and increases the market cap by orders-of-magnitude more than
| $1bn.
|
| If you have exposure to the cryptocurrency market (whether you
| hold USDT, or BTC or own $COIN stock) and tether blows up, you
| will very probably be hurt in the fallout. Buying BTC with any
| USDT held is a false sense of security.
|
| If you don't want to be exposed to the tether blowup contagion,
| sell everything now into cash-in-your-bank-account (not "cash"
| on an exchange) and wait.
| renewiltord wrote:
| Want to buy a USDT put? I'll send someone to meet you in SF.
| $10k min, if you're okay with in-person. Premium discussed when
| you suggest expiry date.
|
| If you want the smart contract, I'll do a $25k min. Once you
| give me the money, I'll do this:
|
| 1. Load a smart wallet with 1.2x equivalent value of ETH (which
| I'm long)
|
| 2. Tie it to a smart contract using a price oracle that will
| liquidate the ETH if the ETH/USDC price (using some combination
| of high-volume exchanges) drops to 1.01x of the amount of USD
| you should get
|
| 3. At any point of time, you can transfer in your strike USDT
| to exercise the option and receive USDC in return
|
| This way I get to be long ETH and you get to be short USDT so
| long as you trust USDC (which is audited)
| purpleblue wrote:
| I would LOVE to buy a USDT put but I would only do it on a
| known exchange. Not some back-alley mechanism where I would
| likely get scammed. As far as I'm concerned, the entire
| crypto ecosystem is at risk, and all it will take is BTC
| below $15k to see a lot of fallout and collateral damage.
| jimmydorry wrote:
| If Tether blows up, all of the exchanges with USDT pairs will
| be holding bags of various sizes. Where do you expect one
| would be able to redeem the USDC without significant risk of
| the exchange folding before paying out your USDC redemption?
| If the past is anything to go by, in quick order, exchanges
| will limit withdrawls ("cash" balances included).
| renewiltord wrote:
| You could mean two things:
|
| 1. I won't be able to liquidate the ETH to USDC and
| transfer it to you => We can force me to liquidate using a
| DEX or Uniswap pool. Alternatively, if you're very worried
| about this, I'll just charge a higher premium and post USDC
| into the account. That's just a pricing problem
|
| 2. You won't be able to redeem the USDC I give you =>
| You'll have to trust Circle here, yeah. If you don't trust
| their audits, we can use another stable coin, but I think
| USDC is more trustworthy than BUSD and there aren't pairs
| for ETH to very many other stable coins that have enough
| volume to keep the spread down so I can safely liquidate
| Lionga wrote:
| Expiry in 12 months 100K smart contract. Premium?
| setgree wrote:
| For context, Bloomberg's "Anyone Seen Tether's Billions?" is a
| fun read, and was discussed here:
| https://news.ycombinator.com/item?id=28784745
| therealmarv wrote:
| I'm sure it's 100% backed by a lot of magic fairy dust and
| somehow I also imagine rainbows and unicorns in the asset list.
| DonHopkins wrote:
| Line up for free ice cream, kids!!!
|
| https://www.youtube.com/watch?v=YbYWhdLO43Q
| cm42 wrote:
| Correct me if I'm wrong, but didn't the JPM/NYAG report
| essentially say USDT isn't [sufficiently?] backed, but doing
| something about it might collapse the financial system because
| of, among other reasons, This One Weird Trick To Print Free
| Bitcoin in China That Satoshi Really Hates?
| rossdavidh wrote:
| You are not wrong.
| LatteLazy wrote:
| Crypto and Covid are 2 great examples of how the less information
| people have, the more sure they are.
|
| There are already 2 comments here that are 100% sure tether has
| zero dollars backing it. I am not saying it has a 100% backing,
| or any other value. I do not know. But that fact people are so
| sure they know and know exactly and at the very extreme of the
| possible range is very telling...
| Invictus0 wrote:
| What is even the point of this comment? You say you have no
| clue what the truth is, but still twirl your mustache on the
| oh-so-very-nuanced stance that it's more likely a 50% scam than
| a 100% scam.
| olalonde wrote:
| It's a common occurence on HN. My theory is that people make
| authoritative comments, even when they should know better,
| because those comments tend to attract more up votes. This is
| especially problematic on topics that can't be easily verified.
| cageface wrote:
| Occam's Razor. If it was backed then they would have produced
| the evidence long ago instead of dancing around the issue for
| years and doing phony "audits".
| LatteLazy wrote:
| That is fine, as long as it is your belief and you admit you
| might be wrong.
|
| The issue is when you say Occam Razor is a form of proof and
| you are "certain"...
| Ensorceled wrote:
| cer*tain (sur'tn) adj.
|
| 3. Established beyond doubt or question; indisputable: What
| is certain is that every effect must have a cause.
|
| 5. Having or showing confidence; assured:
|
| When someone says, "I am certain .." they are are clearly
| using definition 5. and especially in this context. Your
| insistence that they are using definition 3. is
| unreasonable, especially since you KNOW they came to this
| opinion via Occam's Razor.
| cageface wrote:
| Occam's razor is an heuristic for proceeding in the absence
| of certainty. Anyone claiming otherwise doesn't understand
| it.
|
| As for Tether I'm certain enough to advise anybody
| investing it or any currency supported by it to not invest
| money they can't afford to lose.
| LatteLazy wrote:
| So you are certain, but you have no hard facts to base
| that on, just a heuristic you yourself say should NOT be
| used to claim certainty?
|
| You see my point now?
| cageface wrote:
| You're just being pedantic now. We make decisions every
| day all on imperfect information. There are enough red
| flags around Tether that I wouldn't bet any real money on
| it or on the things its propping up.
|
| The burden of proof is on Tether. They're the one making
| the claim they're fully backed.
| LatteLazy wrote:
| I am fine with people making decisions on imperfect
| information. I am not saying Tether is fine. It almost
| certainly is not.
|
| I am just confused why everyone seems to BOTH say they do
| NOT know AND then advise people and act like it's obvious
| and clear!?
| Smaug123 wrote:
| The point is that absence of evidence is evidence of
| absence - in this case, rather strong evidence of
| absence. Without perfect information, of course nobody
| _knows_ - but most people do in fact know with sufficient
| certainty to not bet on Tether (and to advise people
| similarly not to). Merely "not being certain" of
| something does not, in fact, mean that it's unclear what
| to do.
| cuteboy19 wrote:
| If I tell you that I am a Nigerian Prince and that I
| definitely have a billion dollars somewhere and that you
| need to just send me a small sum of 10k to release that
| money, would you not tell people that it's an obvious
| scam?
|
| I mean you don't know for a fact that I am NOT a prince
| right? And if you ask me for any documents I'll just say
| they got lost or it's too difficult to produce them.
|
| In this case the absence of information is the proof that
| you need to say that tether is a scam.
| Smaug123 wrote:
| (Downvoted for apparently wilful failure of reading
| comprehension. "Certain enough to advise [caution]"
| obviously doesn't mean what you are using "certain" to
| mean.)
| LatteLazy wrote:
| So "certain enough to advise" means "not certain"!?
| Smaug123 wrote:
| ... yes? I can be full enough that I don't want to eat
| any more rice, but not so full that I can't squeeze in
| some pudding. The word "enough" is right there in front
| of you, indicating that the adjective it modifies has a
| quantity. If I am full, I don't want any more food; if I
| am full enough not to want X, that doesn't mean there is
| no food I will eat.
| lend000 wrote:
| That's different than saying they have zero dollars, like the
| sibling comment that the parent was probably alluding to. In
| fact, there have been ~$20 billion in withdrawals during the
| last few months as the market has turned bearish and the
| market is reacting to a likely collapse below market
| capitalization in Tether's non-dollar-backed assets [0]. Are
| they backed 100%? Probably not during bear markets because
| they seem to be doing discretionary trading with deposit
| money. But the options aren't limited to "they have $0" and
| being 100% backed.
|
| [0] https://coinmarketcap.com/currencies/tether/
| cageface wrote:
| Serious skeptics of Tether are not claiming they have $0.
| Just much less than they claim to have.
| tsimionescu wrote:
| Sure, but the content that started this thread is
| explicitly complaining about people who do claim that
| Tether has $0 backing it - of which there are a few in
| this thread.
|
| The OP was not complaining that people think Tether is
| not well enough backed, they were complaining that some
| are "certain" that it is not backed at all - the least
| informed being the most certain.
| darcys22 wrote:
| I dont get why people think the assurance reports they make
| are phoney.
|
| https://assets.ctfassets.net/vyse88cgwfbl/2xJyKdUKicdRUWpC9b.
| ..
|
| Its not like BDO are going to stick their neck out for tether
| here
| ceejayoz wrote:
| > There are already 2 comments here that are 100% sure tether
| has zero dollars backing it.
|
| Yes, that's a silly claim. Pretending that's anything near the
| _average_ criticism of Tether is also silly.
| milin wrote:
| Tether does not have USDT backing. Some people are going to end
| up in prison for life.
| DonHopkins wrote:
| Oops. [Tether web site turns into nginx install page.]
| freemint wrote:
| How can i short Tether?
| awestroke wrote:
| Sell your tether, sell your other crypto, move out into the
| forest, build a log cabin, hunt wild game
| evdubs wrote:
| Sell short USDTUSD on Kraken
| https://www.kraken.com/prices/tether?quote=usd
| ProjectArcturis wrote:
| Have several million to invest and ask an investment bank to
| write you a tether swap. It won't be cheap.
| djbusby wrote:
| Exit any position and then ignore it.
| almostkorean wrote:
| not a defi expert, but I think the most common way to do this
| is to use Aave: 1. borrow Tether 2. swap
| it for USDC (or stablecoin of choice) 3. wait for Tether
| to crash 4. pay off your Tether loan at a fraction of its
| original value
|
| risk is that your tether loan will be accruing interest
| (currently 1.4%) so if it doesn't crash or takes too long to
| crash you could be liquidated.
| mook wrote:
| There's also the risk that USDC (or alternate) will lower in
| value due to Tether crashing, even if they were merely also
| crypto. It may be necessary to convert to non-crypto assets
| instead.
|
| Of course, then there's the risk that non-crypto assets will
| be affected by the same...
| colinmhayes wrote:
| Be careful with this, tether is semi-regularly manipulated to
| briefly go way above $1 in order to squeeze shorts.
| freemint wrote:
| So many small positions. Got it.
| anm89 wrote:
| If you need to ask this question you should not be doing this.
| It's been plugging away without issues for years. What makes
| you think you can suddenly outtime the market on its collapse?
| freemint wrote:
| Attention by regulators.
| anm89 wrote:
| You haven't gained any competitive advantage in timing
| though unless you have some unique insight. You just read a
| press release that is available to every other market
| participant, some of whos full time job is to do things
| like analyze balance sheet risk.
|
| Anyway good luck, just beware that you aren't making some
| kind of smart money play.
| cuteboy19 wrote:
| The places you can do so have a vested interest in keeping
| tether afloat. Do not play in a rigged casino
| lawn wrote:
| I think you can do it on Kraken.
| Marazan wrote:
| Do not short Tether.
|
| Doing so is betting against The House.
|
| Not just any house, The House. The House in which all other
| houses are built.
|
| You _cannot_ win shorting Tether.
| cowtools wrote:
| Not my house. I use kraken so I think I will remain less
| affected than users of other, less credible, exchanges.
|
| Cryptocurrency has been working just fine before tether, and
| it's going to work just fine without it. We've seen ups and
| downs. So I don't think it's that crazy when the house has
| failed many times in the history of cryptocurrency.
| Marazan wrote:
| Tether is The House. It doesn't matter what exchange you
| trade on, the price of Bitcoin (and by extension all
| crypto) is settled in Tether.
| freemint wrote:
| Well Tether can only have two stable states $1 or $0. A
| Tether is never going to be worth $2 so at worst i am paying
| interest on the short.
| ceejayoz wrote:
| > Well Tether can only have two stable states $1 or $0.
|
| Instability is often what kills short sellers.
| Marazan wrote:
| If Tether goes to zero your counter-party risk goes to
| infinity.
|
| In the meantime it has all the hallmarks of a scam
| manipulated asset. Shorting it will get you liquidated at
| the whim of the manipulators.
| hmate9 wrote:
| On FTX you can short the USDT-PERP future. You pay about 4% a
| year in funding fees while the position is open.
| hiq wrote:
| How much time do they have to produce these documents? Can they
| legally avoid doing so for now, via an appeal of some sort?
| [deleted]
| Snarwin wrote:
| IANAL but it looks like the default is 30 days:
|
| https://www.law.cornell.edu/rules/frcp/rule_34
| mihaic wrote:
| How the hell do governments sleep for years on this sort of
| stuff?
| jjtheblunt wrote:
| my guess is they let novel ideas play out for a while, since
| most every innovation that endures starts as a crazy idea?
| mihaic wrote:
| That sounds about right, but when it gathers about a billion
| dollars in it I'm a bit shocked it's still "just a start-up".
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