Quote: (12-01-2017 04:03 AM)SamuelBRoberts Wrote:
Shorting knowing an entity has an infinite capacity to spike the price is suicide. Go spend your money on prostitutes and cocaine, you'll at least have some fun before it all disappears.
Just treat it as an additional risk factor to be aware of, and keep an eye on it.
Quote: (12-01-2017 12:47 PM)SamuelBRoberts Wrote:
The only signal you'll find is the arrest of tether/Bitfinex execs and an exchange shutdown.
I do not expect there to be a lot of warning.
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Negative Publicity & Tether
Bitfinex and Tether, a party related to Bitfinex, have been receiving negative press and social media commentary regarding an alleged lack of transparency and completed audits. This attack is persistent and coordinated, and is based on innuendo, lies, and misdirection. We are staying focused on our business, and getting the audits completed, but it is impossible to ignore the constant stream of defamatory and malicious claims. We are taking concrete steps to improve our communications, including more regularly sharing information and insights, but, for the time being, we want to offer our shareholders some comments that may be useful when encountering critics.
Specifically, much of the online discussion concerns the question “how can tether be created at night and on weekends? Tether has no banking — it must be fake!” While it is true that both Bitfinex and Tether have had banking issues in the last six months, we certainly have had access to banking, but for a limited audience. Since April, the vast majority of all Tether issuances have been occurring through Bitfinex.
Because Bitfinex and Tether have common principals and banking, there is no limit to the timing or amount of money that can flow between the two entities even if inbound and outbound customer wires are limited. Bitfinex holds the vast majority of its customer USD balances in the form of USD bank balances. Bitfinex typically only holds less than 20M Tethers for customer withdrawal. When that balance approaches zero, Bitfinex moves money (typically $20M) from the Bitfinex bank account to the Tether bank account at the same bank in order to purchase additional tether from Tether Limited. To be clear, when this happens, cash is credited (or removed) from Bitfinex’s balance sheet and debited (or added) to Tether’s. This can be done electronically, day or night, on weekends and on holidays.
The reason for the continuing creation of Tethers is simple: demand from verified Bitfinex customers. What are customers using it for? Tether recently added the following page to help answer that question. The principal use case for Tether is exchange arbitrage. Bitfinex simply acts as an aggregator of customer demands for bulk creation and acquisition of Tethers. Its balance sheet impact is completely neutral as to Bitfinex—as to Tether, every issuance of Tethers (a credit to its liabilities) is matched by a corresponding debit, or addition, to its assets, as described above—and has nothing to do with the USD lending market. Also, all of the Tether flows and balances are very transparent, which clearly corroborates the truth. Given Tether’s public and verifiable nature, fraud would be easy to detect if it were to occur.
Quote: (01-22-2018 11:03 AM)RedPillUK Wrote:
-snip-
Quote: (01-23-2018 01:08 PM)RedPillUK Wrote:
Actually whether he's a bitter nocoiner is relevant, because if he is that means that he wants cryptocurrencies to fail, so of course he would be spreading this.
I understand that is the argument, and I was asking whether there was any proof Tether don't have this money. They're recieving BTC or dollars for their Tether, so they should have at least 10% of the money they say they do, especially if they're cashing out that BTC they recieved a long time ago that will be more valuable now.
I'm just comparing the two, if theres a run on banks they'll probably run out of money, if there's a run on tether, they will also probably run out of money. Does the bank actually have all the money it says? If you compare the two and come to the conclusion that both have basically the same drawbacks, what difference does it make? You're fucked either way if something bad happens.
![[Image: 13ccb9c951361155f82af96184f2050f.png]](https://i.gyazo.com/13ccb9c951361155f82af96184f2050f.png)
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UPDATE (30th January 2:11 p.m. EST): Bloomberg has updated its report, stating that the subpoenas were sent on Dec. 6, not last week.
Cryptocurrency exchange Bitfinex and Tether, the company behind the controversial USDT token, have been subpoenaed by the U.S. Commodity Futures Trading Commission, according to a new report from Bloomberg.
Citing an unnamed source, Bloomberg said that the CFTC had sent queries to both companies. The news comes days after CoinDesk reported that Tether's relationship with auditing firm Friedman LLC had "dissolved," though it still remains unclear which party moved to curtail the work. Friedman had been working on an audit with Tether, which is closely linked to the British Virgin Islands-based Bitfinex.
"We routinely receive legal process from law enforcement agents and regulators conducting investigations. It is our policy not to comment on any such requests," the companies said in a statement to Bloomberg. A representative declined further comment when reached.
The news is likely to further inflame the controversy around Tether's USDT token, which functions as a kind of synthetic dollar. Critics have argued that the token isn't backed on a 1-to-1 ratio with the U.S. dollar as otherwise claimed and that the tokens generated by Tether in recent weeks have been used to boost the price of bitcoin, particularly during times of market weakness.
The report also sparked a rout in the price of bitcoin, sending it below $10,000 as word emerged about the CFTC subpoenas. At press time, the price of bitcoin is trading at $9,957.88.
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Again suprised this thread isn't getting more action. This Tether situation is getting a lot more attention and it doesn't look good.
New York Times is now mentioning the Tether situation which means that it's now an issue that will be dealt with shortly.
The single question that needs to be answered is "Is Tether backed 1 to 1 with USD or not?" If not, this will be a significant revelation as Tether is an extremely important tool in the entire crypto trading space.
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It is not yet clear what information the regulators are seeking. Technically, the Tether tokens are issued by a separate company (called Tether) that is owned and operated by the same people who run Bitfinex. The C.F.T.C. subpoenaed that company at the same time that it subpoenaed Bitfinex, according to a person familiar with the matter.
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Bitfinex had contracted with an American firm, Friedman, to audit its records and prove that its operation of Tether is above board. But last week, Bitfinex said it was cutting ties with Friedman, after waiting months for it to finish the audit. That news generated more suspicion.
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Tether offered a preliminary report last year from Friedman, the accounting firm, suggesting that it had bank accounts with dollars corresponding to all the Tether that had been issued. But the report was far from conclusive and Tether has never produced a real audit, leading to suspicions that Bitfinex may be printing virtual money backed by nothing.
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Bitfinex has not commented on the subpoena or recent reports about Tether, and company officials did not respond to repeated requests for comment. In the past, the exchange’s executives and spokesman have said that its customers are simply using Tether to buy virtual currencies as they might otherwise use United States dollars.
![[Image: facepalm.png]](https://rooshvforum.network/images/smilies/facepalm.png)