Bitcoin Forum

The New York Attorney General Office submitted a report in which it accused Bitfinex and Tether of illegally selling and trading USDT as securities in the state of New York.

The recent filling show in detail that Bitfinex and Tether allowed top investors such as Galaxy Digital CEO Mike Novogratz to trade and cash in USDT until “early 2019” and that both companies opened multiple accounts at New York banks.

Will this affect the current uptrend of Bitcoin as most people holds USDT? If YES in which direction, upward or downward?

Further reading of the report is available here (https://coindoo.com/tether-accused-of-illegally-issuing-usdt/?utn_medium=notification&utm_source=onesignal)

in the past, tether FUD has preceded large rallies. this is probably because the easiest exit from USDT is into crypto. when all the USDT markets are rising, the rest of the market eventually gets dragged upwards too.

i think this filing will establish jurisdiction for the state of new york to continue their investigations into fraud and securities violations. it will force the companies to produce lots more documents for investigators to parse through. this whole thing could end up dragging out for months or years. it looks really bad for bitfinex and tether though.

Tether and USDT have been undertaking shady or downright illegal activities for years now. They continue to refuse to allow independent audits, they lied about being backed up 1-to-1 with USD, they lied about the amount and type of assets they were holding, they lied about not investing their holdings in other cryptos.

It's been pretty obvious for a while now that Tether are printing USDT out of thin air and using it buy bitcoin. Another half a billion dollars of USDT printed in the last month, 1.5 billion dollars in the last three months. This article is just proof of what everyone has pretty much known for months - Tether is a scam.

No one who has been paying any attention over the last 12 months should be holding or using any USDT.

I posted a topic long ago about an academic study on the relation between Tether & Bitcoin. It concluded that there is no relation between both.
And if you think about it: this news is already old and it was out what happened to the BTC' price? Nothing. The market absorbed it like if nothing happened. And if it ends like a MtGox scandal, Bitcoin will have no problem in the long term.

The fact is that the market has been aware of the issues surrounding USDT for a while now, including how it could be operating under a fractional reserve all this time with limited liquidity, since their shift towards backing their reserves with non-cash components.

I still take the stance that the impact of Tether on the bitcoin market has been entirely overstated.

Whilst it is true that any negative Tether news will most likely impact bitcoin prices in the short run, market participants will quickly find an alternative stablecoin to use, if there is demand (even though I'm a strong advocate against stablecoins). There are several substitutes in the market already which means that it's very unlikely that there will be long run detriments, especially when you consider the fact that long run prices are still greatly determined by fundamentals of BTC itself.

Tether growth could be just a reflection of the market cap expansion to BTC and other crypto.  


 However if this take is true then its allowing leverage to influence BTC prices by greater liquidity then otherwise would be apparent in circulation.   That makes BTC vulnerable to any pullback in dollar liquidity I guess, not an independent system as people like to believe it can be and with separate performance to standard assets which are fairly uniformly reacting to the Federal Reserve policy.

if this news were to affect the market it would have done it already. and since we have not seen any change in the market i think we can safely say that nobody cares. it is understandable too, since this is not the first news about Bitfinex, their Tether and the US authorities poking at them!
at this point the only thing that can affect bitcoin is if they kick Bitfinex company's door down and close them even if it is for a short time.

We saw another small correction again but I don’t see that as the reason for the recent dump, maybe a little effect in the market but not all investors care about this news so we can’t really say if its the reason or not.

If conversions from bitcoin to usdt has an issue in a big state like New York there is no way it will not affect bitcoin in either way as traders will opt usdt for bitcoin and in a normal sense that should affect Bitcoin positive that is it ought to be an upward trend and not the downward trend we are experienced since yesterday after bitcoin hit $13,000. Maybe some weak hand has gotten the news and are taking it  as a negative news against bitcoin .

Ledger website from 2017/2018: https://web.archive.org/web/20171120085821/https://tether.to/

Ledger website today: https://web.archive.org/web/20190409184733/https://tether.to/

In plain English, Tether is now no longer backed 1-to-1 with USD as they used to claim, but is now "backed" by anything they want, including other cryptos and loan repayments. Not only loan repayments, but loan repayments they have made to "affiliated entities" i.e. other companies they own i.e. themselves.

So no need to worry if Tether becomes insolvent, because they can just print more, loan it to themselves, sell it on Bitfinex, and pay you back.

Tether is a scam.

Yes, and it will go up.

Bitfinex will just print more tether and move its operations far from New York.

I think it would affect the owners themselves and not usdt directly, there is nothing the usdt holders can do and they are not the complaint party here, it is the Mike Novogratz and tether that has to be worried about it.

Depending on the outcome the worst case of what can happen would be they would be punished for it and they will pay a fee (if I know them they will pay it with the money they put aside with tether) and then continue their operations outside of USA like nothing happened. They already keep their money in some Bahamian or something bank anyway so it wouldn't stop them doing what they are already doing.

That's down the road though. The court drama and subsequent investigation could take months or even years before reaching prosecution. In the meantime, USDT will be trading on the open market.

Ever noticed how when Tether FUD hits, Bitfinex prices start trading at a significant premium to the rest of the market? That's USDT holders redeeming for USD at Bitfinex and buying crypto to get out.

When you see this premium, Bitfinex and Tether FUD is pushing spot prices up.

These fake pumps must be stopped. Quickly
up 11000 usd per btc !!! unbelievable Investors will be hurt by the price crash like 2018
Regarding usdt , yes I'm sure that bitfinex not legit

evryone should review these current very expensive price

Why, you short? :P


If this is the start of a bubble like 2013 or 2017, then we're going much higher first. Based on the previous cycles, $20K+ could end up being the bottom of the next bear market.

i guess you and all those who started talking about Tether after a year of silence were either asleep or intentionally ignoring Tether all this time. when price was falling all through 2018 tether was being printed just the same way it was being printed in 2017 if not more!

Or, use the printed Tethers to buy Bitcoin, print more, pump Bitcoin, and then sell Bitcoin for real US dollars, and THEN pay you back.

I'm fairly sure this has been happening for a long time. It's such an easy way to obtain fiat that it's hard to think of a reason why it shouldn't happen. If nobody finds out about it they can do this for ever.

The only thing investors cashing out care about is that they get paid, and as long as there are only a few investors cashing out every now and then, Bitfinex will be able to keep this up without drawing too much unwanted attention.

They already admitted buying Bitcoin so the next logical step is selling it on exchanges such as Coinbase and Kraken to withdraw dollars.

if you're talking about what i think you are, they clarified they only bought/held a minuscule amount of BTC for the purposes of making OMNI transactions on top of bitcoin. https://twitter.com/alistairmilne/status/1130941040460992513

i think the "printing" is more like this: a client (like mike novogratz) calls them up during a major dump and says he wants to pump $100 million into the market. they don't wait for the wire to hit tether's bank account. they just issue the tethers and let him prop the market up. rinse, repeat.

This just in: 5 billion USDT was just printed! https://twitter.com/whale_alert/status/1150161710587764737

This coincided with the $700 bounce we just had. Maybe the Trump Dump met its match with the Tether printer! :D

It was an error, and they immediately burned $5 billion USDT. Apparently they were "only" supposed to create $50 million in new tokens out of thin air, and typed an extra couple of zeroes.

I mean sure, they corrected their mistake, but surely the fact this mistake even occurred is worrying enough? Given that every USDT is supposed to be backed up by actual assets, surely there should be some sort of process of confirming they actually hold x amount in assets before they are able to just create $5 billion of fake money out of thin air? Surely there should be some sort of process of having someone else check the figures entered? It sounds like it's just one dude sitting in a back room somewhere making stuff up as he pleases. It shows that Tether's current system would allow them to print enough USDT to buy every sell order for every coin on Bitfinex and exit scam with literally billions of dollars worth of crypto, if they wanted to. That should be enough to worry anybody using either of these platforms.

Agree here. The mistake shouldn't even have been possible in the first place. I thought programmable money and automated smart contracts were supposed to detect precisely these simple mistakes. Says a lot about Tether that needed human detection to correct. We're talking about the easiest of mistakes. Extra zeroes.

Another thing though, even that mistake of billions barely affected BTC price. If anything it pumped a few notches.