Bitcoin Forum

USDT was crticized in this forum because it does not have the 100% backing of real USD. According to Bitfinex, the tethers are backed 100% again. However, how are we certain?

Bitfinex also has pending inquiries on the New York State attorney general's office.



Whether or not USDT is fully-backed has long been a point of contention. The company has promised an audit of its stablecoin reserves (though it has not delivered one, and has since dissolved its relationship with its auditor), produced a third-party report saying it likely had more funds than outstanding tokens, and had a bank write a letter vouching for its holdings. (The latter two reports both acted as snapshots, only assuring the crypto community that on specific days, Tether’s obligations did not exceed its assets.)

Source https://www.coindesk.com/tether-says-its-stablecoin-is-fully-backed-again



Also, 70% of the total bitcoin trading in the cryptospace is made in USDT. This is an old source, however, I reckon the % might be close to similar at this moment.



In August, BTC trading into USDT represented 71.23% of total volume (traded into fiat or stablecoin).

Source https://www.cryptocompare.com/media/35651527/cryptocompare_exchange_review_2019_08.pdf



Are we sitting on a timebomb similar to the movie The Big Short?

https://i.ibb.co/CMPnfSz/1-CD72-EC4-C40-C-4-F0-B-B707-A4-AC17-A23014.jpg
Dr. Burry, The Big Short

Tether FUD? What is this, 2017? ::)

Until I see an FBI logo across Bitfinex and Tether's websites and a press release about billions of dollars seized from their bank accounts, I'm not concerned. I don't even care whether USDT is fully backed. The market doesn't care either as long as withdrawals are operational.

Someday I'm sure the music will stop but Bitfinex and Tether have been a "ticking timebomb" for several years already. Timing their downfall is impossible and to be frank, the US government looks powerless to stop them.

All Tether does is instantly convert to Tether when you "sell" your BTC. They are suppossed to do it automatically and instantly. What is the problem? What else would they do, not convert it?

@exstasie. Is this really fud, however, and not a reasonable concern for the people in the cryptospace? Similar to The Big Short movie, everyone except for a few were very confident that the housing market would never collapse.

We know the ending of that movie.

@bbc.reporter Tether has already admitted that their stable coins is not fully backed by dollars, and despite this revelation people have yet not stopped purchasing it which makes me wonder are they willingly allowing themselves to be scammed?.

@exstasie you’re absolutely correct as no one really knows when their scam will be officially busted, but till then we should act smart and avoid purchasing Tether.


Source:

https://breakermag.com/tether-now-admits-its-not-fully-backed-by-dollars/

considering that your percentage is a total nonsense and your title is also a bigger nonsense (Big Short is about the corruption of banks and how they have the economy in the palm of their hands, something that doesn't exist in bitcoin world), yes it is FUD.

Coinbase (100% fiat exchange) has ~35% of total volume
Bitstamp (100% fiat exchange) has ~22% of total volume
Bitfinex (both fiat and tether) has ~17% of total volume -> 89.5% ($22.04 mil) in fiat and 10.5%($2.61 mil) in tether
Kraken (both fiat and tether) has ~16.5% of total volume -> 99% ($60.05 mil) in fiat and 1% ($0.5 mil) in tether
gemini (100% fiat exchange) has ~4.5% of total volume
bit-x (100%(?) fiat exchange) has ~3.5% of total volume
the rest are too small to be counted (~2% among 10+ exchanges).

that means the total bitcoin trading in USDT is only 10.5%*17% + 1%*16.5% = 1.95% or merely 2%.
other tether volumes you see on sites such as coinmarketcap.com is the altcoin trading volume not bitcoin.

data is taken from https://data.bitcoinity.org/markets/volume/30d/USD?c=e&t=b and https://coinmarketcap.com/currencies/bitcoin/markets

You are forgetting Binance which has I think the largest volume in BTC/USDT. And as far as I know Bitfinex pair BTC/USD is against USD and not Tether. This is only BTC, keep in mind all the hundreds of alts traded on Binance against Tether. I think for BTC/USDT on a busy day is like $500,000,000 daily. Hence there is massive volume.


Not quite. It only converts to tether if you sell for USDT, so needs to be a BTC/USDT pair. If you sell on Coinbase, you get USD fiat. If you sell on Bitmex you get a type of Synthetic USD. Tether has been around for years and the FUD only started because one guy sold all his BTC too early in 2017 which started screaming "SCAM" on his Twitter. Forgot his nickname was something like Bitfin'ex or something similar.

Can the OP or anyone else say for a FACT what is to worry about? Is the problem you think the owners of the Tether coin are spending the money on Lambos and stuff? Serious...

Worry about transparency of Tether Limited.  The problems is they are minting Tether whenever they want and they claimed that these are 100% backed by USD but there is no transparent data for that. If you notice bitcoin volatility then you will realize its happening when some big amount of tether moved from there treasury. Means most likely it's been using to manipulate bitcoin price as well. Tether Limited failed to provide transparent audit reports. You may read short details on wikipedia (https://en.wikipedia.org/wiki/Tether_(cryptocurrency)).

Bitfinex has a bunch of fiat markets that include USD, EUR, GBP and JPY and they have the Tether market they also have some altcoins that are traded with different pairs. the volumes and percentages i reported is the sum of fiat markets (eg. BTC/USD) versus the tether volume (ie. BTC/USDT).
as for Binance the volume they report is partly fake and mostly belongs to their altcoin volume, when we talk about "bitcoin volume" we mean the volume where users trade bitcoin versus fiat or in this case versus tether not tether versus altcoins and altcoins versus tether.

I heard today that some experts talk about the price of Bitcoin on telegrams,
and they say that the price of Bitcoin could go down today, so looking and watching is the right choice, before you buy  :)

Actually only watched the Big Short last month -- one of my lockdown movies -- and always remember why I wait years to watch a "hit". Got to say it wasn't such a bad movie at all.

But nah, why would we have a Bitcoin edition? A Tether edition sure, but its peg hasn't been its only point of contention, and if the dollar and all other fiat no longer need to be fully backed 1-to-1, why would Tether need to be?

I always thought it was the (lack of) transparency that was our problem with all coins with issuers.

it seems that many people are concerned about today's closing to see if the price will drop too much to $ 8000 or not. I read this here:

Bitcoin Price: Why Today’s Weekly Close Is Crucial to Avoid $8,000s (https://cointelegraph.com/news/bitcoin-price-why-todays-weekly-close-is-crucial-to-avoid-8-000s)

Today the price dropped to $ 8900. we'll see tomorrow we'll be at what price

---

I know there is a lot of controversy around Tether, but I’m still using Tether because I haven’t seen them closed yet. Obviously I use Tether only to do day trade on exchange

that's the reason why Tether has always had such a huge volume and why it keeps on printing more. everyone is lulled into feeling a false sense of security. the same feeling they had with many exchanges like MtGox with the logic that "they haven't gone down so everything must be fine". then some day you wake up to see the disaster.
in any case i think USDT is a disaster waiting to happen but its influence on bitcoin has always been greatly exaggerated.

Dunno about a 'Big Short' but I think it's gonna happen like the Nikkei...  We won't see new all time highs in a looong time.  Maybe more than half a decade.  IMHO.

Edit:  More than half a decade after the halvening.

Of course they are lying. Let's face it, if someone says that they are going to get audited and then stops working with the company that audits them, it shows clearly that they wanted the company to lie about the audit and tell it was 100% backed and when audit company declined to do something like that, they severed ties with them.

Look at the banks they work with, those banks telling us that they have enough money, even more than enough money in their bank means zero because they are not really a true bank that you can trust. Put all your money into a trusted american or European bank that we could see and that is when I will once again start to trust tether, until that moment they are just bunch of people who basically stole a lot of money in a very smart way that nobody suspected.

It's BTC bears that push the Tether doomsday narrative. House of cards propped up by Tether, they say. The funny thing is that Tether FUD may actually be bullish for BTC. Consider March/April 2017 when they lost the ability to process bank withdawals. Bitfinex fiat and USDT holders panic bought crypto, the rest of the market followed, and it turned into a parabolic bubble.

Now if Tether goes down for good (brought down by the US government for example) it will provide a shock to the market. Bad news event. Having lived through many of them, I know what really matters is whether BTC is in a bull market or bear market. For examples, look at Mt Gox's collapse in the 2014 bear market, or BTC-e's collapse in the 2017 bull market. If Tether goes down during a bubble, it will probably be a deep shakeout that gets quickly retraced, maybe like the October 2013 collapse of Silk Road.

My friends and I have always joked about the "Tether printer." It's rather funny to see the recent Fed actions eliciting the same meme. Half-jokingly, it feels like they took one right out of Tether's playbook. :P

I think OP's whole point is Bitcoin right now in trading is heavily paired with USDT so basically if USDT got screwed in terms of its price it will pbviously affect Bitcoin's price so as other cryptocurrencies being paired with it. The crash in USDT will just result to these Tether hodlers to jump out and exchange every USDT they have and accept all sell orders in the market, prices will go down as a result. So if this is a potential big short I think exchanges need to act out and consider slowly removing USDT pairs in their platform.

This is not the same with what is in the movie the big short, bitcoin has been shorted many times and in fact we call this a very risky asset since it's so volatile, it could pump and dump anytime, and no economic tie with using USDT and BTC, so whatever happens with the economy, we can still stand just like what we are experiencing now, and if the exchange is proven not having the reason asset to back its USDT, then probably they will face the sanction.

Thing is, the big short has a lot involve, we've seen the bankers being so corrupt selling assets in an overprice value where in fact it has been sold many times and until that loan has ballooned and that problem explode, the only difference from crypto is that they have the government to bail them out.

in crypto, what we have? can we expect satoshi to bail us out?

The list of bitcoinity.org is very incomplete hehehe. It does not cover all the trading volume of USDT and fiat for bitcoin.

Check listed pairs in coinmarketcap.com. I reckon this tells us that USDT volume is clearly more than 2% of the total volume.

https://coinmarketcap.com/currencies/bitcoin/markets

Also, check total volume of all cryptocoins. Tether has the highest trading volume, more than bitcoin, which implies that tether has become a dominating coin in the whole of cryptospace.

https://coinmarketcap.com/

I think The Big Short took place in February, it was a strong dump that surprised the whole market and a series of traders suffered heavy losses. Now the halving event has taken place and its price will not be able to fall too much. miners need to be profitable so I think prices will be slightly adjusted after so many weeks of growth. I believe in the future the price of bitcoin will go up and maybe retest the old ATH - $ 20k in 2021.

If you want to use that analogy then the Big Short maybe took place in late 2017 when it rallied very quickly from $3K to $20K or so. In February there wasn't many people bearish, just the covid19 event took many by surprise.

The Big Short would mean that everybody is shorting the market right now, since people are losing jobs but the market is still rallying. Similar to how people were not paying their mortgages back in 2007 but the markets kept reaching new high anyways, then those 4 groups of people created a huge short against the mortgage markets.

So if history repeating itself, possibly so. There are many people who are betting that Covid19 gets worse before it gets better to profit. There are many so called default swaps out there which will increase in value if the markets crash again.

brrrrr (or some similar haha) was trending on Twitter for days at some point last month!

Yeah, I had my moments when I was completely immersed in Tether conspiracies too, specially around the time of Spoofy the magical super-trader entity, and then checking out all those Bitfinex'd posts. That was 2016/17 too. Got to really say all the things that were supposed to be bad news for Bitcoin actually turned out well for it. 2016/17 was really an outlier, wasn't it? China, Tether, BCash "civil war".


Never held any USDT so will never have that worry but if what exstasie reminds happened in 2017, then this can only mean more BTC holders, possibly ETH if liquidity becomes a problem. Goodbye to stablecoins after that.

I agree with that.If Tether goes down for some reason(including the good old "tether isn't 100% backed by USD" accusation),some other stablecoin will definitely conquer their market share,because the crypto traders want to convert their volatile coins into a stablecoin.I'm not a fan of Tether and stablecoins,but if there's a demand for such coins on the crypto markets,that demand should be covered.That's how the market economy works.

Everything hasn't proven yet so I supposed not to worry about it for now. However, if these two will be proven guilty and everything are scam then the whole market may suffer but maybe not to the extent that the crypto space will die for sure when this happens experts have a plan to make the market survive.

Anyway these two are already on the hot seat so let the investigation roll and for now it will be better to sit and watch what will happen before doing anything because we probably missed the truth and failed to know what will be the best action we can do. This concern is already on the hand of the authority and let's just hope whatever will be the outcome for sure it will be fair for everyone.

It has ended for Big Short, Bitcoin has experienced Big Short and now the path for Bullish has been opened after Halving ends, if you see,
Altcoin is now experiencing an increase, XDCE, THETA, MBL etc. have experienced an extraordinary increase, maybe altcoin season will come

Bitcoin's history is so short, nothing really qualifies as an outlier. I strongly believe that the underlying market conditions (bull market vs. bear market) determine whether fundamentals and news events matter. If the Bcash war or BTC-e collapse took place in the middle of a bear market following a blow-off top (like early 2014), they would have been much more bearish events.

By the same token, I don't think the Tether crisis of early 2017 caused the bubble either, but people panic buying out of USDT surely reinforced the bullish trend in BTC and altcoins and may have accelerated the whole affair.


I'm honestly bullish on stablecoin proliferation. I think asset tokenization is a trend that will continue and stablecoins become really attractive in that context. I'm just not sure how long Tether will hold the crown.

Wow, I guess I haven't been following crypto news as closely as I should, because I didn't know that.  Then again, stablecoins have always seemed superfluous to me.  I get that they're supposed to be a stand-in for a fiat currency; I just question their necessity.  And if any stablecoin is not being fully backed by the currency it's supposed to be backed by....yikes.  I wouldn't want any part of that.

Is there a mechanism by which you can short Tether?  I wouldn't think of doing this myself, but I bet you that there could be a situation just like in the Big Short where only a few people are acknowledging that the emperor isn't wearing any clothes. 

@The Pharmacist. Bitfinex claimed that tether is backed 100% again. However, the evidence might only be snapshots on certain dates hehehe.

Source https://www.coindesk.com/tether-says-its-stablecoin-is-fully-backed-again

In any case, there are bull and bear tokens created by ftx.com. They are tokens based on a 3x leveraged position on bitcoin. The problem is the only markets available are paired with USDT. This cancels the idea of the bear token for The Big Short scenario hehehe.

i guess you missed the bold part.
by the way i am not denying that tether is dominating the market but the altcoin market not bitcoin market. most of the volume reported here (https://coinmarketcap.com/currencies/tether/markets) is either fake volume from shady exchanges or it is from altcoin volume against USDT. and when you want to discuss about "bitcoin price" and its future you can't use that are a reference.

@pooya87. You are correct! This is an old report created on March 20 2019, however, during the time it was made the reported volume for bitcoin was $6 billion and the real volume was $273 million. The ratio might also be similar today hehehe.

List of exchanges with real volume is mentioned in page 61.

In any case, the exchanges that gave real reports on bitcoin volume that use USDT were Binance, Bitfinex, Poloniex and Bittrex. I would not speculate that the volume for USDT was only on 2%, however. Binance and Bitfinex had much of the volume out of the 10 exchanges that had reported real volume.

Source https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf

Also, if the real volume was only 6% of the reported volume, would this not be easier for the tether printers to manipulate the market?

i don't think so, and having a very low share of the market is not the only reason. the other and maybe even main reason is that bitcoin traders don't care about what bitcoin price is against some altcoin even if that altcoin has U.S.D. in its name like USDT. they instead care and look at bitcoin price in fiat. you'll never see a trader say bitcoin is worth 9700 tether so i should buy it at 9500 dollar before it goes up or sell it at 10000 dollar before it goes down.
this might have changed a little over the past 3 years that the media has been spoonfeeding everyone the same FUD but in the end the number of those who eat it up is very little. same as the previous FUD that started around 2010 and continued many years saying "China controls bitcoin".

@pooya87. I am shaking my head on that explanation. The question was if bitcoin's real volume was only 6% of the fake volume, would it be not very possible for the $8.81b of total USDT printed to pump, manipulate or support the price of bitcoin?

Also, what do you speculate would occur if Bitfinex, Ifinex and Tether were sentenced and ordered to remove all their stablecoins from the cryptospace? This might be a very dangerous situation we are in because Ifinex, Bitfinex and Tether might only be shell companies as reported in this article.



Address 1: Suite 13/F, 1308 Bank of America Tower, 12 Harcourt Road Central

When we get back to the first floor, we recheck all the signage and office listings to see if iFinex is anywhere to be seen. It isn’t. We ask the guards if there’s a iFinex somewhere in the building, perhaps unlisted. “No,” they tell us.



Address 2: Easey Commercial Building, Suite 1902, 253–261 Hennessy Rd., Wan Chai

J & C (HK) Business Limited is printed on the opaque window framed within the door. We knock and a faint voice says something in Cantonese. The tonality makes me think we’re welcome. Besides, door’s unlocked. Inside is a small office with a few desks, fluorescent lights, a water cooler, and a printer. In back are two even smaller, empty offices with their doors open. Two 40sish Chinese women stare at us, not sure why we’re there.

“Hi,” I finally say, “we’re looking for Bitfinex. Is this Bitfinex?”

The woman nearer speaks up. “What?”

“Uh…” I start using my hands like an idiot, pointing at the floor and all around, as though it’ll translate better, “Is this Bitfinex?”



Address 3: Room 803 K Wah Centre, 191 Java Rd., North Point

A Chinese woman, again in her 40s, again surprised to see two Westerners, opens the door enough to speak with us. Her English is perfect. “Hello, can I help you?”

“Yes,” I say, “we’re looking for Tether. This is the listed address. Is this Tether?”

She shakes her head no, “No, no.”

“I see, and do you work with Tether? Are they a client?”

With every question she seems more suspicious. “No,” she says, “I have never heard of Tether. Sorry. Have a nice day.” She shuts the door and walks away.

Source https://medium.com/@thecaspiancey/finding-finex-3eefac0d45a2

News update on Bitfinex.

I have questioned this before. Is the state of New York and the New York Attorney General's office wrong on this by overreaching over the jurisdiction of their authority?



Today the New York State Supreme Court’s appellate division ruled that Bitfinex will have to face New York state allegations that it hid the loss of commingled client and corporate funds. In April 2019, New York Attorney General Letitia James alleged that Bitfinex lost $850 million in client and corporate funds, and then used money from affiliated stablecoin Tether to cover the loss.

The appeals court rejected both Bitfinex’s arguments that Tether is neither a security or commodity, and that since they are not based in New York or cater to local traders, they shouldn’t be answerable to or have to produce certain documents for New York authorities. The appeals court said it has jurisdiction over its issuer.

Source https://messari.io/article/bitfinex-must-face-ny-suit-over-850-million-in-lost-funds

First of all, I'm not keen on Tether, Bitfinex or any crypto remotely related to this kind of infinite printing and opaque structures, but at the same time, this definitely shows us all and hopefully others that if you put your trust in a company, then you always risk the long fingers of the US government. Use Tether/other central coin and understand your risk to your money.

I don't know all the specifics, but I know Bitfinex screwed themselves by continuing to serve New York based clients like Galaxy Digital (Novogratz) long after they supposedly banned US and NY traders. They were serving those clients during the time period when the $850 million shortfall occurred, so Bitfinex's claims that they don't "cater to local traders" obviously doesn't hold any water. New York has jurisdiction.

I have a theory about what is happening here. The state of New York has very little power to enforce anything against Bitfinex. One might wonder why they are pursuing this case at all. My theory is the New York prosecutor is being used as a pawn in a larger federal investigation into Bitfinex and Tether. New York is extracting a treasure trove of information and documentation about Bitfinex and Tether's structure, bank accounts, etc. I believe they are turning everything over to the DOJ, who is building a case and watching their assets so they can seize them when the time comes.

We still have a price wavering back and forth as we enter week beginning, I think its not yet a good short more a risk to call it.   Generally I'd guess weakness and we've failed to maintain the 50 and monthly averages, on the line of losing weekly which I usually relate to positive or negative near term sentiment or momentum in price.

https://talkimg.com/images/2023/06/12/A4ynZ.png

highs today were the 50 daily average again and rejection from there for now.


Nothing there to test really, just this last years peaks would be more of a thing.    Break that confirm above and I hope not to flinch for 20k.     The real big short will be in dollars in any readjustment, theres political reasons why dollar weak or any other currency does not want to gain vs dollar.

It appears that they have created a derivative as a hedge against what is also supposed to be also a hedge against the corrupt traditional financial markets hehehe.


New Crypto Derivatives Let You Bet on (or Against) Tether’s Solvency

After years of debating whether tether (USDT) is fully backed 1-for-1 with U.S. dollars, the stablecoin’s critics and defenders alike can now put their money where their mouths are.

Opium, a derivatives exchange, has introduced credit default swaps (CDS) for USDT. The product, launched Thursday, insures the buyer in the event of default by Tether, the issuer of the world’s largest stablecoin and fifth-largest cryptocurrency overall.

In this case, a sharp drop in USDT’s price from the usual $1 is used as a proxy for Tether turning out to be insolvent. So if the token fell to 70 cents, the writer of the contract would pay the buyer 30 cents at maturity.

It’s the second time in a month that Opium has launched a CDS tied to a digital asset. Such contracts have been around on Wall Street since the 1990s and gained notoriety for their role in the 2008 global financial crisis.

Source https://www.coindesk.com/credit-default-swaps-tether-opium

This appears to be the cause of the small dump on bitcoin.

However, that might not be the real problem. The real problem might be, are the executives of Bitfinex, Tether and iFinex next?

In any case, Bitmex domain has not yet been seized.

https://www.bitmex.com/



Founders And Executives Of Off-Shore Cryptocurrency Derivatives Exchange Charged With Violation Of The Bank Secrecy Act

Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced the indictment of Arthur Hayes, Benjamin Delo, Samuel Reed, and Gregory Dwyer, charging the four with violating the Bank Secrecy Act and conspiring to violate the Bank Secrecy Act, by willfully failing to establish, implement, and maintain an adequate anti-money laundering (“AML”) program at the Bitcoin Mercantile Exchange or “BitMEX.”  The case is assigned to United States District Judge John G. Koeltl.  REED was arrested in Massachusetts this morning, and will be presented in federal court there.  HAYES, DELO, and DWYER remain at large.

Source https://www.justice.gov/usao-sdny/pr/founders-and-executives-shore-cryptocurrency-derivatives-exchange-charged-violation

Honestly in a perfectly fine world I would bet against USDT in a minute, they are going to bankrupt and everyone will realize they are getting scammed very quickly, there is no doubt about that in my mind, however what we are forgetting is that when you worth billions of dollars there is always some sort of way not to get caught, they could simply just focus on spending that money to continue in operation as long as they can, which could be the fake and not real and would be illegal but when you have billions coming your way constantly doing something illegal is not really a problem.

Not that their money is in USA neither, if it was that would have been seized long ago, it is in Bahamas in a shady bank as well. So, they will be operational but bankrupted behind doors.

@SquallLeonhart. There can be an argument that a bet against Tether can also be a bet against the price of bitcoin.

Also, this news. Are we under regulation season? Who will be next?



John McAfee has been arrested and is in Spain awaiting extradition to the United States.

Today, the Department of Justice unsealed a June 15 indictment for tax evasion, which alleges that the cybersecurity software developer and ICO hype man hid cryptocurrency and other assets in bank accounts in others' names. If convicted, he faces up to 30 years in prison.

Shortly before the announcement, the US Securities and Exchange Commission (SEC) filed a civil complaint in US District Court against  John McAfee, alleging he secretly made over $23 million from promoting seven initial coin offerings.

Source https://decrypt.co/43969/sec-sues-john-mcafee-for-shilling-crypto-icos

Whenever USDT prints out more money whenever they feel like it, they cause the bitcoin price to both go up but also long term go down. The reason it goes up is the simple fact that they do not always end up giving it all for money, so they end up buying bitcoins with it, a lot more USDT equals a lot more money in the market and that makes it go up.

However USDT is not continuing the way they printed so it makes sense that volatility stopped. Bitmex deal probably won't be a big issue since now there are other places you can do this, plus people can still withdraw from bitmex, hence I believe they will just find another bitmex for themselves and that will be the end of the story for them. Only people who need to worry about this is the bitmex people who got jailed.

The US government is going after people left and right. Indeed, who's next?! :-X

What the hell was he doing in Spain? You'd think he would know better than to hang out in extradition-friendly countries. Damn, I honestly thought that guy would be trolling us for years to come.

Going after ICO promoters now.......you can almost hear Crypto Twitter collectively gulping in fear.

The USA has unique tax laws in that even while in another country for years you owe the US government taxes on your income.  Most famous case I think of is the UK premier who born in USA was asked by IRS to pay taxes on his London property despite being British and earning everything in uk he was dual citizen so liable apparently.  I forget the reasoning for it exactly but there isnt any other country that monitors its citizens like that, only on resident domestically earnt income tax.    There doesnt seem to be much chance he can avoid the fine exactly and lots of money to lawyers to mitigate the long jail term.   Same as Japan the citizens are the ultimate unlimited resource to bail out what would otherwise be an easily insolvent fiscal debt schedule.   I wonder how much of his personality is real or fake because if he tries to really act in resistance or defiance of the law they'll keep him inside till the day he expires basically.
   Another case I followed about a man who contested not state taxes but federal jurisdiction over his income and wrote a book, was a real true believer in this idea unfortunately died in prison after being left to go blind and without proper treatment for cancer even in his last moments he was handcuffed to a hospital bed; I guess no taxes is a capital crime.  
  Such cases do relate to BTC in that cash flows across borders is quite a large part of its competitive advantage and domestic tax law interference in what should be free flow currency is very negative for value imo with red tape overheads, etc.    The flip side to QE free money, endless fiscal stimulus is a very negative tax on everything a person can do, McAfee is ridiculous but there's a wider question that applies to all imo.

We would never know who until the American government begins to act. However, we might know someone who founded a company that has been selling illegal securities tokens for 7 years speculate that he might be next hehehe.


According to Chris Larsen, co-founder and executive chairman of Ripple Labs, the company is likely to move its headquarters overseas because due to the regulatory stance of the federal government towards the crypto industry.

Source https://www.theblockcrypto.com/linked/80039/chris-larsen-ripple-may-leave-us

I'm surprised they stuck around this long after Fincen came after them in 2015 for illegal money transmitting, BSA violations, etc.

If they really have been illegally issuing securities all this time (the jury is still out on that and the SEC has not commented) then moving overseas now won't save them.

I'm more worried about exchanges. I don't think Bitmex is the only exchange being targeted right now. There could be other sealed indictments that haven't come down yet. I worry about platforms like Bitfinex and Binance.

I believe that the upcoming US presidential elections will make their own adjustments in the cryptocurrency market. In my opinion, this will happen after Biden's victory. If the official policy on cryptocurrencies is positive, then we should not be afraid of the decisions of the CES in the future.

No one can touch ripple labs. They are bankers. They will simply pay huge fines and just continue doing whatever they are doing.


For McAfee. He total understood crypto long time ago. But still acted totally dumb. I will never understand him.

Do not worry, Bitfinex and iFinex is being targeted already because of issuing USDT hehehe. They do not appear afraid, however. They have issued the last 70% of total USDT only in the last 2 years.

@Febo. I argued about that before. However, why is Chris Larsen saying that Ripple might move overseas? Can their political connections not protect them anymore?

Honestly, sometimes I wonder if they're invincible. All those years operating illegally in the US, multiple government investigations, fines, etc. and still the only way the US government has ever gotten to Bitfinex's money was by happenstance, because Crypto Capital was holding their money when they went down.

They play one hell of game of cat and mouse!


Maybe because Fincen labelled them an MSB and they want to be able to engage in XRP sales without AML/KYC. Or because they're worried the SEC is going to bring the hammer down on them.

The 3 are not quite the units that are supporting the price. Bitmex is only a derivatives exchange, UK government does not have influence over the cryptospace and John McAfee is a joker.

This type of overconfidence should not be applauded. He might have forgotten that the largest exchanges' market makers that use USDT are the real agents that support the cryptospace market.



#bitcoin holding strong after:
- BitMEX crackdown by US govt
- Crypto derivatives banned by UK govt
- McAfee arrest by US govt

Source https://twitter.com/100trillionUSD/status/1313774401217855488

Bitmex was consequential for price discovery. They have been for years. Derivatives platform or not, lots of large traders hedge their spot positions there. They might continue to be important yet if they can come to an agreement with the US government that settles the charges.


Here's the interesting thing about that: what happens if the US government comes after Tether, freezes some bank accounts, etc? BTCUSDT and ALT/USDT pairs might go to the moon as the whole market panics away from Tether. When Bitfinex and Tether lost the ability to service fiat withdrawals in March or April 2017, that's exactly what happened.

And you know what happened after that. :P

@exstasie. The American government pulling the rug on Tether is different from Tether only losing its banking partner. Also, your argument implies that it was a pump and dump.

Taking down Tether and iFinex will remove billions of USDT from the market and the reduced liquidity might not handle the panic.

Why shouldn't bitcoin be strong after those news? I realize that you may think some of them are related to bitcoin itself so the price should be affected but I do not see it that way at all. Think about it there are three things that are "major" in the crypto news cycles and none of them directly impacts the price right away, maybe the idea got hurt (which it didn't) but the price itself had nothing at all.

Think about it this way, bitmex ceo got jailed, and that had nothing to do with people buying or selling bitcoin at all, it is owner of a company in crypto and that's it, derivatives banned (which is great) which still doesn't stop people from buying or selling, or Johm Mcafee got jailed, which is a great news and still no buying and selling affected, NONE of these affects the price directly.

Sure but the result is the same: people panic buying out of USDT and if possible Bitfinex USD, and into crypto, due to fear of underlying insolvency or imminent collapse.


How so? If people dump USDT because they are scared it might become worthless, how does that make it a pump and dump?


It's impossible to know what would happen. It partly depends how it goes down. If it's like with Bitmex (domains and servers not seized) then maybe Bitfinex and Tether's remaining assets could be unwound relatively smoothly.

What I do know is that USDT and Bitfinex markets are tightly pegged to other spot exchanges through arbitrage. Traditionally when this peg is broken due to banking or liquidity problems or FUD, Tether and Bitfinex work quickly to sort out liquidity for their very largest corporate clients, who can then arbitrage the markets back into line. Like I said, a lot may depend on whether we're talking about a full blown seizure like BTC-e in 2017, just the unsealing of indictments like with Bitmex this year, or somewhere in between.

Exchange hacks and failures also haven't been affecting the market all that much in recent years. I wouldn't necessarily expect a crash like after the Mt. Gox collapse. But Bitfinex and Tether are quite large so like I said, it's hard to know what would happen exactly.

All I know is you better have your popcorn ready. :P

@exstasie. I disagree. People might also panic sell bitcoin without the liquidity provided by USDT.

You said that Tether lost its banking partner, however what happened? There was a pump on April 2017 then dumped on December 2017.

Agreed, have that popcorn ready. However, USDC in circulation has increased from $500 million on March to $3 billion st present. It might be adopted by more exchanges to save themselves and us hehehe.

Maybe so. Just pointing out that it's not necessarily so simple as "US government takes down Tether, Bitcoin crashes."

A lot depends on the underlying market context too, i.e. whether it's a bull or bear market. Bad news never stops a bull market. When the US government took down BTC-e in 2017 (and they were a very important exchange at the time) there was a temporary dip but BTC went parabolic shortly after.

@exstasie. I cannot agree. Tether is speculated to be carrying the whole cryptospace with the biggest volume and liquidity. It will not be whether it is a bull market or a bear market. If the American government is successful in the Tether rug pull, we should be hoping that the speculations are not true because it will certainly be the cryptospace's version of the Big Short.

BTCe is not a good comparison. It only had a small percentage of the total volume in the cryptospace on 2017. Mtgox might be a better comparison.

Bet against tether is not a bet against bitcoin at all. Tether is owned by a company, well actually tether is the company, usdt is the product they are putting out. Which is why I keep saying that tether and ripple type of company owned stuff should be excluded from the cmc and all the crypto discussions. They are just a company and they have a product, they are not decentralized crypto currency.

I feel like tether could crash and be worth nothing and bitcoin market will be affected by it but can move on without any problem. Didn't we had bitcoin before usdt was a thing? We definitely had it and we will still have it if USDT gets cancelled as well by SEC. I am also glad that John finally got what he deserved, I have nothing to say about that, dude deserved it.

We'll see.


I disagree. The exchange space was much more concentrated in early-mid 2017 than now. And when Mt. Gox went down in early 2014, there were only a handful of relevant exchanges. It's worth noting that Bitcoin was in a bull market in 2017. It was in a bear market in 2014. ;)

This is an archive of CMC exchange rankings the day before BTC-e went down: https://web.archive.org/web/20170724163440/https://coinmarketcap.com/exchanges/volume/24-hour/

BTC-e and xBTCe (BTC-e's margin platform at the time, which used their liquidity on the back end) took the #7 and #15 spots by volume. Notably, several of the exchanges ahead of them are known for faking volume.

BTC-e was very important at the time.

@exstasie. 2017 became the dominance of Binance, Bitfinex and some Chinese or Korean exchanges. I am
not certain, however, BTCe's millions in volume was very much lower than the top 3 exchanges' billions. BTCe on 2017 was not relevant anymore.

It also appeared to be the exchange that money launderers used to dump their coins to retrieve fiat.

In any case, yes we will see.

I really think this challenges that point of view:


The exchanges ahead of BTC-e included Yunbi, CHBTC, Coinone, Korbit, and other volume faking exchanges.......give me a break! ::)


Sure. Does that imply it wasn't an important exchange? The fact that the US government thought they were worth taking down (not to mention trying so hard to extradite the alleged owner, Vinnik) would suggest otherwise.

I would argue that if BTCe was really relevant in the cryptospace during that time, why was the bull market pump of 2017 not affected by BTCe's takedown?

I don't know why people are taking this lightly or acting as if they don't care about this. This post technically makes sense. If you say that you hate fiat but don't care what all scam is going on with USDT then you technically are giving you a false belief. But yes the amount of USDT that we have currently in market cap is pretty difficult to accomodate in reality. Moreover until now I am surprised that when we are talking about money supply of USD reaching heights why isn't the US government concerned about so much USD lying in with bitfinex? Isn't this strange?

That's exactly the point I was making: Bad news can't keep a lid on a bull market. Good news can't prop up bear markets either.

Did the rejection of the highly anticipated Winklevoss ETF stop the bull market in 2017? How about when China banned Bitcoin exchanges and ICOs? No, each time (like when BTC-e was taken down) we got a dip, and then the market went to new ATHs again.

This is why technical traders often say "news doesn't matter." The underlying trend is usually much more powerful.

However, a Tether takedown will not be some bad news that we can ignore carelessly. The whole cryptospace and most of its liquity depends on Tether. Bull markets cannot be created without it unless real dollars or another stablecoin also reaches a similar amount of liquidity.

Also, the essence of my argument is not fud. It is to warn us from making similar mistakes made by those overconfident people during the real big short.

I've always contended that Tether represents a big chunk of Bitcoin market liquidity, but "most" is a big overstatement. I also think you underestimate how quickly Tether's competitors will swallow up its market share if things go that way.


Real dollars, like the ones flowing into Coinbase, Bitstamp, Kraken, etc. during a bull market? We need dollar inflows, not necessarily stablecoins.


I'm not the type to accuse anyone of FUD anyway. I just think you underestimate how robust the exchange ecosystem is (it would be nothing like Mt. Gox in 2014) and more importantly, how strong bubble psychology is. Bad news can't stop a bull market, let alone a bubble.

@exstasie. However, an overstatement or not, an immediate Tether takedown will cause a liquidity crisis. How fast will real dollars and Tether's competitors swallow up its market share without causing a big short? I speculate not fast enough. We cannot assume that the billions in Tether will be transfered to other stablecoins or real dollars in 1 day.

Is there really someone that is doing mistake in bitcoin or cryptocurrency, I don't think because everyone is taking chance in speculation of price move. You are not sure of it until it is done, you just have move and not to show even regret.

There have been many scams in bitcoin, ever since the Mt Gox. exchange imploded many years ago. I'm not sure that any one exchange (beyond maybe coinbase) has the potential to blow up the system and it certainly wouldn't have the same effect or scale as the Big Short film portrayed. The big short film represented the subprime mortgage crisis which involved trillions of dollars and the potential to lead the world into a depression if it was not handled well. One exchange going down would hurt many people, but it would not have a destabilizing effect on the world economy.

How so? Could you elaborate?

The immediate liquidity crisis, as I see it, would be out of USDT and therefore into cryptocurrencies.


Tether holders would absorb losses, whether by panic buying out of USDT or by waiting for a bankruptcy or similar action. I still maintain that whether this causes a serious crash or prolonged downtrend depends on the underlying market trend. If they take Tether down in the middle of a bubble (like 2017) it won't stop the bulls, anymore than when the Chinese exchanges were shut down.

coke steroids lots of women  will make a lot of men act badly.

However, you do not see the other side of the argument. Tether could arguably be the one that supports or one that mostly supports the cryptospace market. Taking it down would be similar to taking away the foundation and cause it to fall.

How would the Tether holders exit Tether if it was taken down by the exchanges?

Also this article.


Did you know that each time Tether is traded a small fee is charged, and that they can just change the fees and terms of their contract at any time??

There is no possibility for transparency because this contract has a backdoor that allows the owner to change the terms at any point:

Source https://inst.medium.com/tethers-fees-4f1ce048bfba

Tether in Ethereum might be easy to takedown if declared illegal and if ordered to cease operation by the government.

@Fortify. Agreed. This is only the cryptospace edition hehe. Also, markets always recover.

@extasie
don't you think that, out of an attack on bitfinex/tether/usdt, an analogous crisis could be engineered by an attack on defi and stablecoins, whose generalization results in a big problem for central banks of the world?

Tether is an important part of the ecosystem, sure, but to suggest the entire crypto space would collapse without it is nonsense. Exchanges are completely insulated from Tether's collapse; it's only USDT depositors that are exposed. I also maintain that this is not 2014; one exchange being taken down will not have the same effect as Mt. Gox did back then. And like I said, a lot depends if there is an underlying bull or bear market when it happens. I think I gave some pretty good examples of how bad news never stops a bubble.


I don't think they would all do that, and certainly not immediately.

You might be wrong in speculating that exchanges are completely insinuated if Tether collapses. Many of them depend on the liquidity to maintain their orderbooks. I would speculate that a liquidity crisis might force some exchanges to suspend and close their service.

Also, why would it depend if it is a bull or bear market? I would argue a Tether takedown would be the beginning of a new bear market.

Tether's credibility has been in doubt for years and has been encountered lawsuit, it is an unwise decision if the exchange's liquidity backed by USDT, they just list it for traders but hopefully don't hold it as a reserve.

"Kiana Shek, Digifinex’s co-founder, told CoinDesk she’d been “looking for ways to get rid of USDT” for months, adding, “I simply don’t believe in tether but I had no choice” but to list it.^{[1] (https://www.coindesk.com/a-top-20-crypto-exchange-is-replacing-tether-with-a-rival-stablecoin)}

If Tether will be takedown, then every trader who holds it will suffer losses but won't affect the whole crypto market significantly to cause a new bear market.

If altcoin exchanges have thin order books because volume hasn't yet moved to other stablecoins like USDC and BUSD, I don't think that qualifies as a liquidity crisis. And there's no way any exchanges would suspend service just because they list Tether markets. They can still make good on all their obligations to depositors.


Because underlying supply and demand is much more powerful than any news item, even an important exchange going down. I just gave you several real life examples from 2017 that show this. An observable phenomenon: novice traders always blame news for price moves, whereas experienced traders don't.


You might be right, but only because of timing. ;)

Let's agree to disagree. We're starting to go in circles......

How would it not be a liquidity crisis if leading exchanges that has billions in their orderbooks before Tether takedown would only have millions after takedown? The cryptospace markets will be shocked.

Who said a Tether takedown would only be news?

I hope I will not be right, however, I reckon I would only be right because of fear, panic and low liquidity caused by a Tether takedown.

Agreed hehe.

Do me a favor and explain exactly what you're saying will happen, step by step.


Semantics.

Fine, the Chinese exchanges getting shut down and BTC-e getting shut down in 2017, those weren't just "news" either. And yet, those events didn't stop the bubble did they?

Don't tell me Huobi, Okcoin, BTCC and BTC-e were irrelevant in 2017. Any old timer will tell you differently.

Just look at what's happening with Bitmex, with owners under indictment and arrested by the US government. We're talking about the most liquid BTC derivatives exchange in the world. Do you see the market giving a shit? No, BTC is threatening to break above yearly resistance instead.

@exstasie. I have been thinking about a good reply, however, I cannot say anything how exactly it might happen. I can only speculate that it might begin a new bear market again.

Would this be the end of the cryptospace? No, it will recover similar to 2013, 2017 and also similar to the big shorts on equities markets.

Obviously we can never deny the fact that bitcoin could always go down, there is really no regulations and no governments and nothing that could stop or try to reverse it, it all depends on the people who trade bitcoin and that means if you and I decide that we do not want to be part of bitcoin anymore and sell our bitcoins, that will decrease the price of bitcoin and if enough people do this the price will tank without anything that could stop it.

However people are thinking purely technically when they are talking about drops yet they do not do it when it comes to increases, same logic applies to increases as well, for example bitcoin could be $100k each and "technically" it is possible, but we do not see it breaking over $15k right now. Which is why we should look at public perception and not what is technically possible.

If it happened right now I would bet on a flash crash below $10K, but ultimately the market would end up ranging bullishly and breaking upwards again. I would compare this scenario to the Bitfinex hack of 2016: a temporary dent in a bull market, and the temporary loss of a big chunk of the market's total liquidity.

If it happened in 2022, a few months after the next bubble pops, for example, then I bet it would look more like Mt. Gox. In other words, it would amplify the bear market that was already in play.

That's how I see it anyway.

@exstasie. Unless the liquidity from a Tether takedown is quickly replaced, I disagree. I speculate that it might take longer for the cryptospace to recover.

At this point, you're just speculating without basis.

Bitfinex was probably the single biggest spot exchange in 2016, and they didn't quickly replace the liquidity that was lost. It took almost a year for them to pay back the debt, and when they did they were in the middle of a banking crisis (April 2017) where they couldn't physically pay out the USD.

But clearly, there is no stopping a bull market.....

@exstasie. The argument was based on the speculation that the NYAG was successful in taking down Tether and take out the liquidity from the cryptospace market.

Also, Tether liquidity is not isolated on Bitfinex. The cryptospace depends on Tether. It can also be argued that it supports the whole cryptospace market.

Just to be clear, the NYAG is ineffectual. They have no capability to effectively enforce anything. Any successful take down of Tether would involve the US Attorneys office, US Department of Justice, etc.


So what? My point was that in mid-2016 when the hack occurred, Bitfinex represented a massive chunk of total exchange liquidity. And yet those losses didn't reverse the new bull market, even though all that liquidity wasn't replaced for the better part of a year.

That's what your entire argument about Tether is about, isn't it? That Tether represents a massive chunk of total exchange liquidity? I'm saying it still doesn't matter, not in the face of a powerful bull market like we're seeing now.

Any bull market based off speculation is subject to large pull backs, because the quality of buying is often soft with borrowed or leveraged money that must be repaid on any price fall.   Its quite inevitable and further we stray from moving averages the more risky the move becomes, to develop over time into a large positive price accumulation is fine but very often prices become inaccurate on short term time frames.
   Leverage and BTC should be oil and water in the contrast between them, it leads to sharp moves because unlike other commodities BTC does not ever produce more in response to demand so I think we'll always have to be careful on the price cutting both ways.

I had a similar position. Also, the NYAG is overreaching their jurisdiction. I had this opinion from the beginning of the case and discussed this in the press subforum. They are very persistent, however.

Tether on 2016 is not similar to Tether on 2020. In volume, in liquidity, in market capitalization, in dependence from exchanges' orderbooks. This dependence is a problem. Tether might not be backed 100% anymore as speculated by many.

I didn't say Tether. Indeed Tether was still very small in mid-2016 when the Bitfinex hack occurred.

I was talking about Bitfinex. In mid-2016, they were literally the biggest exchange in the world, if you ignore the volume-faking Chinese exchanges:

https://i.imgur.com/iY8adSI.png

https://data.bitcoinity.org/markets/volume/5y?c=e&t=a

Then they were hacked for more than 1/3 of the value they held in custody. This liquidity was immediately taken from depositors and lost on the market. Yet it didn't stop the 2016-2017 bull market, did it?

How is Tether any different now?

I do not know. Maybe the fake volume Chinese exchanges were really behind the pump similar to the argument that the unbacked USDT issuance is presently behind this bull market.

How is Tether different now? Check the cryptospace landscape. It is a Tether world in fiat trading volume and orderbook liquidity. You reckon bull market continues if regulators freeze iFinex, Tether and Bitfinex bank accounts and orders a takedown of USDT?

Always looking for a conspiracy theory, eh? :P

If anything, it's the opposite. Remember when Chinese exchanges got audited by the government and froze customer withdrawals for months, in early 2017? They turned off the fake volume algorithms and shortly afterwards the market went parabolic and entered the bubble phase. This may have been a coincidence though.


Tether is big, but certainly not bigger (compared to the overall market) than Bitfinex was in 2016 when there were far fewer exchanges and the overall crypto market cap was tiny compared to now. It was the single biggest Western exchange at the time.


Yes, I think so. Like I said, there is no stopping a strong bull market. And whether Bitfinex or Tether can pay their creditors really doesn't affect Bitcoin holders; it doesn't necessarily mean they will send their coins to exchanges and dump them. And that's what needs to happen for the price to crash and for the bull market to reverse into a bear.

Furthermore, the market has historically taken favorably to "bad actors" being taken down by the US government. Silk Road, BTC-e, etc. The market bubbled after those events.

You mentioned fake volume Chinese exchanges. If they can fake volume, they control liquidity, they also can control the pumps.

Also, Tether is not 100% backed 1 dollar for 1 USDT anymore.

Tether's total 24 hour volume is sometimes bigger than bitcoin's 24 hour volume, however, always consistent in top 2.

Similar to the big short, it was the overconfidence of the banks that broke them. We should be more careful and stay humble.

I shake my head.

If there were direct dollars willing to provide liquidity for the cryptospace market, why do they need to go first through Tether and add more regulatory risk?

https://i.ibb.co/CssCjkR/AB4-F09-D9-7-CEE-4-EA4-B8-A1-C4-F2-F1198-D1-A.jpg

According to Tether’s official transparency data, the USDT market cap crossed a $17 billion mark for the first time, hitting over $17 billion in total assets.

Tether’s market cap has been growing exponentially in 2020. As of mid-September, Tether’s market cap had seen nearly a four-fold increase since the beginning of the year, surging above $15 billion from around $4 billion.

According to data from crypto analytics firm Messari, USDT saw a notable increase from August 2020 to date. As such, USDT added more than $5 billion in market cap over the past three months.

Tether (USDT), the largest stablecoin in the cryptocurrency market, is seeing a massive influx in its market capitalization, which is likely fueling the current Bitcoin (BTC) price rally.

Source https://cointelegraph.com/news/tether-market-cap-surpasses-17b-fueling-bitcoin-price-rally

Well because USDT is a crypto of course, you can send and receive it instantly, from and to accounts with little/no regulatory oversight, it's much less hassle and risk than moving USD.

What would be really interesting to know is who is buying USDT directly from Tether in exchange of cash, to the tune of billions ?

@aesma. I reckon the invisible men hehehehe.

In any case, news reminder. Tether, iFinex, Digifinex, Bitfinex are now in a very difficult situation. The New York supreme court has rejected their motion to dismiss the case and they need to supply the documents, bank records and accounting for Tether's issuance. Records Tether cannot or will not produce.

This supreme court decision to put them back on trial was made on July. I am not certain why there is no bitcoin news media outlet covering this.



The judges lay out initially that this appeal was absolutely meaningless from the start, and nonetheless take the time to lay out why each of Bitfinex’s arguments are invalid.

They begin (as shall I) with Tether’s argument that it is neither a security or a commodity and as such these activities surrounding Tether are not covered under the Martin Act. The judge strongly disagrees.

The first point laid out here is explaining that Bitfinex did not appeal correctly to challenge the NYAG jurisdiction, and instead in effect were trying to appeal the right of the Supreme Court to hear an application for this type of order.

The second point follows along with this one to emphasize that they did not appeal the order they appear to have a problem with.

The third point, is laying out even if they had handled this appeal correctly Tether would still be found to be covered under the Martin Act.

After settling the issue of whether Tether was neither a commodity a security they addressed the argument by Bitfinex that the New York Supreme Court lacked personal jurisdiction. In this argument Bitfinex tried to claim that there was insufficient link between their activity in New York and the alleged fraud. The judge did not find this argument convincing at all.

In conclusion, this case has been moved from the appellate court back to trial, Bitfinex and Tether must hand over the documents requested, and they are now in an extraordinarily difficult position.

Source https://bennettftomlin.com/2020/12/06/analysis-of-the-new-york-supreme-court-remittitur-in-the-tether-and-bitfinex-new-york-attorney-general-case/

Timing their downfall is impossible, so you just don't care? Why would you hold something that eventually will go down in value (even moreso than the dollar itself) when it can never go up, especially when reliable stablecoin alternatives exist?

Uh, it's not that I don't care, just that speculating about this is a complete waste of time. Tether alarmists have been freaking out for 4+ years saying the sky is going to fall tomorrow.

I'm sure it will someday. I'm over it.


I don't advocate holding Tether.

@exstasie. I disagree. Speculating about this is learning about the economics behind the cryptospace and we might have only begun to know the real story, I reckon.

Also, the movie that can be made based on the real story behind this might put the movies The Big Short and Wolf of Wall Street on a lower level hehe. Read this article. Everything appears to be planned from the very beginning.



Tether and Bitfinex are not the same corporation. Tether controls the issuance contracts for all USDT in circulation on all blockchains, but Bitfinex manages the backing assets.

If Tether dies, the keys are passed on to another LLC and life goes on.
If Bitfinex dies, Binance can then make a deal with Tether to back the network with their own basket.
If Binance dies, Bittrex can then replace them.
If Bittrex dies, OKCoin can then replace them.

So while it’s obvious the market continues to shrink and must deal with the inevitable turmoil all of those exchange closings would create… USDT very well has every chance of outliving all of them.

That’s it. Tether wins.

Source https://bryceweiner.medium.com/hopes-expectations-black-holes-and-revelations-or-how-i-learned-to-stop-worrying-and-love-7747cf8ea11c

What made me think is Tether being Stable coin , why does the value in market falls?sometimes the value even drop to $0.98 in which supposedly $1.00 .sorry but i'm ust curious why does the drop happens as being stable is the most feature of USDT.

Thank you in advance for enlightenment coz at some point i wanted my coins to transfer into this for keep safe but this hindered me to do so,that's why i wanted to know what's behind this and if this is good or bad .

Good thread. I guess wilful ignorance of what's going on at Tether to be expected when it's pumping your bags ;p

What's surprising is that also appears to make people blind to the fact that if Tether goes down everything goes down with it - I don't think people have considered how inextricably linked BTC is to it. Most of the BTC volume is in tether. Most people won't be able to exit.

Curiously this could have the affect of causing a BTC spike, if USDT becomes a hot potato, then people will want to exit to BTC at any price. We saw the same thing with GOX when USD withdrawals started to fail - this started around November 2013, BTC withdrawals were still processing so people with USD stuck in Gox would buy BTC forcing the price to run up even further. Take the mid point of nov as an example price was ~$500 this more than doubled in the following two weeks.

Of course eventually BTC withdrawals stopped eventually too, and we all saw what happened next - people ultimately prefer dollars they can't withdraw over bitcoin they cant withdraw and so the USD/BTC price on Gox took a walloping. (some plucky soul recognised the steep discount to fair value of assets even after a write down, and wired money to Gox to take advantage!... oh how they were mocked! Good thing that "what randos OTI think" isn't important to me ;) )

But yeah, that FBI page... its coming, 4 years is nothing! I've been waiting 10 years for Bitcoin to deliver the utility it promised... starting too look good now with BSV! I reckon its no seat to wait another 10 to see it fully take off.

How are we learning anything by speculating without the facts?

People wire fiat to exchanges, buy BTC, price goes up. People wire fiat to Tether, they send it to exchanges and buy BTC, price goes up. In that sense, Tether should have an effect on the market (like any other notable exchange) if it's used at any real volume. That's about all we know.

I don't see the value in all the FUD. Plenty of exchanges could be issuing unbacked assets, running fractional reserve, etc. But until shit actually hits the fan and withdrawals are cut off, there isn't much to know or do, except to minimize our own exposure to third party risk.

@exstasie. However, where is the FUD? It is Bitfinex, Tether and iFinex's business activites that are questionable. No one is conjuring stories based in lies and nothing. They are based on the acts of people behind Tether itself.

This article might provide more knowledge for you.



Bitfinex is one of the historically largest Bitcoin exchanges and Tether is by far the largest stablecoin. Each potentially has significant influence over the industry on their own, and their interconnectedness makes this more of a concern. However, since both were founded years ago and many of the events have happened and been in revealed in bits and spurts it can be difficult to understand their place in the cryptocurrency environment. This will hopefully serve as a basic introductory document that will then prompt further research.

Source https://bennettftomlin.com/2020/12/08/an-introduction-to-the-tether-bitfinex-controversy/

What can you expect, if it will continue to pump and will not dump, it's not a bitcoin market anymore, it's not its usual, so we should be aware with that. This is not a big short movie because bitcoin does not end, or will not end, it might have a dump moment but the price in overall are growing, which makes it a solid investment.

That entirely depends on our individual treatment on bitcoin.

It's one thing to say their business practices are questionable. It's another thing to spread FUD about them collapsing. See the difference?

In 2016-2017, I was very fearful Bitfinex would be taken down by American law enforcement. That fear didn't serve me any good. It kept me bearish when there was a bull market erupting. Anyone listening to Bitfinex'd and his constant barrage of FUD during the last bubble surely lost coins (or never bought in). That's all empty FUD does. It separates people from their coins.

I've spent the last 5 years being inundated by Tether/Bitfinex FUD that has never played out. Yes, they will probably eventually collapse, but this is no different than the Bitcoin bear who constantly calls the top during a multi-year bull market. Even a broken clock is eventually right.

@exstasie. Did you read the article? I would argue that it is not FUD because it is not based on lying. It was only a speculation that it might cause a big short similar to the 2007 financial crisis because there are people behind this economy who do very questionable things to pump the market. See the difference? This story behind Tether might become a movie of one of the greatest financial schemes in history.

I read the article and found the claim that tether is the largest of the stable coins along with it being About 20 billion in value as fairly reassuring.

what do we have three or four major stable coins

biggest is 20 billion so

pretend
20
19
18
17
74 billion for all stable coins.

and btc is worth 23k x 18.5 = over 400 billion

so if tether at 20 billion fully truly crashes and burns 🥵

then other top stables coins could grow along with btc.
you could simply have value shift from tether to the other coins.

I think if two or three stable coins all fail in a few weeks we would have an issue.
but everyone has been talking bad about tether a long time. so it think the fear if realized may just make a it is about time.

You don't seem to understand what FUD (fear, uncertainty, and doubt) is.

I'm not arguing the facts, like whether Tether commingled funds or doesn't have 100% backing, etc. Facts are not FUD.

For you to take the very limited facts we have (basically, the ones laid out in that article) and speculate that Tether is about to collapse, that is FUD. You're just speculating without strong basis and spreading fear. That's the kind of empty speculation I don't like to participate in.

It's perfectly reasonable to say Tether is risky and shady, and that one shouldn't hold USDT. I would leave it at that instead of beating a dead horse with this "Tether is going to collapse tomorrow" shit.

Beginning on 2005, Dr. Michael Burry saw the shadiness of the banks in the housing market. No one saw and everyone refused to see what he has seen when he began his big short move. If he went to forums and told everyone about this, would it be FUD based only on speculation also?

Even Dr. Burry would not claim to be the only one who saw that, I can remember seeing a TV program on fraud in the mortgage industry at the time.    The punch line is no one really gave a dam because it was profitable and so long as prices rose why complain and ruin a good thing.    I did think something would result but I took no action, I read in the Economist a full explanation of Exters triangle and how deleveraging would topple an economy from this constant knock on effect and natural tightening of the overly loose money lending; that article was was early 2008 again its a bit over my head and hard for me to know if it was correct so I only recognised later it was on point.
   We will have a fallout bigger then 2008 because the debt situation overall is broken but its sovereign debt not companies so its hard to call but also obvious and my point back in 2005 people knew like they know now its going to fail in some way.
   The tie into crypto is somehow that even with flaws its represents a better standard which is remarkable because I agree Bitcoin isnt perfect by far, its very frothy and prone to harsh pull backs; rising like this in such a brief time period represents volatility and unstable pricing represents some discouragement to business.    Im not sure tether is going to fall over amidst FIAT being such a loose standard currently.

Maybe. I don't know anything about him or what he said at the time.

Fundamentally, FUD is about fearmongering about the unknown. It doesn't necessarily mean such speculation has no basis, or that FUD'rs must be wrong at the end of the day.

I'm pretty sure I said earlier that I believe Tether will go down someday, likely from law enforcement seizures. It's not the notion of this that bothers me. It's the speculation that it's inevitable and coming soon that bothers me.

Bitfinex and Tether have always impressed me with their ability to dodge every bullet that comes their way. I don't like to bet against them anymore.

What Michael Burry said on 2005 is that the derivatives the were rated AAA and BBB by the corrupt rating agencies were made up of bad mortgages and the bubble would pop. Is this FUD if it is based on facts?

The definition of FUD that you are using might be wrong. FUD is based on propaganda and lies to achieve its purpose.

In any case, the mainstream media is beginning to speculate on it also. There might be a situation where this issue will be unavoidable.



Bitcoin hit an all-time high today at $20,000 and “hodlers” have been rejoicing. However the upswing this year leaves consistent questions about the issuance of Tether, the stablecoin (USDT) that seemingly has a limitless ability to print money. The flow of Tether into Bitcoin generally correlates to the rise in price particularly over the past year - whenever Bitcoin seems to fall, a load of new Tethers are created (often over $50m at a time) and buys BTC, taking the price of BTC back up.

This staggering increase of over $4b of new Tethers implies that someone paid $4b into Tether to purchase Bitcoin in just the past three months. Tether has a somewhat of a checkered past with its policy not to publish any kinds of audits nor show proof of funds. Whether or not they are the recipient of $4b of cash is not known but it raises questions especially when Tether is created over the weekends and other times when other markets wouldn’t normally trade.

So if you’re a Bitcoin believer, just follow the Tether printer and watch the printing. But if they stop printing be wary of the downside if there isn’t that injection of USDT coming so regularly. We may see more on January 21 when the NY Attorney General’s deadline for information from them.

Source https://www.forbes.com/sites/robkniaz/2020/12/16/the-problem-with-bitcoin-at-20000/?sh=5a52743024a0

It has not even reached the July 2019 price of 13k  which would be around 30k.

I say we drift around until we hit 30k then we tank.

At bbc reporter 20 billion is nothing compared to 400 billion.

If tether went belly up it would not be enough to tank the btc market.

it may get a few people jailed.

Most likely BTC would take off  rather than tank.

All the other stable coins would need to fold.

I simply don't see the issue you see when I read that article.

Again, it's not about the existence of facts. It's about the intention of instilling fear, uncertainty, and doubt in the target audience. The point of FUD is to elicit emotional reactions and negative sentiment.

I can't speak to Michael Burry and I don't care for the comparison. I've directly explained the difference with regard to Tether, and I'll do it again: Tether has engaged in questionable business practices and is under threat of regulatory action. That's a reasonable take.

Beating a dead horse about how Tether is about to collapse is, on the other hand, FUD.


This is how people use the term today, and specifically in the crypto space:


https://academy.binance.com/en/glossary/fear-uncertainty-and-doubt

The whole premise of this thread ("Tether is going to collapse and it's going to crash the BTC market") is to spread FUD.....

many traders choose Long in the current situation,
because this season is a bullish season for bitcoin and crypto currencies,
indeed many altcoins are still cheap, because the altcoin season has not started yet,
therefore now is not the time to see a short movie on bitcoin my friends.

@philipma1957. I disagree. According to www.cryptocompare.com, Tether is 50% of the volume of the whole cryptospace, I speculate that if they were shutdown by the regulators, it will remove much of the liquidity of the many of the exchanges which also many of them are unbanked and depend on USDT's liquidity. It might cause panic buying of bitcoins and other cryptocoins to withdraw from exchanges, however, it might also cause exchanges to stop trades and freeze withdrawals. If we are successful in buying and withdrawing their coins, we might have a dry market in need of liquidity.

Also, what might happen after? In the big short, the government bailed out the banks by pumping money to the economy. I reckon the government will not bail out the cryptospace in case of our liquidity crisis. I reckon these are questions that should be with us to plant our feet on the ground.




@exstasie. The questions will never be gone until Tether, iFinex shows the documents and the audits.

Also, this is the definition of FUD.


FUD is generally a strategy to influence perception by disseminating negative and dubious or false information and a manifestation of the appeal to fear.

Source https://en.m.wikipedia.org/wiki/Fear,_uncertainty,_and_doubt

Not going to happen. Their general counsel came out and said as much a few years ago:


https://www.coindesk.com/tether-review-claims-crypto-asset-fully-backed-theres-catch


Yeah, that's the original definition. I explained how the term FUD is conventionally used today in the trading and cryptocurrency worlds, and provided a relevant source. Remember, you're on the Bitcointalk Speculation forum, and the year is 2020. ;)

Also, it wouldn't be unreasonable to say this type of speculation about Tether fits that original definition anyway. We're talking about disseminating negative information (whether it's dubious is debatable) and fearmongering.

there will be a decline if the hype has ended, but so far if I see, the bitcon hype is still not over,
If you expect the big short to happen you will miss the bullish train.

How will the judge determine this case if they will never show documents and audits to remove th doubts behind the backing USDT? Do you assume the investigations will stop?

You are using the word FUD according to your own definition everytime someone asks questions? Are we not allowed to have the right to express our own doubts, ask questions and speculate without being called FUD? You agreed that Tether is shady.

In any case, another speculation for you. This statement from the SEC is very broad and might also cover Tether and many other tokens in the cryptospace.

https://i.ibb.co/Vqpk9Md/C06863-D4-882-E-4922-90-CC-FF3-CE3-CE466.jpg

Source https://www.sec.gov/litigation/complaints/2020/comp-pr2020-338.pdf

No, the New York prosecutor seems pretty adamant about nailing Tether. I just don't think they have much actual power to do anything, enforcement wise. I wonder if what's really happening is that New York is being used as a pawn by federal prosecutors in an effort to get Tether and Bitfinex to voluntarily incriminate themselves, in a larger federal case. I really don't know though. I don't know how this is all going to turn out.


No, I provided sources and explained in detail how beating a dead horse about Tether's imminent collapse is FUD. I also explained how it fits your definition of FUD.


All that means is XRP isn't legal tender. The same applies to BTC too. Doesn't make BTC a security, or USDT.

The SEC doesn't seem that interested in stablecoins. They did make these comments earlier this year, (https://www.sec.gov/news/public-statement/sec-finhub-statement-occ-interpretation) and said in vague terms that stablecoins may or may not be securities, depending on the facts. An SEC advisor recently speculated that stablecoins with fiat-backed reserves probably don't violate securities laws. (https://tokenist.com/senior-advisor-for-sec-some-stablecoins-violate-securities-laws/) Supposedly the ones that may are those where a central authority controls price variations. DAI actually comes to mind because it uses a system where a relatively centralized authority increases or decreased CDP interest rates to drive the market towards $1. Ripple comes to mind too the way Ripple Labs has withheld supply and used things like supply lock-ups to manipulate price.

What if there's none already and anytime soon bitcoin will start to dump like a falling knife? The big short movie was all about the bubble, I'm not sure if what we are seeing is the same because AFAIK, bitcoin could dump but it's normal as it's a high volatile asset compared to the housing bubble in the movie the big short.

Similar to Enron and Theranos, the American government will enforce their authority. The government might not takedown Tether worldwide, however, within American borders it will be enforceable. That would be the best outcome for the cryptospace, I reckon.

It is not my definition of FUD. It is the real definition. I also did not mention imminent collapse. I was only speculating that it might be the cause of a big short BTC edition.

The wording is broad from the SEC. This should be concerning because it can be used to charge many cryptocoins if the judge determines unfavorably for XRP.

Operation stop big short? This might be the beginning of a transformation in the stablecoin market from a USDT influenced market to USDC, GUSD and others that might be more favored by regulators.

Also, it mentions that the document can be interpreted that public blockchains can be treated as infrastructure similar to Swift, ACH ad Fedwire.

This is good news except for Tether and Ripple because the SEC has pending charges against them. The skeptical me thinks that there might be a conspiracy where there are movers behind this that favor USDC and Stellar. Am I watching too much movies again hehehe?



Breaking major news from US Treasury OCC, the largest US banking regulator (@USOCC), with new guidance allowing US banks to use public blockchains and dollar stablecoins as a settlement infrastructure in the US financial system.

The new interpretive letter establishes that banks can treat public chains as infrastructure similar to SWIFT, ACH and FedWire, and stablecoins like USDC as electronic stored value.  The significance of this can’t be understated.

Source https://twitter.com/jerallaire/status/1346233132396257282?s=12

https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-2a.pdf

There is a big dump on the whole cryptospace market and this is breaking all price support. Might this be because of iFinex, Bitfinex and Tether’s deadline of submission of financial documents on January 15?

There are people who like to spread FUD that January 15 is the judgement day if Tether is taken down or not. This is FUD. It is only a day of submitting documents and I speculate that Tether will submit a big data dump of millions of blockchain transactions to stall the investigation hehehehe.

ok, agreed...
but we will also try not to be too us-centered..

What has changed? I also noticed that no one from bitcoin news media have been covering much of Tether indepth. Some bitcoin influencers also appear to have changed their statements on Tether. They might be having a difficult time to call out Tether’s shadiness because they know bitcoin might not pump without it.

https://i.ibb.co/V2SH97x/C091-CEAC-0-EC6-4-CED-B829-1-A78-DF38325-B.jpg

https://i.ibb.co/1vwCZ56/0-EFC3011-E120-4-FBC-8-C5-A-FA680-E4-D5178.jpg

This is the dumb tether article.

https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3

News update.

Bitfinex, iFinex, Tether has settled with the New York Attorney General’s office with the amount of $18.5 million, an agreement to submit quarterly reports of their operation and leave the state of New York. I am skeptical how the NYAG can enforce the submission of quarterly reports. This is out of their jurisdiction.

This is only a slap on the wrist for Tether and it also implies that the NYAG surrendered. However, without audits, the questions remain.



The company behind both Bitfinex exchange and the stablecoin Tether, iFinex, has ended its nearly two-year battle with New York State.

Attorney General Letitia James announced Tuesday morning that Tether and Bitfinex will pay $18.5 million in fines and be required to submit quarterly reports about the state of their operation. They also must stop doing business with “any New York persons or entities”—that’s anyone who regularly trades in New York, and any company that’s headquartered or incorporated in New York.

Source https://decrypt.co/58793/tether-bitfinex-settlement-takeaways

It appears that mainstream media is beginning to create a new series of storylines for their next bitcoin fud after China’s stricter policies on mining and trading. I am saying FUD because nothing has occurred for the time being.


According to experts, the SEC case against XRP is just the beginning and Tether and Binance Coin could be the next prosecuted. The allegations are from US Attorney Jeremy Hogan. According to him, stablecoin Tether could be the regulator’s new target for misleading the market about the USDT’s backing.

Source https://digesttime.com/2021/06/21/according-to-attorney-sec-will-sue-tether-and-binance-coin/



This is an interview from CNBC’s Techcheck show.



"There's a reason why they're un-bankable, there's a reason why they've been forced to give these quarterly statements...this is not the transparency people are looking for," says tech investor
@Jason on Tether

Source https://mobile.twitter.com/CNBCTechCheck/status/1406997666828099584



Can the SEC or the NYAG force iFinex, Digifinex, Bitfinex, Tether to show them those commercial papers that are supposed to back USDT?

Everyone in the cryptospace should read this long article. Some written in there are information we have already known about and the others we have already argued on. However, this is mainstream news media with mainstream news readers. There will be questions.

What if Tether depends on the bull market to sustain the peg?



After I returned to the U.S., I obtained a document showing a detailed account of Tether Holdings’ reserves. It said they include billions of dollars of short-term loans to large Chinese companies—something money-market funds avoid. And that was before one of the country’s largest property developers, China Evergrande Group, started to collapse. I also learned that Tether had lent billions of dollars more to other crypto companies, with Bitcoin as collateral. One of them is Celsius Network Ltd., a giant quasi-bank for cryptocurrency investors, its founder Alex Mashinsky told me. He said he pays an interest rate of 5% to 6% on $1 billion in loans from Tether. Tether has denied holding any Evergrande debt, but Hoegner, Tether’s lawyer, declined to say whether Tether had other Chinese commercial paper. He said the vast majority of its commercial paper has high grades from credit ratings firms, and that its secured loans are low-risk, because borrowers have to put up Bitcoin that’s worth more than what they borrow. “All Tether tokens are fully backed,” he said.

Source https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether

It has been fully known that people never cared about tether at all, it wasn't the tether "company" people cared about, but there are nearly 70 billion dollars worth tether printed out and sold to market, whoever is willing to buy it has got it, and yes they still take it back whenever needed to keep the peg, but that rarely ever happens, they have enough to cover any difference in cash but do you really believe they have 70 billion dollars in cash?

It was never 1 to 1 pegged and we all knew it but there isn't much we can do about it. As long as people have the power to do this, which tether had thanks to bitfinex, then we can't stop them from doing it. Tether is a horrible company, and even though idea about stablecoins is great, it was never great when it was centralized.

It appears that Tether has found another type of usage in its attempt to hyperdollarize the world without owning the official money printer from the Federal Reserve hehehe. This new usage is to be a medium of exchange to fund revolutions in 3rd world countries.

I speculate that Tether might not be allowed to exist within 3 years to stop it from being adopted by powerful figures who can disrupt the existing state of politics.



Myanmar shadow government declares stablecoin USDT an official currency

Myanmar’s shadow government, the National Unity Government (NUG), led by the supporters of jailed leader Aung San Suu Kyi, has declared United States dollar-based stablecoin Tether (USDT) as an official currency for local use.

Per a report published in Bloomberg, the NUG will accept Tether for its ongoing fundraising campaign seeking to topple the current military regime in Myanmar. The shadow government also raised $9.5 million through the sale of “Spring Revolution Special Treasury Bonds” offered to the Myanmar diaspora across the world. The group aims to raise $1 billion through the sale of NUG-issued bonds.

Source https://cointelegraph.com/news/myanmar-shadow-government-declares-stablecoin-usdt-an-official-currency

It appears that I have to begin to accept that Tether will not be taken down hehehe. Tether is being used to collect money to fund a revolution and restore democracy. Might this also be the beginning to hyperdollarize the country of Myanmar if the revolutionaries are successful? No one would have predicted that Tether would find a use case like this.



Political and financial scenarios in regions across the globe have inspired populations to find more stable and secure currencies to hold, leading many to Tether. Pegged to the US dollar, Tether represents a safe and assured way to hold USD on the blockchain while also offering a reliable option for economies combatting inflation, anti-privacy laws, and more.

The National Unity Government of the Republic (NUG) is led by Nobel Peace Prize winner Aung San Suu Kyi, who has received commendations from the US. The party has also been acknowledged by the European Union. The fact that it has chosen to recognize USDT as an official currency is a commendation to the strength of the US dollar and its ability to provide a safe haven to citizens of the world. The significance of this moment goes far beyond the potentials of cryptocurrency to provide financial security but points to long-standing confidence in the US dollar for those who do not have confidence in their own governments or national currencies.

Source https://tether.to/tether-responds-to-myanmar-adoption-of-usdt-as-official-currency/

After the failure of Terra, Luna and UST, it appears that some attention is again going back to Tether and USDT. The questions about the solvency of Tether will never stop until they go through an audit. If anyone really needs to hold a stablecoin, USDC might presently be the safest.



Tether, the $74 billion stablecoin issued by Tether Holdings Limited, has faced increased scrutiny since the collpase of agorithmic stablecoin terrUSD that partly triggered a $1 trillion bitcoin, ethereum and crypto crash (with more pain thought to be on the way).

Now, a Barclays strategist has warned tether, which claims it has adequate reserves of U.S. dollars and dollar-equivalent assets to maintain its one-to-one dollar peg, could be hit by a price spiral if holders rush to sell it "quickly before its price falls even further."

Source https://www.forbes.com/sites/billybambrough/2022/05/19/sudden-price-spiral-warning-issued-over-major-stablecoin-as-bitcoin-and-ethereum-bounce-from-crypto-crash-lows/


Also, small amounts of Tethers being redeemed will be okay, however, redeeming it by the billions might become a problem because of the question on Tether's solvency. Institutional investors and whales might have begun redeeming their Tethers for dollars already. The marketcap is now less by around $9 billion which occurred only in the month of May.

https://i.ibb.co/DQv4hm8/4-B5-D0-D8-D-79-FC-4347-ABBF-E9-BB461-D761-A.jpg

In my experience the market will test all boundaries, it will smash against fixed objects like waves on rocks and eventually it can wear anything down, that much is giving too much credit to Tether or anything else.   It'll have its limits for whatever reasons markets have a destructive side to them, crypto has main market money involvement so we have all kinds of operators not just the original people from crypto who were happy to run a machine at a loss if need be.
  The whole idea of stability coins has always appeared a castle in the sky to me but I dont know the minute details that might allow it to survive, if it can adjust itself let off pressure perhaps it continues.   I'd rather it decline in a gradual way then just pop one day, I've never used it so why should it be my problem.

@STT. The problem with Tether, USDT is it is not backed 100% by real American dollars. Much of the USDT issued and presently in circulation is backed by commercial paper. I know there can be an argument that this type of backing is okay, however, Tether is not audited and we cannot be certain if those commercial papers will be good on their promise to pay.

Commercial papers are promissory notes that are issued by companies or banks and they are commonly unsecured loans without collateral.

Sure that makes sense as it will be far more profitable for them but obviously introduces risk.   Whose to say if the risk taken is too great vs the liquidity required.   Bonds are a future payment of dollars so its not like its wrong exactly but in some cases the bonds wont pay out is possible.   If thats all the problem Tether has I dont think its in trouble just yet presuming they werent too leveraged.

Big Short was one of my fav movies because it manages to convey some things which are quite technical, seems like a good thing because I do think that process is ongoing and will effect everyone regardless.    The problem should be in the end not a shortage of dollars, default or recession but an excess which I would presume Tether could handle if it was not all at once.

  Maybe this relates to QE and that giant issuance of bonds but I dont fear anything like a Volker 1980's moment occurring, they wont do it because they cannot do it.   The fear will be of hard money occurring, greatly reducing the value of their paper debt especially as rates rise.   The FED cannot raise rates to anything like those higher levels, someone will have studied this alot better then me but they cant even go back to 5% as it will consume a large part of the budget and inflation is past that right now.   Rates cant really raise until a fiscal surplus occurs and bonds are being closed out, a deficit is still there so it does imply a constant stream of new easy money to service that gap in payments.   

We are not talking about what makes sense for them. We are talking about which companies have issued those commerial papers and why would Tether, iFinex not want an audit on those commercial papers? It is already being speculated that those commercial papers are from troubled Chinese real estate developers like Ever Grande. If this is true and correct then USDT has already fractionalized and might not have enough dollar backing to redeem all USDT in circulation.

First the regulators block them then they control them. Similar to what I have been telling everyone, the regulators will use the stablecoin issuers to control the cashflow and liquidity of what and how much goes in and goes out of the whole cryptospace market. I am not antagonizing everyone. I reckon if America also creates the same legislation and implements this with the European Union, I speculate the next bull market might not be as strong as the crypto bull markets we have witnessed during 2017 and 2020.



Dollar-pegged stablecoins might be blocked in the European Union’s 27 countries if the bloc’s new Markets in Crypto-Assets (MiCA) legislation enters into force in its current form.

The European Union’s landmark crypto law has already been approved but technicalities still have to be ironed out.

Blockchain for Europe and the Digital Euro Association this weekend sent a letter to the EU Council, a collegiate body formed by EU member states, in a bid to reverse controversial rules which would effectively quash any large stablecoin projects tied to anything but the euro.

The crypto industry says MiCA imposes restrictions on the issuance and use of stablecoins which aren’t denominated in euros or other official currency of an EU Member State.

This would possibly ban Tether’s USDT, Circle’s USD coin and Binance’s binance USD, which account for an enormous chunk of crypto trade volumes globally.

Source https://blockworks.co/eu-crypto-lobby-fights-mica-limits-on-us-dollar-stablecoins/

I would actually be an investor on the production on such a movie. Bitcoin is now so mainstream, and crypto in general, that it would be a guaranteed success. Michael Burry is now like a celebrity, at least in the investment world. While it would be a bit of a niche movie, there is an audience big enough that it would be profitable, and you don't need an huge budget for this since it wouldn't be some complex to shoot hollywood blockbuster.

I do think eventually Tether will go bust and someone will do a documentary on it. It would be the best buy the dip opportunity most people will ever get to see.

probably not a good idea; in this case, stablecoins independent of fiat standards will appear. This would allow limited number of coins, rarity effect and FOMO.

after all, it was a basic idea for crypto innovation.

the genius has definitely escaped the bottle.

@estenity. It would not be a good idea for who? The regulators or the investors in the cryptospace? It is certainly very clear that in this bear market more strict regulations on stablecoins are coming and this might affect the stength and how powerful the next bull market will be. However, I speculate the stablecoin issuers might also fractionalize and print more out of thin air hehehehe.

regulators must do their task, they are paid for that;
what i mean is that from their decisions the notion of stablecoins will probably change, it was a misconception from the beginning to mimick fiat systems.

today is the weekend, of course a big short could happen,
moreover the price of bitcoin is still at $20k meaning if it breaks at $20k the price of bitcoin will drop to $18k,
yes its a big SHORT time!

The alarm has gone off, will Bitcoin really fall at the end of this month? and Big short? or Short Squeze?,
I'm still monitoring it myself and haven't bought it yet, because the increased volatility makes me confused.

What we have been speculating is beginning. A strictly regulated stablecoin market might give the regulators the power on how much goes in the cryptospace. If cashflow going in is short, there will not be enough liquidity, not enough expansion. It appears we also need to bring back the state of the cryptospace as it was before 2017 when much of the most lquid markets were traded and valued in bitcoin.



Draft legislation to create a U.S. federal framework around stablecoins would temporarily ban the types of payment coins that are not backed by outside assets — similar to TerraUSD, an algorithmic stablecoin that collapsed earlier this year.

 Nonbank issuers of stablecoins backed by fiat currency would also be overseen by state banking regulators and the Federal Reserve, according to a source familiar with discussions and draft text obtained by The Block.

Banks or credit unions could issue their own stablecoins, which would be overseen by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., both of which serve as federal bank regulators in the United States.

Source https://www.theblock.co/post/171565/draft-stablecoin-bill-in-congress-to-require-fed-state-regulator-approval

News update on Tether.

It appears a judge has ordered Tether to prove the backing of USDT. I am not certain how they are going to prove this because as we have speculated before, Tether has fractionalized already. This might have begun during 2019 when Tether's market capitalization started increasing with a higher rate.



Despite entailing the title of the “world’s largest stablecoin” Tether [USDT] continues to drown in troubled waters. The network was slapped with a lawsuit for issuing USDT in order to pump the price of Bitcoin BTC. This market manipulation lawsuit has been going on for quite some time now and has taken another turn. This time, it wasn’t in favor of the stablecoin.

It was brought to light that a U.S. Judge in New York dismissed Tether’s motion that blocked the release of its financial records. Therefore, the network now has to produce an array of documents pertaining to the backing of USDT. This list includes, “general ledgers, balance sheets, income statements, cash-flow statements, and profit and loss statements.” In addition to this, the stablecoin firm has to present records of any transfers of crypto or other stablecoins. Minor details like the time of the transaction were also demanded.

Source https://watcher.guru/news/tether-legal-woes-prolong-financial-records-demanded

This is very head scratching. It has always been speculated that Tether might be the stablecoin that might fail and bring the big short to the cryptospace, however, it is beginning to appear that USDC might be the one hehehe.

The peg went below $0.90 but it is returning back to $0.95. We cannot be quite certain if this is the end of the show, however.

https://i.ibb.co/j5PTDpn/96660-A27-FE06-47-FA-B28-E-E6369-BADF893.jpg

Crypto investors have flocked to redeem their USD Coin (USDC) holdings after its issuer Circle revealed it held $3.3 billion of its reserves at the failed Silicon Valley Bank (SVB).

Concerns about USDC’s reserves emerged after U.S. regulators took control of the bank. The stablecoin issuer confirmed it had exposure to the institution, leading to massive withdrawals from the platform.

Meanwhile, the concerns about the stablecoin reserves have seen it depeg against its rivals. BeInCrypto data showed that the stablecoin tanked 10% following the news to $0.90 as of press time.

Top crypto exchanges Binance and Coinbase said they would suspend USDC’s conversion, citing “market conditions.” Binance said the move was a “normal risk-management procedural step to take.” Coinbase also suspended the stablecoin’s conversion over the weekend. The U.S.-based exchange plans to recommence the conversion on Monday when banks open.

Source https://beincrypto.com/usdc-market-cap-6b-circle-exposure-silicon-valley-bank/



Also, there are reports that there are billions of venture capital funds that cannot be withdrawn from Silicon Valley bank because of the bank run. The crypto related funds are owned by a16z cryptoventures, Pantera and Paradigm. They have invested billions in different projects in the cryptospace.

https://i.ibb.co/pXJPKCs/07-B17-D3-C-DB0-A-4525-8-ED1-A52274-FFA702.png

Source https://mobile.twitter.com/wublockchain/status/1634473009061953536

Is this part of Operation Chokepoint 2.0?

It appears that the speculation on stablecoins being deputized to be the gateways for inflows and outflows of fiat for the cryptospace might become true. A draft for a bill on stablecoin legislation has been created in United States congress.

DeFi and open finance stablecoins will become illegal, however, licensed stablecoins similar to USDC will be permitted and might also have the support of the government on liquidity.

https://i.ibb.co/pJ8DDgw/A09178-A1-38-C1-4-DC8-84-B7-FE076-EF9-DE64.jpg

A BILL

To provide requirements for payment stablecoin issuers, research on a digital dollar, and for other purposes.

Source https://docs.house.gov/meetings/BA/BA21/20230419/115753/BILLS-118pih-Toproviderequirementsforpaymentstablecoinissuersresearchonadigitaldollarandforotherpurposes.pdf

News update. It appears Tether might be the safest and the most stable of stablecoins hehehe. According to their latest attestation, they are earning yield on their assets which are backed by bonds, precious metals and bitcoin.

Also, there are bitcoin maximalists who have presently become supporters of Tether? There are images of Samsung Mow wearing a shirt with a Tether logo.

https://i.ibb.co/GQYCF5X/D8-AC1-D46-1-AC6-4960-8849-A33030-F9-E3-F0.jpg

Today, Tether Holdings Limited published its assurance opinion for Q1 of 2023 completed by BDO Italia, a top five-ranked global independent public accounting firm. The attestation re-affirms the accuracy of Tether’s Consolidated Reserves Report (CRR), which breaks down the assets held by the group as of March 31, 2023. The CRR provides for the first time, additional categories with the aim of increasing transparency into Tether’s reserves reporting. Physical gold, Overnight Repo, Corporate Bonds and Bitcoin ownership have been reported separately. It reveals an increase in Tether's excess of reserves reaching an all-time high of $2.44B up $1.48B for the first quarter of 2023.

Another excellent quarter for Tether under several aspects: $1.48B of net profit strengthening Tether’s reserves and an increase in the token in circulation of 20% which is a clear indicator of the trust of Tether’s customers which allows Tether to be very optimistic for the future.

Tether closed the first quarter 2023 with $81.8B in consolidated total assets. The majority of its reserves are invested in US Treasury Bills. It has also been working to take steps to reduce its reliance on pure bank deposits as a source of liquidity and instead leverage the Repo market as an additional measure to ensure higher standards of protection for its users by maintaining the required liquidity.

Source https://tether.to/en/tethers-latest-q1-2023-assurance-report-shows-reserves-surplus-at-all-time-high-of-244b-up-148b-in-net-profit-new-categories-for-additional-transparency-reveals-bitcoin-and-gold-allocations/

News update.

Very much similar to what I have said before, the American government will make stablecoin issuers of their choosing as the gateways of liquidity and inflows and outflows of fiat in and out of the cryptospace. The regulatory framework for this might be available and ready on the president's desk on 2024 before the election.

https://i.ibb.co/Kj8c3V5/0-AA4-DB59-78-FB-466-E-B258-9560-FB77-BC1-A.png

Senior members of the House of Representatives suggested that a deal to create a comprehensive framework in the U.S. around stablecoins could be close.

And late on Wednesday the House Financial Services Committee advanced legislation to significantly alter the U.S. regulatory approach to crypto markets by a bipartisan vote, 35-15. The bill drew staunch opposition from several senior Democrats on the panel, but Republicans were joined by six Democrats report the bill out favorably, a procedural step towards consideration before while House of Representatives.

Waters and House Financial Services Committee Chair Patrick McHenry, R-N.C., were optimistic that ongoing last-minute negotiations could yield more agreement on stablecoins legislation paired with the market bill and due up for a similar committee vote on Thursday.

Source https://www.theblock.co/post/241508/democrats-oppose-crypto-market-overhaul-but-stablecoin-deal-possible

I have been bullish on the cryptospace recently, however, there is a rumor that CZ and Tether are fighting. I speculate when this person owns the biggest exchange, this person might have the capability to decide in what state of circumstances where Tether might be in 1 year. This might end with another big dump on our faces.

I will collect more information and share updates in this thread.



Isn't it interesting that USDt is being pressured down (slightly, within 10bps, just to push market makers to react), and USDc, the main competitor that you would expect being gaining from the situation, is redeemed heavily nevertheless, while suddenly a competitor born 2 days ago is getting it all?
Exactly! It feels definitely organic and not manipulative at all.
Some people never learn.

Source https://twitter.com/paoloardoino/status/1687203348561223680

Drama about whether there is a real USD support for USDT will certainly continue to be a conversation and debate, even though several times the USDT developer provides concrete evidence that all USDT stocks get a real USD stock, but there are still many who doubt this and hopefully this does not make a shock in the market.

However, it appears that no one believes that Tether is a fractionalized moneylaundering coin anymore. I have been seeing some people who were declaring themselves as bitcoin maximilists in support of Tether. I am not certain why but it might be because of their own interests.

Also, Paypal has issued their own stablecoin which might support the speculation that the American government might use stablecoin issuers as the gateways for inflows and outflows of dollars for the cryptospace.



Payments giant PayPal (PYPL.O) said on Monday it has launched a U.S. dollar stablecoin, becoming the first major financial technology firm to embrace digital currencies for payments and transfers.

While stablecoins - crypto tokens whose monetary value is pegged to a stable asset to protect from wild volatility - have been around for years now, they are yet to successfully make headway into the mainstream consumer payments ecosystem.

Instead, consumers mostly use stablecoins as a means to trade other cryptocurrencies, like bitcoin and ether. The world's largest stablecoin is Tether, followed by USD Coin, which is issued by crypto provider Circle.

Source https://www.reuters.com/technology/paypal-launches-stablecoin-crypto-push-2023-08-07/

This is the beginning, a group of people in congress might write a bill that will create a framework for the government to make stablecoin issuers as the caretakers on cashflow that goes in and out of the cryptospace. This has been speculated since last year and there is no reaction from the community until it will be noticed that the faucet of liquidity is being manipulated.



Leading Democrat Maxine Waters voices concern about PayPal stablecoin

Leading House Democrat Maxine Waters says she is “deeply concerned” about PayPal’s move this week to launch its own stablecoin without having a federal framework in place to regulate the asset.

“PayPal, with 435 million customers globally, exceeds the number of online accounts at all of the megabanks combined,” the California Democrat said on Wednesday in a statement. “Given PayPal’s size and reach, Federal oversight and enforcement of its stablecoin operations is essential in order to guarantee consumer protections and alleviate financial stability concerns.”

Source https://www.theblock.co/post/243991/leading-democrat-maxine-waters-voices-concern-about-paypal-stablecoin

Has Tether, iFinex and Bitfinex come to a chapter in their story where it has become impossible for them to cause a big short dump on the cryptospace? All the accusations that their stablecoin is not backed 100% by real funding has never been proven. There is a Tether hater in social media called @Bitfinexd that appears to have continued hating Tether, however, the circumstances behind the stablecoin at present appears to have shown that many people were wrong. I am also included in this hehehehe.

Tether is also becoming more responsive on requests for transparency.



Stablecoin issuer Tether and sister company Bitfinex agreed to drop opposition to a New York Freedom of Information Law (FOIL) request brought by a group of journalists, including Bloomberg Businessweek's Zeke Faux

The firms said in a statement that the move is part of their "commitment to transparency," although opposition doesn't mean a complete release of all of its documents. "However, it's essential to clarify that transparency does not mean a wholesale release of all our documents. This approach is not in line with standard business practices," the statement said.

Tether previously made a similar announcement after losing in court twice when attempting to block a June 2021 FOIL request filed by CoinDesk. That request pertained to documents produced during the New York Attorney General's inquiry on allegations that USDT, the U.S. dollar-pegged stablecoin that Tether issues, was not sufficiently backed by reserves from mid-2019 to early 2021, settling charges with the company at the end of that period.

Source https://www.coindesk.com/business/2023/11/24/tether-bitfinex-to-drop-opposition-to-new-york-freedom-of-information-law-request/

I'm not too sure, it looks like USDT will be fine in the near future, but many other stable coins have gone bankrupt, one of which is USTC stable coin from Luna and everything in the ecosystem is destroyed.
For now, USDC is still considered the safest because it has high liquid, but I see that when making p2p transactions, people still do it with USDT and there is no excessive doubt/fear

Of course that can be done, because we don't really know who is behind the real stablecoin, whether they really have a real dollar backup, or whatever it is that guarantees its value, in my opinion it's not completely right and wrong.

USDT is the most common and most widely used than USDC. I've always been used to USDT when doing LUNA. trading. and indeed there is no excessive fear or doubt about USDT and it will not be like UST like it has.
Tether or USDT is a crypto asset whose value is guaranteed 1:1 with US dollars. USDT is a stablecoin, or a crypto asset that is designed to have the same value as fiat currency or other assets with a more stable value.