[OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading

[mayax]

what buys from Tether?

It's who not what. A large and ever growing variety of customers. Taking a quick look back through your posting history I see you have been predicting the imminent collapse of Bitfinex and Tether for a couple of years now, so I do understand how frustrating you must find it to see them being so successful.

it's not frustrating at all. it's for fun.

yes, Bitfinex gang will end in prison. this is the most important thing.

regarding to the audit, there is NONE.  Tether can’t do an audit due to evil banks! Like I told you all along, they will never audit their books . lol

this is what Giancarlo said.    

[TheQuin]

it's not frustrating at all. it's for fun.

Oh, I see now. You actually enjoy the fact that everything you have been saying will happen to Bitfinex for years hasn't happened. I'm sure you going to have many more years of happiness then.

Regards to audits I answered that yesterday and, unlike you, I find repeating myself somewhat pointless.

[Samarkand]

...

Edit: Reading it again that bfx_drew comment doesn't make any sense. To issue Tether there must be someone 'writing a cheque' for it. Not necessarily direct to Tether, they could deposit USD on an exchange and then the exchange buys from Tether.

Why would bfx_drew make a comment that doesn´t make any sense? He works for Bitfinex after all, therefore
he should be much more knowledgeable about the cryptocurrency scene than the average reddit user.

Let me explain what could be a possible course of events using a hypothetical example:
1. An altcoin exchange like Poloniex that has no fiat banking (= no fiat deposits = no inflow of actual fiat) makes a ton of income due to trading fees
2. Let´s assume they make 20M $ in a month from a few trading pairs
3. The fee income is collected as cryptocurrencies, because no fiat has ever entered Poloniex (see 1.)
4. Poloniex doesn´t want to hold the cryptocurrencies and instead transfers the ownership of a basket of
cryptocurrencies worth 20M $ to Tether
5. Tether issues 20M $ of USDT, which are backed by the cryptocurrencies (and not by actual fiat deposits)
...

This would explain where all the more than 2 billions USDT are coming from. These altcoin
exchanges are making a killing and certainly have that kind of money (and they obviously have a
huge need for a stable-currency as they don´t want to hold all their income in volatile
cryptocurrencies and can´t easily convert that kind of money on the exchanges / OTC markets).
As mayax correctly points out it is extremely unlikely / basically impossible that institutional investors have wired that kind of money to Tether.
This would also explain why Tether issues new USDT in spite of closing registrations at Tether.to for months.

This is of course only one of the use cases of Tether, it obviously serves other purposes as well.
But this is the most likely explanation for the whole situation if you ask me.

[TheQuin]

Why would bfx_drew make a comment that doesn´t make any sense? He works for Bitfinex after all, therefore
he should be much more knowledgeable about the cryptocurrency scene than the average reddit user.

It looks like a post in response to someone where he just didn't think through what he was saying. He could have gone back and deleted it but then there would just be more screams of conspiracy.

Let me explain what could be a possible course of events using a hypothetical example:
1. An altcoin exchange like Poloniex that has no fiat banking (= no fiat deposits = no inflow of actual fiat) makes a ton of income due to trading fees
2. Let´s assume they make 20M $ in a month from a few trading pairs
3. The fee income is collected as cryptocurrencies, because no fiat has ever entered Poloniex (see 1.)
4. Poloniex doesn´t want to hold the cryptocurrencies and instead transfers the ownership of a basket of
cryptocurrencies worth 20M $ to Tether
5. Tether issues 20M $ of USDT, which are backed by the cryptocurrencies (and not by actual fiat deposits)
...

Step 5 is where this falls down. Exchange rate volatility would make that impossible to maintain and secondly Freedman LLC would not have confirmed that the money was in bank accounts.

As mayax correctly points out thinks it is extremely unlikely / basically impossible that institutional investors have wired that kind of money to Tether.
This would also explain why Tether issues new USDT in spite of closing registrations at Tether.to for months.

It's going to be a mixture of customers. A question for you. You probably saw the Tether rich list nrd525 posted on his thread earlier. Of those exchanges holding large amounts of Tether how many accept USD wires? Obviously Bitfinex and Bittrex I know of but I don't frequent the others.

https://support.bittrex.com/hc/en-us/articles/115001293992-Purchase-USDT-via-Wire-Transfer
https://wallet.tether.to/richlist

[mayax]

https://youtu.be/MwKYbT9MoPE?t=201

another 100 million

http://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC3AgWkj9FMo5LsPTW1zBTwXL

 just when the price went below $10.000. All too predictable...  

Of course, TheQuin will have an explanation for that. A BIG investor just deposited another 100 mil. USD in a Tether bank account(unknown bank). 

[TheQuin]

another 100 million

Excellent news. Tether goes from strength to strength. What a success story they are turning out to be, despite the failed predictions of all the naysayers.

[Samarkand]

...

Step 5 is where this falls down. Exchange rate volatility would make that impossible to maintain and secondly Freedman LLC would not have confirmed that the money was in bank accounts.

...

It's going to be a mixture of customers. A question for you. You probably saw the Tether rich list nrd525 posted on his thread earlier. Of those exchanges holding large amounts of Tether how many accept USD wires? Obviously Bitfinex and Bittrex I know of but I don't frequent the others.

...

Why would exchange rate volatility make that impossible to maintain? After all issued Tethers
are never redeemed - otherwise we would have seen the numbers on the transparency page
go down at some point - and therefore it is irrelevant if the basket of cryptocurrencies would
drop below the issued amount.
That this could be a problem in the long-term is obvious.

Regarding the Friedman document I already outlined several possibilities:
-Bitfinex could have provided the necessary funds for the Tether audit from funds of the Bitfinex exchange
-rich individuals could have provided the necessary funds for the snapshot date
-banks could have provided the liquiditiy for the audit
-Tether is completely genuine and all Tethers are 100 % backed by actual fiat deposits (I admit that this is
also possible, but unlikely if mayax and I are correct)
...

There are a myriad of possibilities how they could have got the necessary funds for a short
period of time in order to prove their solvency for the snapshot date. After all they run one
of the biggest exchanges in the world and definitely have
good connections. The document was worded very carefully and leaves a lot of room
for interpretation.

Regarding your question:
-Bittrex allows fiat deposits for amounts that exceed 100k $, but only credits USDT to your account if you wire actual USD to them (you probably knew this)
-Binance has no fiat deposits
-Poloniex has no fiat deposits
-Huobi has no fiat deposits since the crackdown of the Chinese government
-OKEx I have no idea, but it should be similar to Huobi

I also have a question for you. Why would Tether start to issue USDT on Ethereum in
addition to issuances on OMNI?

[TheQuin]

Why would exchange rate volatility make that impossible to maintain? After all issued Tethers
are never redeemed - otherwise we would have seen the numbers on the transparency page
go down at some point - and therefore it is irrelevant if the basket of cryptocurrencies would
drop below the issued amount.
That this could be a problem in the long-term is obvious.

Exactly that.

Regarding the Friedman document I already outlined several possibilities:
-Bitfinex could have provided the necessary funds for the Tether audit from funds of the Bitfinex exchange
-rich individuals could have provided the necessary funds for the snapshot date
-banks could have provided the liquiditiy for the audit

We already had this discussion and I fully explained why that couldn't have happened. Do you want to revisit those posts?

-Tether is completely genuine and all Tethers are 100 % backed by actual fiat deposits (I admit that this is
also possible, but unlikely if mayax and I are correct)
...

In my opinion that is by far the most likely explanation.

There are a myriad of possibilities how they could have got the necessary funds for a short
period of time in order to prove their solvency for the snapshot date. After all they run one
of the biggest exchanges in the world and definitely have
good connections. The document was worded very carefully and leaves a lot of room
for interpretation.

As I recall it wasn't at all ambiguous and I quoted the lines from the report that you missed explaining that they had reconciled the bank statements and received full explanations from Tether what every entry was. (What accountants call auditing).

Regarding your question:
-Bittrex allows fiat deposits for amounts that exceed 100k $, but only credits USDT to your account if you wire actual USD to them (you probably knew this)
-Binance has no fiat deposits
-Poloniex has no fiat deposits
-Huobi has no fiat deposits since the crackdown of the Chinese government
-OKEx I have no idea, but it should be similar to Huobi

OKEx did because they had the same issues receiving international wires as Tether did due to the Taiwanese banking system.
So, in summary, I would guess that the vast majority of Tethers funds are coming from Bitfinex and Bittrex customers deposits.

I also have a question for you. Why would Tether start to issue USDT on Ethereum in
addition to issuances on OMNI?

Not sure, maybe it's trendy and they like playing with virtual kittens?

[Samarkand]

...

We already had this discussion and I fully explained why that couldn't have happened. Do you want to revisit those posts?

...
Not sure, maybe it's trendy and they like playing with virtual kittens?

I remember very well that your main argument when we had this discussion before
was that they received bank statements to the bank accounts as well and not only took a look at
Tether´s accounts at the snapshot
date, which would make my theories impossible (Tether wouldn´t have been
able to get the liquidity for the snapshot date from somewhere else).
However, the memorandum also explicitly states the following:

We have not performed any procedures or make any conclusion for activity prior
to or subsequent to September 15 2017...

Therefore it is still possible that the funds were wired into the Tether bank accounts prior
to the date.

Let´s assume that you are right and Friedman LLP did verify the existence of all the money
that Tether is supposed to be holding. Even if this were true the outstanding USDT at the time
of their memorandum was roughly ~442M $. Are you sure the roughly 1.8 billion $ of USDT
that have been issued since then are backed as well? When will the full audit be released?
Were are the Bitfinex audits for 2015, 2016 and 2017 that were repeatedly promised
by various Bitfinex employees?

I´ll reiterate that I personally hope that I´m wrong on all of this, but there are too many
red flags in my opinion.

Maybe issuing USDT on Ethereum is a method of coming up with new desperate attempts
to increase the lifespan of their scheme? I recently posted the observation that fraudulent
endeavours often increase their activity at the end of their lifespan.

Take a look at Bitconnect... before their recent downfall they were actually planning
to do an ICO on top of their existing ponzi scheme.

[TheQuin]

We discussed a few post ago that I have no problem with conjecture, debate and differences of opinion but I do have issues sometimes with how things are presented. This is an example of that. It is possible that it is just that you don't fully understand the report but it looks very much like a deliberate attempt to misrepresent it by selectively quoting out of context. I'm giving you the benefit of doubt here, I'm the son of an accountant, so I grew up with this stuff and I have been sole director of Limited companies. Maybe what is strikingly obvious to me isn't to everyone.

I remember very well that your main argument when we had this discussion before
was that they received bank statements to the bank accounts as well and not only took a look at
Tether´s accounts at the snapshot
date, which would make my theories impossible (Tether wouldn´t have been
able to get the liquidity for the snapshot date from somewhere else).
However, the memorandum also explicitly states the following:

I remember that you argued that they had not seen bank statements by selectively quoting the line where they said they had seen snapshots of the balances and neglected to the statement just below it saying they had.

Now, what is the context of this quote?

We have not performed any procedures or make any conclusion for activity prior
to or subsequent to September 15 2017...

It comes at the beginning of the document under the heading Background where they outline the purpose and scope of the report. In summary to verify that Tethers are fully backed as of a specific date.

This is what I quoted last time and its context is that it is under the heading Procedures Performed where they describe what they actually did.

FLLP traced the cash balance on the trial balance and bank statement for each bank account and inquired of Client as to any reconciling items.

They explicitly stated that they traced the cash, that means verifying where it came from and fully rules out the conspiracy theory that they just borrowed the money from a friend to fool the accountants.

So it is not.....

Therefore it is still possible that the funds were wired into the Tether bank accounts prior
to the date.

As for the rest of your post. However many audits reports or whatever Tether and Bitfinex issue will not make any difference, the conspiracy theorist will just misrepresent them in the same way they did this one. Privately held companies are under no obligation to make accounts public.

I hope you're just having a laugh with ETH stuff. Making a comparison between using a technology as a means of transmission and a Ponzi raising funds through an ICO. Please tell me you are joking.

Going back to conjecture and opinion. Your opinion would be that the large increase in the issuance of Tether over the last few months is a sign that it is a fraud. My opinion would be that it is entirely consistent with the increase in interest in crypto and mainstream news coverage during that time. There were days back in December where my fiat markets squawk feeds were entirely filled with Bitcoin news. The fact that a large amount of money poured into the markets at the same time is entirely logical to me.

[Samarkand]

We discussed a few post ago that I have no problem with conjecture, debate and differences of opinion but I do have issues sometimes with how things are presented. This is an example of that. It is possible that it is just that you don't fully understand the report but it looks very much like a deliberate attempt to misrepresent it by selectively quoting out of context. I'm giving you the benefit of doubt here, I'm the son of an accountant, so I grew up with this stuff and I have been sole director of Limited companies. Maybe what is strikingly obvious to me isn't to everyone.

...

Going back to conjecture and opinion. Your opinion would be that the large increase in the issuance of Tether over the last few months is a sign that it is a fraud. My opinion would be that it is entirely consistent with the increase in interest in crypto and mainstream news coverage during that time. There were days back in December where my fiat markets squawk feeds were entirely filled with Bitcoin news. The fact that a large amount of money poured into the markets at the same time is entirely logical to me.

It was definitely not a deliberate attempt by me to quote out of context. I admit
that I´m not as familiar with memorandums like these as you are and I was wrong there.
After reading your post I read the memorandum again and it seems that you are right and
that I was wrong.

I also agree that privately held companies are under no obligation to publish audits.
However, the business of Tether is not your standard business and is founded on the belief
that the outstanding USDT are actually backed. Don´t you think that it would be in their best
interest to provide audits regularly? Especially, because they claim right on their website that
they are subject to "frequent audits". Isn´t it noteworthy that there never was a single
audit released since Tether was founded in 2015?. Maybe I just have a different understanding
of the term "frequent" than the guys at Tether.

Besides, I agree that large amounts of money poured into Bitcoin due to the bull market
and the increased media coverage. However, Bitcoin has lost nearly 50 % since its ATH
and the media coverage has receded. Therefore it is not entirely logical to me that Tether has actually
ramped up their USDT issuance since the start of 2018.
Additionally, I remember reading a report of Morgan Stanley (not 100 % sure, it could have been
JP Morgan as well?) were they suggested that only 6 billion $ of real fiat money have actually
found their way into the cryptocurrency markets and the rest of the 495 billion $ crypto marketcap
is basically paper gains (we all know how ridiculous market caps are in the cryptocurrency scene).
I find it extremely unlikely that more than 30 % of this amount should have found their way into
the cryptocurrency scene using Tether.

[TheQuin]

It was definitely not a deliberate attempt by me to quote out of context. I admit
that I´m not as familiar with memorandums like these as you are and I was wrong there.
After reading your post I read the memorandum again and it seems that you are right and
that I was wrong.

No worries, as I said I was giving you the benefit of the doubt. I was just a bit annoyed as I thought I had convinced you the last time we went through this.
The idea that any accountancy firm would be fooled by a trick like that seemed so ludicrous to me as to be laughable before I even read the report. I just find it frustrating to see people still repeating it.

I also agree that privately held companies are under no obligation to publish audits.
However, the business of Tether is not your standard business and is founded on the belief
that the outstanding USDT are actually backed. Don´t you think that it would be in their best
interest to provide audits regularly? Especially, because they claim right on their website that
they are subject to "frequent audits". Isn´t it noteworthy that there never was a single
audit released since Tether was founded in 2015?. Maybe I just have a different understanding
of the term "frequent" than the guys at Tether.

It could be helpful in some respects but as above would also just give the bloggers more source material to misrepresent.

Besides, I agree that large amounts of money poured into Bitcoin due to the bull market
and the increased media coverage. However, Bitcoin has lost nearly 50 % since its ATH
and the media coverage has receded. Therefore it is not entirely logical to me that Tether has actually
ramped up their USDT issuance since the start of 2018.

My bit of conjecture. This is exactly where traders that know how to trade are building their positions.

Additionally, I remember reading a report of Morgan Stanley (not 100 % sure, it could have been
JP Morgan as well?) were they suggested that only 6 billion $ of real fiat money have actually
found their way into the cryptocurrency markets and the rest of the 495 billion $ crypto marketcap
is basically paper gains (we all know how ridiculous market caps are in the cryptocurrency scene).
I find it extremely unlikely that more than 30 % of this amount should have found their way into
the cryptocurrency scene using Tether.

I'd like to read those reports to see exactly what they mean by that before commenting. It doesn't really strike me as something that is measurable.
Given the combined size of the exchanges using Tether, $2Bn seems like a small number to me. As you say marcap is irrelevant, it's not a stock, it's currencies. Compare $500Bn to money supply numbers and get some real perspective as to how small this still is. It's less than half a percent of the world's M2 money supply.

[Samarkand]

...

My bit of conjecture. This is exactly where traders that know how to trade are building their positions.

...

Possible. However, Tether has closed registrations for months now. I´d argue that it is likely
that this isn´t institutional money, because an institutional investor, who decides to invest 50M $
right now would still be buying at a magnitude of the price levels a year ago. Institutional investors
are mostly conservative investors, which is understandable because most have strict investment guidelines and
are not in the business of buying things that are up more than 10x year-on-year.

Besides, I´d speculate that they would use a custodial service like the ones offered by Coinbase
or Xapo instead of using Tether as an intermediary.

In case you (or other readers of this thread) missed the link posted by nrd525 in his Market Tracker thread:
http://www.tetherreport.com/

A few really interesting observations:

Author’s opinion - it is highly unlikely that Tether is growing through any organic business process,
rather that they are printing in response to market conditions.
Tether printing moves the market appreciably; 48.8% of BTC’s price rise in the period studied
occurred in the two-hour periods following the arrival of 91 different Tether grants to the Bitfinex wallet.

Of course statistics can be used in a misleading way (just like quotes @TheQuin  ), but this
data supports the logarithmic chart of BTC price action to Tether issuances that I posted
a few weeks ago.

[TheQuin]

Possible. However, Tether has closed registrations for months now. I´d argue that it is likely
that this isn´t institutional money, because an institutional investor, who decides to invest 50M $
right now would still be buying at a magnitude of the price levels a year ago. Institutional investors
are mostly conservative investors, which is understandable because most have strict investment guidelines and
are not in the business of buying things that are up more than 10x year-on-year.

There's more than one type of institution. I'm usually thinking of secretive hedge funds hiding out in Connecticut when I use that word in relation to crypto. Also, traders who know what they are doing usually work for themselves.

As nrd525 pointed out if you're skilled enough you can make statistics say anything you want. If the person publishing that can't even put their name to it I'm not going to waste my time talking about it.

[Samarkand]

...
There's more than one type of institution. I'm usually thinking of secretive hedge funds hiding out in Connecticut when I use that word in relation to crypto. Also, traders who know what they are doing usually work for themselves.
...

According to Morgan Stanley hedge funds have invested 2 billion $ in total in 2017
into cryptocurrencies:
https://www.coindesk.com/morgan-stanley-hedge-funds-poured-2-billion-into-cryptos-in-2017/

Let´s assume that these numbers are accurate for the sake of argument.
Do you really think that more than 2/3 of this amount have been wired to Tether?
Isn´t it more likely that most hedge funds wouldn´t touch an entity like Tether with
a ten-foot pole - let alone wire hundreds of millions of $ to them?

Yes, traders, who know what they are doing are likely working for themselves due to
various reasons. However, it is likely that the entities, who allegedly wire hundreds of millions
to Tether are not individuals due to the size of the alleged tranfers.

[TheQuin]

Do you really think that more than 2/3 of this amount have been wired to Tether?

No, as I said a couple of days ago Tethers funds come from a mixture of sources. Some from hedge funds, some from traders deposits via Bitfinex and Bittrex and who knows what else. The real point is these are actually relatively small amounts of money in the financial world. I know a lot of people like to point at $2Bn and nudge nudge wink wink, must be a fraud. Trying to guess who the customers are is just a pointless game.

[alyssa85]

Friedman LLP no longer lists bitfinex as a client:

https://www.reddit.com/r/BitcoinMarkets/comments/7smm8r/friedman_llp_website_no_longer_lists_bitfinex_as/

>Looks like they've removed the mention of auditing Bitfinex from their website sometime between December and now.

I think we can conclude that the audit will not happen.

I recommend reading the thread linked to above for more info.

[Quickseller]

Friedman LLP no longer lists bitfinex as a client:

https://www.reddit.com/r/BitcoinMarkets/comments/7smm8r/friedman_llp_website_no_longer_lists_bitfinex_as/

>Looks like they've removed the mention of auditing Bitfinex from their website sometime between December and now.

I think we can conclude that the audit will not happen.

I recommend  the thread linked to above for more info.

That is probably not a reasonable conclusion. Their page doesn’t list all their clients. I suspect they were either getting smeared by the anti-tether shills or receiving many inquiries from the same.

[mayax]

Friedman LLP no longer lists bitfinex as a client:

https://www.reddit.com/r/BitcoinMarkets/comments/7smm8r/friedman_llp_website_no_longer_lists_bitfinex_as/

>Looks like they've removed the mention of auditing Bitfinex from their website sometime between December and now.

I think we can conclude that the audit will not happen.

I recommend  the thread linked to above for more info.

That is probably not a reasonable conclusion. Their page doesn’t list all their clients. I suspect they were either getting smeared by the anti-tether shills or receiving many inquiries from the same.

...or they don't want to support a criminal gang(like Bitfinex/Tether) anymore...

[Bonez0r]

...

I also have a question for you. Why would Tether start to issue USDT on Ethereum in
addition to issuances on OMNI?

Probably because of high fees on the BTC blockchain. Last time i sent USDT from Polo to Bitfinex it cost me 25 USDT. I imagine it's probably a lot cheaper on ETH's blockchain.