Bear market? Will NEVER HAPPEN because of tether printing.

[andohyeb]

There isn't any gurantee to say that bear market will end due to one or two reasons. The market can go up or down anytime and not even stock or currency market can say it won't experience a bear market.

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[Yucco]

Tether will sooner or later implode if these dollars aren't backed by real dollars.

Tether claims that their tokens are backed at 1:1 rates by real US dollars tho.... so there shouldn't be a problem when that money is printed because it's not really printed, it's just USD, and then you must go complain to the FED about printed USD too if you don't like that.

https://tether.to/announcement-transparency-update/

Official statement.

This is the usual manipulation. Nobody checked this. They do not allow auditors to their documents. Most likely this will be fraud. It is not known how long they will be able to avoid auditing.

[Hueristic]

Tether will sooner or later implode if these dollars aren't backed by real dollars.

Tether claims that their tokens are backed at 1:1 rates by real US dollars tho.... so there shouldn't be a problem when that money is printed because it's not really printed, it's just USD, and then you must go complain to the FED about printed USD too if you don't like that.

https://tether.to/announcement-transparency-update/

Official statement.

This is the usual manipulation. Nobody checked this. They do not allow auditors to their documents. Most likely this will be fraud. It is not known how long they will be able to avoid auditing.

I believe they allowed a law firm to do a one day audit to prove they had the funds to back that one days activity or some such thing. I doubt they will ever be able to allow their past moves to be viewed as thats a fast track to a deep dark cell. It's interesting to see the only US resident leaving, its a little too late for that I'd say. Lol

[Branko]

aaaand...look at year 2020 tether printing (from 4 to 20+ billions in a year) and everyone thinks
current bull market is "organic"

I remember accusations that 700m tether is fake and not covered by fiat back in 2017...how about 20 billion?

[exstasie]

aaaand...look at year 2020 tether printing (from 4 to 20+ billions in a year) and everyone thinks
current bull market is "organic"

I remember accusations that 700m tether is fake and not covered by fiat back in 2017...how about 20 billion?

Question: What happens when people wire billions of dollars to crypto exchanges?
Answer: Bull markets.

Whether it's Tether, Coinbase, or Bitstamp receiving the wires shouldn't make a difference. During a bull market, all of them would be receiving ramped up inflows. We just don't get any blockchain data detailing how much USD Coinbase and Bitstamp are crediting to user accounts.

Also, Tether has become quite popular as a means for cross-border remittance: Millions in Crypto Is Crossing the Russia-China Border Daily. There, Tether Is King

Strong OTC demand for USDT (possibly from the remittance market) often pushes USDT above $1 on exchanges. This further reinforces dollar inflows to Tether, as depositors move to arbitrage the peg back to $1.

[Branko]

aaaand...look at year 2020 tether printing (from 4 to 20+ billions in a year) and everyone thinks
current bull market is "organic"

I remember accusations that 700m tether is fake and not covered by fiat back in 2017...how about 20 billion?

Question: What happens when people wire billions of dollars to crypto exchanges?
Answer: Bull markets.

Whether it's Tether, Coinbase, or Bitstamp receiving the wires shouldn't make a difference. During a bull market, all of them would be receiving ramped up inflows. We just don't get any blockchain data detailing how much USD Coinbase and Bitstamp are crediting to user accounts.

Also, Tether has become quite popular as a means for cross-border remittance: Millions in Crypto Is Crossing the Russia-China Border Daily. There, Tether Is King

Strong OTC demand for USDT (possibly from the remittance market) often pushes USDT above $1 on exchanges. This further reinforces dollar inflows to Tether, as depositors move to arbitrage the peg back to $1.

So what will happen if SEC goes after USDT similar way as they went after XRP?

[exstasie]

So what will happen if SEC goes after USDT similar way as they went after XRP?

Why would they? How does Tether qualify as a security under federal securities law, and how does USDT issuance qualify as an unregistered securities offering? I'm no lawyer, but I just don't see it. I just see a bunch of hand waving.

Ripple was a very different situation where the issuer maintained ownership of a significant majority of XRP and blatantly engaged in price manipulation.

A "senior advisor for digital assets" at the SEC recently commented on stablecoins. In her view, stablecoins backed by fiat reserves probably do not violate securities laws. https://tokenist.com/senior-advisor-for-sec-some-stablecoins-violate-securities-laws/

None of this means Tether is legally in the clear. I just think it won't be the SEC who comes after them. Fincen + the US Attorneys office seems more likely, if anything.

[bbc.reporter]

@ exstasie. However, there are no more audits proving that Tether is backed by fiat reserves. Tether can also be charged of price manipulation if indeed billions of USDT have been printed without backing.

Also add the FBI and the DHS for money laundering charges, tax evation, fraud and terrorist financing. The American government might throw the whole book on them hehehe.

[exstasie]

@exstasie. However, there are no more audits proving that Tether is backed by fiat reserves.

No stablecoin has ever been audited. The most we've seen is a balance sheet attestation from Circle for USDC, which Tether also did a few years ago with Friedman LLP.

Circle's accounting firm can tell you why audits don't take place:

Grant Thornton does not perform 100 percent audits of a client’s portfolio – a process that is prohibitive by price and time

Anyway, I don't think the SEC advisor's point was about 100% backing vs. fractional reserve, but rather the distinction between a backed stablecoin and one that is pegged using centralized price manipulation. I believe she was specifically referring to Dai:

Szczepanik didn’t say any of the categories were off the hook, but she went out of her way to single out the third one. Coins that rely on “some sort of pricing mechanism” to maintain their value, she said, may fall within the purview of the SEC, whose charge is to protect investors from fraud and scams. In particular, if a stablecoin has “some central party controlling the price fluctuation over time,” that “might be getting into the land of security,” Szczepanik said.

Back in December, the founders of an “algorithmic” stablecoin project called Basis, which had raised $133 million from high-profile venture capital firms, cited securities law as the reason for abruptly shutting it down. “Having to apply US securities regulation to the system had a serious negative impact on our ability to launch Basis,” they wrote. Though Dai works differently, and its adherents would argue that it is not at all centralized, Szczepanik’s description was broad enough to imply that it may not be immune from legal issues similar to those Basis faced.

Wouldn't that be hilarious, if the "decentralized" stablecoin Dai gets taken down by the SEC while Tether walks away unscathed?

Tether can also be charged of price manipulation if indeed billions of USDT have been printed without backing.

Now we're talking about two different things. If Tether was used to manipulate the price of BTC, that doesn't mean Tether manipulated the price of USDT. That's what matters regarding characterization of USDT as a security. If a company is manipulating the price of Bitcoin, that is within the purview of the CFTC and not the SEC, since Bitcoin is not a security.

As for the Tether printer, you're just repeating more FUD.

There is no evidence Tether issued USDT without backing. There is evidence that some issued USDT became unbacked after the Crypto Capital/Bitfinex fiasco. You may not think the distinction is important, but it is crucial to establishing whether Tether ever actually "printed" anything.

Losing control of dollars held in a bank account is a matter of third party trust gone bad. That's very different than intentionally printing unbacked tokens.

[Branko]

Losing control of dollars held in a bank account is a matter of third party trust gone bad. That's very different than intentionally printing unbacked tokens.

You believe 16 billion USDT printed in 2020 is backed by fiat? They had trouble to back it 1:1 when market cap was 700m, but now suddenly found 20 billion somewhere?

[tmfp]

[el kaka22]

People keep considering that USDT is the ONLY way people could buy bitcoin, why are you wrong this much? I understand that there is 20+ billion USDT in the market, but that doesn't mean all of them ar constantly used to buy bitcoin, plus even when they do, do you know how much real money are in it as well? I can tell you, billions of dollars worth of bitcoin all bought and stored already without ever being sold.

So long story short we are talking about something much better and easier here, the real money, and this USDT deal is obviously something that impacts bitcoin, but even if you end up printing 10 billion new USDT today, and make it buy bitcoin, that could return with all 10 billion of them sold back and get USD instead of USDT, we do not know how it will happen. Do not hope for something like this to change anything, USDT is just another stablecoin and not a big deal.

[BrewMaster]

those who bumped this old topic and are discussing the same stupid topic all over again are missing the fact that OP was already proven wrong 2 years ago when the bear market did happen and price of bitcoin fell from $20000 down to $3000 in the course of 2.5 years and during that time Tether printed a lot more tokens that they have ever printed specially compared to 2017 (the year bitcoin was rising).

if OP's arguments had any reality to it then price should have never dropped in first place and the bear market that he claimed "will never happen" would have never happened. but we know now that it did happen and Tether never had any effects on bitcoin price.

[Branko]

if OP's arguments had any reality to it then price should have never dropped in first place and the bear market that he claimed "will never happen" would have never happened. but we know now that it did happen and Tether never had any effects on bitcoin price.

It didn't happen because at that period USDT was used to get USD, not BTC, thats the whole point

[bbc.reporter]

@exstasie. However, there are no more audits proving that Tether is backed by fiat reserves.

No stablecoin has ever been audited. The most we've seen is a balance sheet attestation from Circle for USDC, which Tether also did a few years ago with Friedman LLP.

Circle's accounting firm can tell you why audits don't take place:

Grant Thornton does not perform 100 percent audits of a client’s portfolio – a process that is prohibitive by price and time

Anyway, I don't think the SEC advisor's point was about 100% backing vs. fractional reserve, but rather the distinction between a backed stablecoin and one that is pegged using centralized price manipulation. I believe she was specifically referring to Dai:

Szczepanik didn’t say any of the categories were off the hook, but she went out of her way to single out the third one. Coins that rely on “some sort of pricing mechanism” to maintain their value, she said, may fall within the purview of the SEC, whose charge is to protect investors from fraud and scams. In particular, if a stablecoin has “some central party controlling the price fluctuation over time,” that “might be getting into the land of security,” Szczepanik said.

Back in December, the founders of an “algorithmic” stablecoin project called Basis, which had raised $133 million from high-profile venture capital firms, cited securities law as the reason for abruptly shutting it down. “Having to apply US securities regulation to the system had a serious negative impact on our ability to launch Basis,” they wrote. Though Dai works differently, and its adherents would argue that it is not at all centralized, Szczepanik’s description was broad enough to imply that it may not be immune from legal issues similar to those Basis faced.

Wouldn't that be hilarious, if the "decentralized" stablecoin Dai gets taken down by the SEC while Tether walks away unscathed?

Tether can also be charged of price manipulation if indeed billions of USDT have been printed without backing.

Now we're talking about two different things. If Tether was used to manipulate the price of BTC, that doesn't mean Tether manipulated the price of USDT. That's what matters regarding characterization of USDT as a security. If a company is manipulating the price of Bitcoin, that is within the purview of the CFTC and not the SEC, since Bitcoin is not a security.

As for the Tether printer, you're just repeating more FUD.

There is no evidence Tether issued USDT without backing. There is evidence that some issued USDT became unbacked after the Crypto Capital/Bitfinex fiasco. You may not think the distinction is important, but it is crucial to establishing whether Tether ever actually "printed" anything.

Losing control of dollars held in a bank account is a matter of third party trust gone bad. That's very different than intentionally printing unbacked tokens.

No stablecoins has been audited does not automatically imply that Tether is 100% backed by $20 billion held in a bank.

It might also be under the authority of the SEC because USDT is a dollar derivative. Derivatives are securities.

You can call it FUD, however, this leaves more questions and speculations without an audit.

[exstasie]

@exstasie. However, there are no more audits proving that Tether is backed by fiat reserves.

No stablecoin has ever been audited. The most we've seen is a balance sheet attestation from Circle for USDC, which Tether also did a few years ago with Friedman LLP.

No stablecoins has been audited does not automatically imply that Tether is 100% backed by $20 billion held in a bank.

I'm not saying it does. I was just responding to the tired argument that Tether hasn't been audited. Since no stablecoin has ever been audited, that's a moot point. An audit (or lack thereof) isn't inherently what makes a stablecoin safe or risky to hold.

It might also be under the authority of the SEC because USDT is a dollar derivative. Derivatives are securities.

Derivatives are secondary securities, ~95% of which do not meet the SEC's definition of a security. Those fall under the jurisdiction of the CFTC. The ~5% of derivatives the SEC regulates are "security-based swaps" which include things like stock or bond-based swaps, or credit default swaps.

The SEC said this recently regarding fiat-backed stablecoins:

We believe that market participants may structure and sell a digital asset in such a way that it does not constitute a security and implicate the registration, reporting, and other requirements of the federal securities laws.

https://www.sec.gov/news/public-statement/sec-finhub-statement-occ-interpretation

You can call it FUD, however, this leaves more questions and speculations without an audit.

Whatever dude, I just don't see the point in spreading so much fear, uncertainty, and doubt.

[thecodebear]

I never got what the deal is with all the tether conspiracy theories. Like, do you think they are just printing tether and handing it out to people for free?? haha. Come on get real.

I don't know exactly how tether generation works but no doubt they create more of it when people pass USD into tether. Now whether or not it is at any given time fully backed by dollars sitting in a bank somewhere is a question you can certainly ask, but the whole idea that tether props up bitcoin and is what causes price appreciation and entire bull runs is just, well, a conspiracy theory. Tether has nothing to do with bull markets or bear markets. It is just the largest of many stablecoins. Tether doesn't prop up bitcoin, and bitcoin wouldn't crash if something bad happened to tether, because the many other stablecoins would readily replace it (most large exchanges that use tether seem to have plenty of trading pairs with other stablecoins as well).

If a bear market doesn't happen in the next few years it will be because institutional investors are piling into bitcoin at a consistent rate for years to come, not because of conspiracy theories. lol

[sana54210]

You can call it FUD, however, this leaves more questions and speculations without an audit.

Whatever dude, I just don't see the point in spreading so much fear, uncertainty, and doubt.

I think you guys both could be wrong in a way. Bitcoin doesn't need to FUD or it doesn't need to be calm when it comes to Tether. I feel like the logical thing would be to use it as carefully as possible and not leave the whole future of bitcoin to it neither. Sure there is a huge deal with tether and bitcoin connection, I am not arguing against that, I also believe news about something actually helps or hurts bitcoin price more than the deal itself.

If I end up selling 1 billion dollars worth of bitcoin that might impact bitcoin price about 10% or maybe even 20% but if I write an article about how I sold all my 1 billion dollars worth of bitcoin and warn others to do the same, you will see, bitcoin could drop more than 50% very easily. That is the thing about tether that makes you guys both right and wrong, tether will not change too much no matter what, however news of it may.

[bbc.reporter]

@exstasie. However, there are no more audits proving that Tether is backed by fiat reserves.

No stablecoin has ever been audited. The most we've seen is a balance sheet attestation from Circle for USDC, which Tether also did a few years ago with Friedman LLP.

No stablecoins has been audited does not automatically imply that Tether is 100% backed by $20 billion held in a bank.

I'm not saying it does. I was just responding to the tired argument that Tether hasn't been audited. Since no stablecoin has ever been audited, that's a moot point. An audit (or lack thereof) isn't inherently what makes a stablecoin safe or risky to hold.

It might also be under the authority of the SEC because USDT is a dollar derivative. Derivatives are securities.

Derivatives are secondary securities, ~95% of which do not meet the SEC's definition of a security. Those fall under the jurisdiction of the CFTC. The ~5% of derivatives the SEC regulates are "security-based swaps" which include things like stock or bond-based swaps, or credit default swaps.

The SEC said this recently regarding fiat-backed stablecoins:

We believe that market participants may structure and sell a digital asset in such a way that it does not constitute a security and implicate the registration, reporting, and other requirements of the federal securities laws.

https://www.sec.gov/news/public-statement/sec-finhub-statement-occ-interpretation

You can call it FUD, however, this leaves more questions and speculations without an audit.

Whatever dude, I just don't see the point in spreading so much fear, uncertainty, and doubt.

Does this imply that the CFTC can also charge Tether?

In any case, you agreed that Tether is shady and you also know that there have been no verifiable audits, however, you say any speculations and if someone asks questions about Tether’s legality and backing is FUD? What would you say if Tether has been taken down?

Similar to you, I want this pump. However, as learners and participants of the cryptospace, we should ask questions. Do you think I have been researching about Tether because I want FUD? I hold bitcoins also, however, we should not be thoughtless larpers.

[exstasie]

Does this imply that the CFTC can also charge Tether?

Yes. The CFTC hasn't expressed much interest in stablecoins but they did say this:

A stablecoin backed by fiat currency or a tangible commodity is likely a “commodity” under the Commodity Exchange Act, but the CFTC should have no day-to-day oversight over such a stablecoin; it retains anti-fraud and anti-manipulation authority, however.

https://www.cftc.gov/media/2731/TAC100319_Stablecoins/download

In any case, you agreed that Tether is shady and you also know that there have been no verifiable audits, however, you say any speculations and if someone asks questions about Tether’s legality and backing is FUD?

This is ridiculous. I've explained in painful detail what is FUD and what isn't. Please stop beating a dead horse. Let it go.

What would you say if Tether has been taken down?

I'd shrug. What would you say if Binance got taken down? Or if Coinbase got hacked? Or.....