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Author Topic: Bitfinex blocks withdraws  (Read 626 times)
o_e_l_e_o
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January 05, 2020, 12:16:38 PM
Last edit: January 05, 2020, 08:40:36 PM by o_e_l_e_o
 #41

How have they lost money?
Because Tether is insolvent. They are holding USDT, believing it is worth the same amount in USD, when it is not. We know this because of the court records which admit that Tether is not backed up 1-to-1 with USD anymore.

Which one is really worse?
I think these ongoing lies and cover-ups surrounding Tether are worse. Not only is it highly unethical, but as I said, at some point it's all going to come crashing down, and the users of Tether will be hit with much larger losses than a 36% haircut.

Honestly, I'm not convinced that Tether has ever been printed out of thin air.
See the following court document:
As of the date I am signing this affidavit, Tether has cash and cash equivalents (short term securities) on hand totaling approximately $2.1 billion, representing approximately 74 percent of the current outstanding tethers.
That Tether does not now keep liquid, cash reserves equal to 100 percent of the outstanding tethers is not only disclosed to customers, but hardly a novel concept. Commercial banks operate under a “fractional reserve” system whereby they keep cash on hand representing only a small fraction of customer deposits
They openly admit that they do not have cash to redeem every Tether, and that they are taking part in a "fractional reserve" system like fiat banks do. This is how banks create money out of nothing in the fiat system, and Tether are doing the same with USDT.

Sometimes I feel like much of the ire pointed at Tether = people venting about third party trust issues that apply to a whole swathe of other services.
Oh sure, and don't get me wrong here - I dislike all centralized and custodial exchanges, but Tether are a cut above below the rest.

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January 05, 2020, 08:16:39 PM
Merited by o_e_l_e_o (2)
 #42

How have they lost money?
Because Tether is insolvent. They are holding USDT, believing it is worth the same amount in USD, when it is not.

They haven't lost money. They can redeem their USDT through Tether or trade it at 1:1 on the secondary market.

Suggesting this is worse for customers than a 36% haircut is simply insane. You obviously aren't putting yourself in their shoes.

Which one is really worse?
I think these ongoing lies and cover-ups surrounding Tether are worse. Not only is it highly unethical, but as I said, at some point it's all going to come crashing down, and the users of Tether will be hit with much larger losses than a 36% haircut.

If you asked any Tether customer whether they would prefer a 36% haircut today or a chance to exit at 1:1 any time, they'll take the latter every single time. You aren't thinking about customers' best interests. You're only thinking about your own sense of ethics.

The risk of collapse applies to any custodial exchange. If Tether were shut down and entered liquidation tomorrow, their customers would be completely screwed regardless of any insolvency. Their money would be locked up for many years and bled dry by the courts.

Honestly, I'm not convinced that Tether has ever been printed out of thin air.
See the following court document:
As of the date I am signing this affidavit, Tether has cash and cash equivalents (short term securities) on hand totaling approximately $2.1 billion, representing approximately 74 percent of the current outstanding tethers.
That Tether does not now keep liquid, cash reserves equal to 100 percent of the outstanding tethers is not only disclosed to customers, but hardly a novel concept. Commercial banks operate under a “fractional reserve” system whereby they keep cash on hand representing only a small fraction of customer deposits
They openly admit that they do not have cash to redeem every Tether, and that they are taking part in a "fractional reserve" system like fiat banks do. This is how banks create money out of nothing in the fiat system, and Tether are doing the same with USDT.

You stated that Tether issues (prints) un-backed USDT, and you've implied this is a practice they regularly engage in. No court documents have ever proved either claim. As far as we can tell, USDT was only ever issued based on real deposits. The "insolvency" arose when Tether made a payment to Bitfinex in exchange for a loan agreement instead of burning the associated USDT.

Do you see the difference? You are painting this picture where Tether is constantly printing fake money and operating in a completely illegitimate way, but there is really no evidence of that. All the facts point to a one-time hole in Bitfinex's balance sheet that Tether covered with a one-time loan. And they didn't issue Tethers to do it. Like I said, nothing I've seen indicates that Tether has ever printed USDT out of thin air, and nothing indicates a pattern of such behavior either.

Sometimes I feel like much of the ire pointed at Tether = people venting about third party trust issues that apply to a whole swathe of other services.
Oh sure, and don't get me wrong here - I dislike all centralized and custodial exchanges, but Tether are a cut above[/i] below the rest.

How so? Huobi and Okcoin were caught operating as shadow banks, using billions of CNY in customer deposits to invest in high yield instruments. In fact, I'm very confident that most exchanges have -- at one time or another -- acted in very illegal ways with customer money.

It's just that nobody cares unless we're talking about Tether. Why do you demand audits of Tether and no other exchanges? Why is no one out with their pitchforks digging into possibly insolvency at Bitstamp, Kraken, Coinbase?

Mark my words: The next few QuadrigCX-type collapses are going to happen while everyone is staring at Tether.

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January 05, 2020, 09:36:35 PM
 #43

They can redeem their USDT through Tether or trade it at 1:1 on the secondary market.
The ones who are smart enough to get out now can. The ones who are left holding USDT which is backed up by nothing with no buyers will be left with a 100% loss.

If you asked any Tether customer whether they would prefer a 36% haircut today or a chance to exit at 1:1 any time, they'll take the latter every single time.
It's not at any time, though. They can exit now, sure. Once the courts seize everything Bitfinex have (which I don't think is an unlikely scenario), then they won't be able to exit at all.

The risk of collapse applies to any custodial exchange.
Again agreed, but not many custodial exchanges have already had just shy of a billion dollars seized with ongoing investigations.

You stated that Tether issues (prints) un-backed USDT, and you've implied this is a practice they regularly engage in. No court documents have ever proved either claim.
I don't think we will get definitive proof until it all collapses. What we do now is that the data suggest USDT is printed out of nothing[1], there are court proceedings against them for being suspected of printing USDT out of nothing[2], and they flat out refuse to release an audit proving that they don't print USDT out of nothing. All in all, very untrustworthy.

All the facts point to a one-time hole in Bitfinex's balance sheet that Tether covered with a one-time loan.
Even if that is true, every Tether they have printed since then is not backed up 1-to-1, since they still have a several hundred million dollar hole in their "assets".

Why do you demand audits of Tether and no other exchanges? Why is no one out with their pitchforks digging into possibly insolvency at Bitstamp, Kraken, Coinbase?
I don't use any centralized exchange so I can't really comment, but none of these exchanges are being accused (as far as I am aware) of probably scams as large as Tether.



1 - Is Bitcoin Really Un-Tethered?
Quote
Negative EOM price pressure on Bitcoin in months with large Tether issuance indicates a month-end need for dollar reserves for Tether, consistent with partial reserve backing. Our results are most consistent with the supply-driven hypothesis.
Quote
Rather than demand from cash investors, these patterns are most consistent with the supply-based hypothesis of unbacked digital money inflating cryptocurrency prices

2 - https://www.courtlistener.com/recap/gov.uscourts.nysd.524076/gov.uscourts.nysd.524076.1.0.pdf
Quote
In other words, Tether and Bitfinex purchase bitcoin with fake USDT to draw in momentum investors then cash out by selling it to them for real U.S. dollars.
Quote
In other words, Tether ran its printing press to issue an asset supposedly backed by U.S. dollars at a time it was losing access to U.S. dollar clearing. This makes no sense unless Tether issued unbacked USDT despite its 1:1 guarantee.

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February 11, 2020, 04:35:04 AM
Merited by figmentofmyass (1)
 #44

UPDATE!! i got my funds but still it was annoying..they are letting unverified accounts use the website, once balance appears they come out with KYC.. just feels bad. in addition support was pretty responsive which was the only good thing however this doesn't change the fact that their business style is very invasive and just seems like a setup.
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February 11, 2020, 07:17:57 AM
 #45

The year 2020 is the year of the decentral stable coins and the decentral exchanges.
Everyone is sick of KYC, hassle, hacked exchanges, scams, manipulated central USDT.
Just watch the rise of decentral  Waves-Exchange. No more need for 80% of my exchange needs to use a central exchange that treat you like a dog.
There is a whole decentral banking sector rising, this could take over a huge portion of the up-to-now-not-crypto-financial sector...


Because of their orderbook, Bitfinex makes only sense for whales,  not for small users.

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February 11, 2020, 10:53:03 AM
 #46

The year 2020 is the year of the decentral stable coins and the decentral exchanges.

I predict they will make an inroad of, ooh, up to 0.00001% in the market. It's going to be amazing to witness.

People are lazy and stupid in the main. They will go for the easiest spoon fed option 9.9 times out of 10.

Crypto would be a much healthier place if there were less reliance on centralised services. It ain't happening.

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February 11, 2020, 10:58:00 AM
 #47

The year 2020 is the year of the decentral stable coins and the decentral exchanges.

I predict they will make an inroad of, ooh, up to 0.00001% in the market. It's going to be amazing to witness.

People are lazy and stupid in the main. They will go for the easiest spoon fed option 9.9 times out of 10.

Crypto would be a much healthier place if there were less reliance on centralised services. It ain't happening.
Moreover, people are rarely check any feedbacks on services and it is surprisingly easy to find negative feedback on bitfinex.
why bother themselves using it..
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February 11, 2020, 11:23:12 AM
 #48

Quote
I predict they will make an inroad of, ooh, up to 0.00001% in the market.

well lets look Dai: Now 115Mio USD are in Dai, a decentral stable coin. So Dai is already more than 5% size compared to USDT.
Well its February, more will come.
Yes in Tether is more than 2Billion USD. But DAI volume and its advantages are more and more obvious to many traders.
Now with the creation of Neutrino-Stablecoin, Waves is really gaining momentum. Well you can trade several Coins there, not only ETH-token like at
Etherdelta. Sure Trading volume is still low, but we will see. I expect Waves-coin to rise to the Top20 at CMC(now 53).

Even if decentral exchanges still cover only a small portion of all cryptoexchange-market, well 99% of people still use only fiat and only banks and no crypto.
That does not say that you have to follow the crowd...

Anyway I also still use central exchanges when it comes to payout/payin Fiat. But for sure never ever again Bitfinex.

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February 12, 2020, 01:03:43 PM
 #49

so anybody knows exchange which has funding feature ?  Grin
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February 12, 2020, 10:03:28 PM
 #50

so anybody knows exchange which has funding feature ?  Grin

Binance has a borrowing/lending feature. It's not directly P2P. They act as a market maker, profiting from the bid-ask spread.

Poloniex has a P2P lending market like Bitfinex. A word of warning before you start lending there: Poloniex's taking money from its customers to cover its loss

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