Bitfinex ‘Official Doc’ Confirms Plans to Raise up to $1 Billion in IEO for...

PrimeNumber7

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Quote from: o_e_l_e_o on May 22, 2019, 10:49:40 AM

Quote from: gentlemand on May 22, 2019, 04:45:55 AM

If it was only that it wouldn't have been mentioned in court.

Exactly. When we are talking about deficits of hundreds of millions or even billions of dollars, no judge is going to care about 0.075 BTC (<$600). There is also a big difference between holding bitcoin as it is needed for normal business operations, and investing in to bitcoin, which is what the transcript says. $600 could barely be called an investment for an average citizen - it certainly isn't for a multi billion dollar company.

More details are needed for clarification, but I'd be very surprised if said details were in Tether's favor.

When you are testifying under oath, or speaking to a judge as an officer of the court, you need to be sure it is accurate if you say "zero" or "never", most lawyers will say to not give these types of answers, but sometimes that is unavoidable. If the answer is not "zero", you must make the disclosure the amount is non-zero if asked. You cannot give "zero" as an amount just because the amount is insignificant.

I think the bitcoin as described is more accurately described as a "business expense" than an "investment"

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Quote from: gentlemand on May 22, 2019, 04:45:55 AM

Quote from: figmentofmyass on May 21, 2019, 11:40:51 PM

as it turns out, they own ~0.075 BTC, which they need to process USDT transactions using the omni protocol. see here: https://twitter.com/alistairmilne/status/1130941040460992513

That geezer is a flat out out and out Bitfinex shill. I'd be interested in hearing it from anyone other than him. If it's only from him then it's suspect in the extreme. If it was only that it wouldn't have been mentioned in court.

There's the quote from the transcript - “Prior to the April 24th order … Tether actually did invest in instruments beyond cash and cash equivalents, including bitcoin, they bought bitcoin.”

milne's comments were further echoed by bitfinex's CTO: https://twitter.com/paoloardoino/status/1131213750290341889

it would be helpful if they clarified exactly how much they owned at times "prior to the April 24th order". Grin

so maybe they are playing games and cherry-picking the date, but obviously they're publicly sticking to their story that bitcoin is only bought in small amounts to fund mining fees for tether transactions.

o_e_l_e_o

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Quote from: gentlemand on May 22, 2019, 04:45:55 AM

If it was only that it wouldn't have been mentioned in court.

Exactly. When we are talking about deficits of hundreds of millions or even billions of dollars, no judge is going to care about 0.075 BTC (<$600). There is also a big difference between holding bitcoin as it is needed for normal business operations, and investing in to bitcoin, which is what the transcript says. $600 could barely be called an investment for an average citizen - it certainly isn't for a multi billion dollar company.

More details are needed for clarification, but I'd be very surprised if said details were in Tether's favor.

gentlemand

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Quote from: figmentofmyass on May 21, 2019, 11:40:51 PM

as it turns out, they own ~0.075 BTC, which they need to process USDT transactions using the omni protocol. see here: https://twitter.com/alistairmilne/status/1130941040460992513

That geezer is a flat out out and out Bitfinex shill. I'd be interested in hearing it from anyone other than him. If it's only from him then it's suspect in the extreme. If it was only that it wouldn't have been mentioned in court.

There's the quote from the transcript - “Prior to the April 24th order … Tether actually did invest in instruments beyond cash and cash equivalents, including bitcoin, they bought bitcoin.”

It may not be a significant amount, that's not outlined, but why do we have a price explosion every time Bitfinex has a problem of some sort?

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Quote from: figmentofmyass on May 21, 2019, 11:40:51 PM

Quote from: gentlemand on May 21, 2019, 09:17:02 PM

https://www.theblockcrypto.com/2019/05/21/tether-admits-in-court-to-investing-some-of-its-reserves-in-bitcoin/

This affair just keeps on giving. Ifinex admit to putting some of Tether's reserves into buying BTC as everyone loves 'backing' that stable.

I cannae wait for this cancer to be plopped in the dish and fed into the incinerator.

apparently this story was blown way out of proportion. when i first saw the headlines about this, i was ready to fling endless shit at tether. i assumed this was surely confirmation they were, in fact, manipulating the market and running a fractional reserve/shadow bank.

as it turns out, they own ~0.075 BTC, which they need to process USDT transactions using the omni protocol. see here: https://twitter.com/alistairmilne/status/1130941040460992513

If this is the extent that Tether owns bitcoin, it probably would have been better to mention the bitcoin owned was used to pay transaction fees, or business expenses that can only be paid in bitcoin as opposed to an investment.

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Quote from: gentlemand on May 21, 2019, 09:17:02 PM

https://www.theblockcrypto.com/2019/05/21/tether-admits-in-court-to-investing-some-of-its-reserves-in-bitcoin/

This affair just keeps on giving. Ifinex admit to putting some of Tether's reserves into buying BTC as everyone loves 'backing' that stable.

I cannae wait for this cancer to be plopped in the dish and fed into the incinerator.

apparently this story was blown way out of proportion. when i first saw the headlines about this, i was ready to fling endless shit at tether. i assumed this was surely confirmation they were, in fact, manipulating the market and running a fractional reserve/shadow bank.

as it turns out, they own ~0.075 BTC, which they need to process USDT transactions using the omni protocol. see here: https://twitter.com/alistairmilne/status/1130941040460992513

PrimeNumber7

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Quote from: gentlemand on May 21, 2019, 09:17:02 PM

https://www.theblockcrypto.com/2019/05/21/tether-admits-in-court-to-investing-some-of-its-reserves-in-bitcoin/

This affair just keeps on giving. Ifinex admit to putting some of Tether's reserves into buying BTC as everyone loves 'backing' that stable.

I cannae wait for this cancer to be plopped in the dish and fed into the incinerator.

The article has the actual transcript at the bottom. On page 27, "Miller" (David Miller, attorney for Bitfinex/Tether) talks about how money is fungible and that there are no separate bank accounts for money holding reserves and corporate money comprised of profits, or money that is excess capital.

Tether is a crypto company, and I have every reason to believe every crypto company has some company money invested in bitcoin.

gentlemand

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https://www.theblockcrypto.com/2019/05/21/tether-admits-in-court-to-investing-some-of-its-reserves-in-bitcoin/

This affair just keeps on giving. Ifinex admit to putting some of Tether's reserves into buying BTC as everyone loves 'backing' that stable.

I cannae wait for this cancer to be plopped in the dish and fed into the incinerator.

o_e_l_e_o

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Quote from: squatter on May 20, 2019, 05:18:23 PM

I have no doubt the letter was authentic, however -- the chairman of the bank confirmed its authenticity. It's telling that no bank executive wanted to be associated with the letter, though, and they initially would not confirm the relationship existed.

This is my point. I'm not claiming that the letter is counterfeit, or wasn't released by Deltec as Tether stated. I'm claiming that Deltec bank aren't exactly a well known or reputable institution, which is evidenced by the sheer lack of professionalism throughout that letter. The lack of a name and a single wavy line for a signature is just the icing on the cake, so to speak.

Quote from: squatter on May 20, 2019, 05:18:23 PM

They seemed pretty desperate to produce something that showed adequate cash on hand, knowing that they couldn't produce an audit.

This is it exactly. At any point, they could have completely quashed the rumors and silenced their critics immediately by simply submitting to an independent audit. Their continued refusal to do so was shady enough in and of itself, and this letter did nothing to address those (now confirmed) rumors.

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Quote from: squatter on May 20, 2019, 07:53:04 PM

Quote from: PrimeNumber7 on May 20, 2019, 06:47:00 PM

You also do not know that "no bank executive wanted to be associated" with the letter because you do not know Deltec's normal processes for producing such letters.

I'm guessing there is no "normal process" for that. It's a bizarre request.

I think you hit it right on the head a few posts up:

Quote from: squatter on May 20, 2019, 05:18:23 PM

They seemed pretty desperate to produce something that showed adequate cash on hand, knowing that they couldn't produce an audit.

There were a number of news stories in the press speculating about tether's solvency, and I am guessing some number of customers were asking for documentation to support solvency so they can account for keeping money in tethers or on deposit at bitfinex to trade with.

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Quote from: PrimeNumber7 on May 20, 2019, 06:47:00 PM

Quote from: squatter on May 20, 2019, 05:18:23 PM

Quote from: PrimeNumber7 on May 18, 2019, 03:52:28 PM

It is on Deltec's letter head, the letter was released very publicly, and Deltec did not refute the letter. Based on this, I would conclude the letter was in fact written on behalf of Deltec. The name of the person does not matter IMO because it was speaking on behalf of the company, even if this would be unusual in other parts of the world.

I'm pretty sure it's unusual anywhere in the world to sign without a name.

I have no doubt the letter was authentic, however -- the chairman of the bank confirmed its authenticity. It's telling that no bank executive wanted to be associated with the letter, though, and they initially would not confirm the relationship existed.

If you ask BB&T, or any other bank, if x person or y company has an account/relationship with the bank, they will neither confirm nor deny the existence of any banking relationship. The only exceptions to this is if the customer explicitly allows for such disclosure, or if the bank receives a subpoena, court order, or similar legal process.

That's the point. Tether obviously requested this letter from Deltec. The fact that Tether published it suggests that Deltec was explicitly allowed to disclose their relationship.

It's reasonable that as a matter of protocol, a bank wouldn't confirm whether any relationship existed. I'm not surprised about that.

But you can't blame people for being skeptical when the letter looks like a grade schooler produced it and then the bank denies that any relationship existed. Bitfinex'd must have felt on top of the world at that point. Cheesy

Quote from: PrimeNumber7 on May 20, 2019, 06:47:00 PM

You also do not know that "no bank executive wanted to be associated" with the letter because you do not know Deltec's normal processes for producing such letters.

I'm guessing there is no "normal process" for that. It's a bizarre request.

PrimeNumber7

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Quote from: squatter on May 20, 2019, 05:18:23 PM

Quote from: PrimeNumber7 on May 18, 2019, 03:52:28 PM

It is on Deltec's letter head, the letter was released very publicly, and Deltec did not refute the letter. Based on this, I would conclude the letter was in fact written on behalf of Deltec. The name of the person does not matter IMO because it was speaking on behalf of the company, even if this would be unusual in other parts of the world.

I'm pretty sure it's unusual anywhere in the world to sign without a name.

I have no doubt the letter was authentic, however -- the chairman of the bank confirmed its authenticity. It's telling that no bank executive wanted to be associated with the letter, though, and they initially would not confirm the relationship existed.

If you ask BB&T, or any other bank, if x person or y company has an account/relationship with the bank, they will neither confirm nor deny the existence of any banking relationship. The only exceptions to this is if the customer explicitly allows for such disclosure, or if the bank receives a subpoena, court order, or similar legal process.

You also do not know that "no bank executive wanted to be associated" with the letter because you do not know Deltec's normal processes for producing such letters.

squatter

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Quote from: PrimeNumber7 on May 18, 2019, 03:52:28 PM

It is on Deltec's letter head, the letter was released very publicly, and Deltec did not refute the letter. Based on this, I would conclude the letter was in fact written on behalf of Deltec. The name of the person does not matter IMO because it was speaking on behalf of the company, even if this would be unusual in other parts of the world.

I'm pretty sure it's unusual anywhere in the world to sign without a name.

I have no doubt the letter was authentic, however -- the chairman of the bank confirmed its authenticity. It's telling that no bank executive wanted to be associated with the letter, though, and they initially would not confirm the relationship existed.

Quote from: o_e_l_e_o on May 18, 2019, 12:04:57 PM

I would encourage everyone to view the letter they released here: https://tether.to/wp-content/uploads/2018/11/Tether-Letter.pdf. To me, it looks even worse than if they had said nothing. An unheard of bank based in a tax haven. "Portfolio cash value" was deliberately worded to ensure that it didn't imply 1-to-1 with USD, which Tether were still claiming at the time of release. "Based on information"? Information from who? Verified how? It has no names and no signatories.

It reads like something which could have been written by a child in under 15 minutes.

I remember when that letter came out. It looked ridiculous.

At the same time, this was a phase of heavy scrutiny towards Tether. I remember Bitfinex'd was quite popular at the time. They seemed pretty desperate to produce something that showed adequate cash on hand, knowing that they couldn't produce an audit.

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Quote from: o_e_l_e_o on May 18, 2019, 12:04:57 PM

Quote from: squatter on May 15, 2019, 02:00:56 PM

They have made some attempts to provide alternative proof.

I would encourage everyone to view the letter they released here: https://tether.to/wp-content/uploads/2018/11/Tether-Letter.pdf. To me, it looks even worse than if they had said nothing. An unheard of bank based in a tax haven. "Portfolio cash value" was deliberately worded to ensure that it didn't imply 1-to-1 with USD, which Tether were still claiming at the time of release. "Based on information"? Information from who? Verified how? It has no names and no signatories.

It reads like something which could have been written by a child in under 15 minutes.

It is on Deltec's letter head, the letter was released very publicly, and Deltec did not refute the letter. Based on this, I would conclude the letter was in fact written on behalf of Deltec. The name of the person does not matter IMO because it was speaking on behalf of the company, even if this would be unusual in other parts of the world.

Deltec is the name of the Bank tether is/was using. They are disclosing the value of assets held at the bank. I don't see the words "based on information" in the letter.

It would be unusual for an entity to have $1.8 billion in a "checking account" if they are not spending this money on a regular basis. I would expect most of this money to be invested in short term US government (or other very high credit rating) US dollar denominated bonds/notes maturing within a few months, or possibly a series of CDs.

o_e_l_e_o

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Quote from: squatter on May 15, 2019, 02:00:56 PM

They have made some attempts to provide alternative proof.

I would encourage everyone to view the letter they released here: https://tether.to/wp-content/uploads/2018/11/Tether-Letter.pdf. To me, it looks even worse than if they had said nothing. An unheard of bank based in a tax haven. "Portfolio cash value" was deliberately worded to ensure that it didn't imply 1-to-1 with USD, which Tether were still claiming at the time of release. "Based on information"? Information from who? Verified how? It has no names and no signatories.

It reads like something which could have been written by a child in under 15 minutes.

mayax

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Suuureee! Very rich very smart people are gonna send a billion dollars to a company that lost 850 million dollars entrusting it to a money laundering operation. Roll Eyes

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Quote from: LeGaulois on May 15, 2019, 03:34:11 AM

So lets me get this correctly.
USDT was truly backed 1:1 with USD and the NYAG verified it. Until the loan to Bitfinex.
USDT is now backed with what is claimed on the website.

As I recall, Tether actually changed its terms to reflect this months ago. Very few people took notice, although I saw a thread about it at the time. It looks like they changed the terms when the loan took place. From the looks of it, the AG wasn't being entirely forthright in its claims, but regardless, Bitfinex had to go into damage control mode once the news broke.

Quote from: LeGaulois on May 15, 2019, 03:34:11 AM

So why it was so hard to publish an audit during all this time?

Their legal counsel came out and said that the major auditing firms won't touch them. They have made some attempts to provide alternative proof.

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Quote from: LeGaulois on May 15, 2019, 03:34:11 AM

So why it was so hard to publish an audit during all this time? If they wanted to hide something ok but if it wasn't the case, then why?

https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved

I've no idea what a proper audit consists of, but it may be nothing like the type of thing we're used to. There might be liability issues and monstrous amounts of detail and info needed.

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Quote from: LeGaulois on May 15, 2019, 03:34:11 AM

So lets me get this correctly.
USDT was truly backed 1:1 with USD and the NYAG verified it. Until the loan to Bitfinex.
USDT is now backed with what is claimed on the website.
So why it was so hard to publish an audit during all this time? If they wanted to hide something ok but if it wasn't the case, then why?
USDT is now backed on the Bitfinex loan: backed to something that may never come, not really different to the fractional reserve.

It is not that simple. The NYAG claims that as of now USDT is 74% backed up with cash or cash equivalents. On top of that there is a line of credit agreement for $900 million with Bitfinex, which lasts for 3 years at an annual interest rate of 6.5%. Out of that $625 million is claimed to have been transferred already. Now this doesn't mean that USDT was 100% backed up prior to the loan. It also doesn't mean that the funds already transferred to Bitfinex came from the cash reserves of USDT (need some clarity on this).

The Bitfinex official statement mentions that around $850 million in customer funds were made "temporarily" inaccessible by the authorities. But the NYAG has said that this is false.

This is very confusing situation for me. I just have one advise for all. Stay out of Bitfinex and USDT, until they conduct a third party audit.

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So lets me get this correctly.
USDT was truly backed 1:1 with USD and the NYAG verified it. Until the loan to Bitfinex.
USDT is now backed with what is claimed on the website.
So why it was so hard to publish an audit during all this time? If they wanted to hide something ok but if it wasn't the case, then why?
USDT is now backed on the Bitfinex loan: backed to something that may never come, not really different to the fractional reserve.

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