Judge Orders Bitfinex to Turn Over Tether Loan Documents (Again)

DooMAD

legendary

Activity: 3948

Merit: 3191

Leave no FUD unchallenged

Quote from: bbc.reporter on September 24, 2020, 07:47:21 PM

Quote from: DooMAD on September 22, 2020, 04:42:43 AM

If anyone has any viable alternatives, I'm all ears. They're going to keep printing more from nothing. New traders are probably being suckered in daily. It's only going to get bigger. Is there a way to collapse it gradually without causing an avalanche that brings the entire mountain down on us?

The only thing I can think of is some sort of educational campaign to highlight the dangers. But I suspect the greed of traders will win out, just as it's been doing all along. They're not going to listen to reason.

Why are you finding fault on the traders? The fault is with iFinex and Tether for issuing USDT under questionable backing practices.

I reckon the exchanges should slowly replace USDT with USDC and other 100% backed stablecoins.

I'm not saying all traders are to blame. Some of them may be genuinely unaware of the suspicious and evasive behaviour that Tether/Bitfinex are displaying. However, if traders have seen the warnings and choose to ignore them, they're equally culpable if/when it blows up in their faces and they lose everything.

bbc.reporter

legendary

Activity: 3122

Merit: 1492

Quote from: DooMAD on September 22, 2020, 04:42:43 AM

Quote from: bbc.reporter on September 21, 2020, 07:45:35 PM

Quote from: DooMAD on September 21, 2020, 04:46:39 AM

I'm not much of a speculator, so even if it meant some turmoil in the short term, I think it's better the poison is bled out sooner rather than later.

Think of it this way, what would cause a bigger loss of faith in the markets? Recognising it for what it is and allowing it to collapse now at $14 billion of mirage fakery, or pretending it's not a problem and waiting until it balloons to $140 billion and then blows up in our faces? The longer we allow the charade go on, the bigger the fallout will be.

However, you do not think that the tether rug pull will not cause the cryptospace's biggest crisis that might take years for recovery? It might not only be a short term turmoil.

If anyone has any viable alternatives, I'm all ears. They're going to keep printing more from nothing. New traders are probably being suckered in daily. It's only going to get bigger. Is there a way to collapse it gradually without causing an avalanche that brings the entire mountain down on us?

The only thing I can think of is some sort of educational campaign to highlight the dangers. But I suspect the greed of traders will win out, just as it's been doing all along. They're not going to listen to reason.

Why are you finding fault on the traders? The fault is with iFinex and Tether for issuing USDT under questionable backing practices.

I reckon the exchanges should slowly replace USDT with USDC and other 100% backed stablecoins.

DoublerHunter

hero member

Activity: 2590

Merit: 644

Quote from: noorammak on September 22, 2020, 08:47:54 AM

Quote from: wack slacker on September 18, 2020, 08:49:30 AM

If Tether is accused of cheating again, this could be a shock, the market could be hit hard by bad news like this one. Tether they have printed too much USDT at a rate of 1 billion dollars a month in the last 5 months. Assuming they used USDT to buy altcoins and bitcoins at a good price and now they want to sell them to use the money to prove their liquidity, it is a disaster.

LAUGH OUT LOUD. It seems your theory is correct, the market is bleeding. I hope Tether will pass the audit and the uptrend of the market returns. The fall of Tether will have many other negative effects. We have seen a bearish trend in this market for too long.

^ The truth is they always have manipulation on this stable coin, they can't provide proper liquidity because there is no exact total supply.
Teaching an old dog with new tricks really is hard. I still imagine how the Attorneys reacted when they heard that they will be handling crypto-
currency clients. Probably the hearing was lenghty because of the curiousity of the attorneys.
But going back to the main issue, Tether and Bitfinex will soon resolve this conflict, I can tell. Its just that, it would probably be the best for us to do our part instead by not spending all of our finances with exhanges.

noorammak

member

Activity: 490

Merit: 11

Quote from: wack slacker on September 18, 2020, 08:49:30 AM

If Tether is accused of cheating again, this could be a shock, the market could be hit hard by bad news like this one. Tether they have printed too much USDT at a rate of 1 billion dollars a month in the last 5 months. Assuming they used USDT to buy altcoins and bitcoins at a good price and now they want to sell them to use the money to prove their liquidity, it is a disaster.

LAUGH OUT LOUD. It seems your theory is correct, the market is bleeding. I hope Tether will pass the audit and the uptrend of the market returns. The fall of Tether will have many other negative effects. We have seen a bearish trend in this market for too long.

Karartma1

legendary

Activity: 2310

Merit: 1422

Quote from: DooMAD on September 22, 2020, 05:43:56 AM

Quote from: Karartma1 on September 22, 2020, 05:13:43 AM

Exactly, the greed of traders will win out even if/when the truth will out. We all know that if this bubble bursts there is no going back. We can only expect more control coming from the regulators (who are already pushing their agenda like hell) and a possible crypto winter come back.
People will cry for their money and this world will never be the same again. If you ask me, shame on them. Sorry.

It's not like there haven't been enough warnings. There have been a few topics where people have highlighted the problems in clear detail:

https://bitcointalksearch.org/topic/m.18693313
https://bitcointalksearch.org/topic/m.33233707
https://bitcointalksearch.org/topic/m.46924908
https://bitcointalksearch.org/topic/m.50162473

BitMEX also have a fairly comprehensive write-up about it:

https://blog.bitmex.com/tether/

I can't tell if people simply haven't noticed and we're not shouting loudly enough, or they're just too busy trying to make a buck to even care. If it's the former, then maybe we have a chance to educate people and limit the damage. If it's the latter, then all we can do is await the inevitable and hope that it dies before it gets too big.

Remarkable recap! Nothing to add really! It's going to be like you said, at some point the elephant in the room will destroy the room itself and those two scenarios you're envisaging are the most likely ones. I know which side I want to be on if anything bad happens (I am out of merit, but I'll keep some for you to merit this post). Thanks.

DooMAD

legendary

Activity: 3948

Merit: 3191

Leave no FUD unchallenged

Quote from: Karartma1 on September 22, 2020, 05:13:43 AM

Exactly, the greed of traders will win out even if/when the truth will out. We all know that if this bubble bursts there is no going back. We can only expect more control coming from the regulators (who are already pushing their agenda like hell) and a possible crypto winter come back.
People will cry for their money and this world will never be the same again. If you ask me, shame on them. Sorry.

It's not like there haven't been enough warnings. There have been a few topics where people have highlighted the problems in clear detail:

https://bitcointalksearch.org/topic/m.18693313
https://bitcointalksearch.org/topic/m.33233707
https://bitcointalksearch.org/topic/m.46924908
https://bitcointalksearch.org/topic/m.50162473

BitMEX also have a fairly comprehensive write-up about it:

https://blog.bitmex.com/tether/

I can't tell if people simply haven't noticed and we're not shouting loudly enough, or they're just too busy trying to make a buck to even care. If it's the former, then maybe we have a chance to educate people and limit the damage. If it's the latter, then all we can do is await the inevitable and hope that it dies before it gets too big.

kryptqnick

legendary

Activity: 3248

Merit: 1402

Join the world-leading crypto sportsbook NOW!

Quote from: DooMAD on September 18, 2020, 08:57:39 AM

It's one of those cases where you want both sides to lose, heh.

I don't doubt the Attorney General's office are basically grasping in the dark, have no idea what they're actually looking for and probably wouldn't recognise it if they found it. But at the same time, it's right that they should be suspicious of Bitfinex, who have been excessively furtive and rather shady in their dealings around the supposed "fully backed" nature of Tether. It would be genuinely astounding to me if it turns out they really do have $14 billion USD in reserve, but something tells me they're never going to attempt to prove that's the case. Last I heard of this ongoing farce, they'd amended their T&Cs to state that other assets may be used to back Tether, but didn't go into much further detail about what those assets might be.

I'll take this opportunity to give the usual reminder that people should only have funds on exchanges that they can afford to lose, particularly in the case of Bitfinex at the moment. Also, if anyone currently has large sums stored in USDT, consider hedging with some other stablecoins (although, personally, they all sound as scammy and dangerous as each other to me, so I don't actually recommend holding any of them).

I'm sure Tether is not 100% backed by USD, and like you've mentioned, the company even doesn't claim that it is (I'm talking about the assets part). Since it's clear that the problem is with how good this stablecoin is backed up, I don't see why the Attorney General's office would not know what to look for: they can just require the company to show them all the money and other assets they have to back up Tether (reports as well as proofs that those reports are real). In case this goes south, Tether might finally crash. But if the most popular stable coin crashes, others might also experience panic withdraws of money, so I'd rather put money into BTC than in another stable coin until the investigation is over.

Karartma1

legendary

Activity: 2310

Merit: 1422

Quote from: DooMAD on September 22, 2020, 04:42:43 AM

Quote from: bbc.reporter on September 21, 2020, 07:45:35 PM

Quote from: DooMAD on September 21, 2020, 04:46:39 AM

I'm not much of a speculator, so even if it meant some turmoil in the short term, I think it's better the poison is bled out sooner rather than later.

Think of it this way, what would cause a bigger loss of faith in the markets? Recognising it for what it is and allowing it to collapse now at $14 billion of mirage fakery, or pretending it's not a problem and waiting until it balloons to $140 billion and then blows up in our faces? The longer we allow the charade go on, the bigger the fallout will be.

However, you do not think that the tether rug pull will not cause the cryptospace's biggest crisis that might take years for recovery? It might not only be a short term turmoil.

If anyone has any viable alternatives, I'm all ears. They're going to keep printing more from nothing. New traders are probably being suckered in daily. It's only going to get bigger. Is there a way to collapse it gradually without causing an avalanche that brings the entire mountain down on us?

The only thing I can think of is some sort of educational campaign to highlight the dangers. But I suspect the greed of traders will win out, just as it's been doing all along. They're not going to listen to reason.

Exactly, the greed of traders will win out even if/when the truth will out. We all know that if this bubble bursts there is no going back. We can only expect more control coming from the regulators (who are already pushing their agenda like hell) and a possible crypto winter come back.
People will cry for their money and this world will never be the same again. If you ask me, shame on them. Sorry.

DooMAD

legendary

Activity: 3948

Merit: 3191

Leave no FUD unchallenged

Quote from: bbc.reporter on September 21, 2020, 07:45:35 PM

Quote from: DooMAD on September 21, 2020, 04:46:39 AM

I'm not much of a speculator, so even if it meant some turmoil in the short term, I think it's better the poison is bled out sooner rather than later.

Think of it this way, what would cause a bigger loss of faith in the markets? Recognising it for what it is and allowing it to collapse now at $14 billion of mirage fakery, or pretending it's not a problem and waiting until it balloons to $140 billion and then blows up in our faces? The longer we allow the charade go on, the bigger the fallout will be.

However, you do not think that the tether rug pull will not cause the cryptospace's biggest crisis that might take years for recovery? It might not only be a short term turmoil.

If anyone has any viable alternatives, I'm all ears. They're going to keep printing more from nothing. New traders are probably being suckered in daily. It's only going to get bigger. Is there a way to collapse it gradually without causing an avalanche that brings the entire mountain down on us?

The only thing I can think of is some sort of educational campaign to highlight the dangers. But I suspect the greed of traders will win out, just as it's been doing all along. They're not going to listen to reason.

bbc.reporter

legendary

Activity: 3122

Merit: 1492

Quote from: DooMAD on September 21, 2020, 04:46:39 AM

Quote from: bbc.reporter on September 20, 2020, 08:59:22 PM

However, if you knew the conclusion of Bitfinex losing this case, you would want them to win hehe. Their loss might cause the big short of bitcoin.

Many of the exchanges in the cryptospace are using USDT on high volume, I reckon if the rug is pulled, all the liquidity is pulled.

I'm not much of a speculator, so even if it meant some turmoil in the short term, I think it's better the poison is bled out sooner rather than later.

Think of it this way, what would cause a bigger loss of faith in the markets? Recognising it for what it is and allowing it to collapse now at $14 billion of mirage fakery, or pretending it's not a problem and waiting until it balloons to $140 billion and then blows up in our faces? The longer we allow the charade go on, the bigger the fallout will be.

However, you do not think that the tether rug pull will not cause the cryptospace's biggest crisis that might take years for recovery? It might not only be a short term turmoil.

Karartma1

legendary

Activity: 2310

Merit: 1422

Quote from: DooMAD on September 18, 2020, 08:57:39 AM

It's one of those cases where you want both sides to lose, heh.

I don't doubt the Attorney General's office are basically grasping in the dark, have no idea what they're actually looking for and probably wouldn't recognise it if they found it. But at the same time, it's right that they should be suspicious of Bitfinex, who have been excessively furtive and rather shady in their dealings around the supposed "fully backed" nature of Tether. It would be genuinely astounding to me if it turns out they really do have $14 billion USD in reserve, but something tells me they're never going to attempt to prove that's the case. Last I heard of this ongoing farce, they'd amended their T&Cs to state that other assets may be used to back Tether, but didn't go into much further detail about what those assets might be.

I'll take this opportunity to give the usual reminder that people should only have funds on exchanges that they can afford to lose, particularly in the case of Bitfinex at the moment. Also, if anyone currently has large sums stored in USDT, consider hedging with some other stablecoins (although, personally, they all sound as scammy and dangerous as each other to me, so I don't actually recommend holding any of them).

I am sorry to stress the fact that Bitcoin and Tether are quite linked together, unfortunately. Hence, if there will be a defeat of both Bitfinex and Tether, Bitcoin will inevitably face a few consequences.
We have seen this already but this could be like an atomic bomb. Look a USDT cap and tell me how that will not reflect on BTC.

tl;dr take your funds out of finex just in case, and avoid using tether to store your wealth until things will look better

Vatimins

sr. member

Activity: 987

Merit: 289

Blue0x.com

Man, this is quite a dilemma for bitfinex. Imagine what the effects would be or what would happen with the whole crypto currency industry if bitfinex would ever lose this case. Just thinking about it makes my imagination go wild and scares me a lot. But at the same time though, I really cannot say that the people opposing bitfinex are entirely wrong. I mean, bitfinex is really quite shady. But maybe, just maybe, they really do have the assets to back those tether. If things like these happening makes small investors like me worry, imagine those who have invested a lot or most of their assets? That's just scary.

DooMAD

legendary

Activity: 3948

Merit: 3191

Leave no FUD unchallenged

Quote from: bbc.reporter on September 20, 2020, 08:59:22 PM

However, if you knew the conclusion of Bitfinex losing this case, you would want them to win hehe. Their loss might cause the big short of bitcoin.

Many of the exchanges in the cryptospace are using USDT on high volume, I reckon if the rug is pulled, all the liquidity is pulled.

I'm not much of a speculator, so even if it meant some turmoil in the short term, I think it's better the poison is bled out sooner rather than later.

Think of it this way, what would cause a bigger loss of faith in the markets? Recognising it for what it is and allowing it to collapse now at $14 billion of mirage fakery, or pretending it's not a problem and waiting until it balloons to $140 billion and then blows up in our faces? The longer we allow the charade go on, the bigger the fallout will be.

bryant.coleman

legendary

Activity: 3766

Merit: 1217

Quote from: wack slacker on September 18, 2020, 08:49:30 AM

If Tether is accused of cheating again, this could be a shock, the market could be hit hard by bad news like this one. Tether they have printed too much USDT at a rate of 1 billion dollars a month in the last 5 months. Assuming they used USDT to buy altcoins and bitcoins at a good price and now they want to sell them to use the money to prove their liquidity, it is a disaster.

Correct. A few months back, the market cap of Tether used to be in the 4.0-4.5 billion USD range. When I checked yesterday, this had increased to $15.2 billion. Tether is creating money out of thin air, just like Ben Bernanke did during the Obama presidency, when he was the Chair of the Federal Reserve. Tether is just like fiat currencies such as USD or UKP.... I would even say that Tether is even worse when compared to them. At least in the case of USD, the Federal Reserve has some limitations on the amount of banknotes that they can print. Tether doesn't have any such restrictions.

bbc.reporter

legendary

Activity: 3122

Merit: 1492

Quote from: DooMAD on September 18, 2020, 08:57:39 AM

It's one of those cases where you want both sides to lose, heh.

I don't doubt the Attorney General's office are basically grasping in the dark, have no idea what they're actually looking for and probably wouldn't recognise it if they found it. But at the same time, it's right that they should be suspicious of Bitfinex, who have been excessively furtive and rather shady in their dealings around the supposed "fully backed" nature of Tether. It would be genuinely astounding to me if it turns out they really do have $14 billion USD in reserve, but something tells me they're never going to attempt to prove that's the case. Last I heard of this ongoing farce, they'd amended their T&Cs to state that other assets may be used to back Tether, but didn't go into much further detail about what those assets might be.

I'll take this opportunity to give the usual reminder that people should only have funds on exchanges that they can afford to lose, particularly in the case of Bitfinex at the moment. Also, if anyone currently has large sums stored in USDT, consider hedging with some other stablecoins (although, personally, they all sound as scammy and dangerous as each other to me, so I don't actually recommend holding any of them).

However, if you knew the conclusion of Bitfinex losing this case, you would want them to win hehe. Their loss might cause the big short of bitcoin.

Many of the exchanges in the cryptospace are using USDT on high volume, I reckon if the rug is pulled, all the liquidity is pulled.

coolcoinz

legendary

Activity: 2814

Merit: 1192

Quote from: NeuroticFish on September 18, 2020, 10:04:01 AM

Quote from: wack slacker on September 18, 2020, 08:49:30 AM

If Tether is accused of cheating again, this could be a shock, the market could be hit hard

Although the market may indeed react heavily, for many the fact Tether is cheating is known thing, not "a shock".
I actually hope this Tether "soap opera" comes to an end and only the properly backed stable coins remain on the market.

I second this. USDT is so shady that it's only a matter of time before some shit they're doing comes to the surface again and makes everything nearby stink. If USDT is actually proven to be making money out of thin air the ripple effect will damage Bitfinex and all cryptos, especially altcoins that trade exclusively for stablecoins.
It's going to be a cleansing event we haven't seen before.

so98nn

hero member

Activity: 2114

Merit: 603

Quote from: wack slacker on September 18, 2020, 08:49:30 AM

If Tether is accused of cheating again, this could be a shock, the market could be hit hard by bad news like this one. Tether they have printed too much USDT at a rate of 1 billion dollars a month in the last 5 months. Assuming they used USDT to buy altcoins and bitcoins at a good price and now they want to sell them to use the money to prove their liquidity, it is a disaster.

If this is the case and tether doesn't support the current on-going investigation then it could call for untrusted opposition in it's use. Just imagine for those who had their investments into USDT to use it as stable coin will have to face bad consequences thereafter. I believe it's best not to invest in the coins who are on the verge of jeopardy. This calls for uncalled investments.

Quote from: NeuroticFish on September 18, 2020, 10:04:01 AM

Quote from: wack slacker on September 18, 2020, 08:49:30 AM

If Tether is accused of cheating again, this could be a shock, the market could be hit hard

Although the market may indeed react heavily, for many the fact Tether is cheating is known thing, not "a shock".
I actually hope this Tether "soap opera" comes to an end and only the properly backed stable coins remain on the market.

That's the issue, under the name of stable coin they ripped off the process of loaning. Since this is under centralised category they are abided with the regular laws too.
Im not sure if this applies to the country where this hearing is happening, but it will have overall effect.

Lucius

legendary

Activity: 3234

Merit: 5637

Blackjack.fun-Free Raffle-Join&Win $50🎲

Quote from: DooMAD on September 19, 2020, 05:02:20 AM

This all looks very risky. Anyone still trading this Tether IOU is either far braver or far more misguided than I. Only time will tell which it is.

I’ve never liked the idea of stable coins for a simple reason, they’re very easy to print without real cover in anything that should be behind them. What has been presented to the public before is that only about 70% of USDT is backed by $, and as you say for the rest it is not known on what basis they were printed. I understand that crypto users like this type of coin because it is easy to send between crypto exchanges and trade it between other coins, but many seem to intentionally close their eyes and pretend that everything works perfectly.

I wouldn’t say there’s any courage here, many don’t really realize how easy it is to tear down the whole thing just if someone is really interested in doing it - but I believe there is one very powerful circle of people who know how to keep the whole thing afloat - which it’s not that hard if you have your own money factory.

DooMAD

legendary

Activity: 3948

Merit: 3191

Leave no FUD unchallenged

Quote from: grabpopcorn536 on September 18, 2020, 09:59:46 PM

Other stable currencies will benefit, exchange rate difference will occur, but eventually, the tether will recover as before.
Bifinex will find a way to compensate for the money they lack to bail for Tether, everything will be stable.

If Bitfinex have been lying all along and Tether isn't fully backed and they're operating some sort of fractional reserve scheme, does it deserve to recover? I can't help but think your judgement might be clouded by how much USDT I presume you're holding. Try not to make that classic mistake where, rather than someone admits they've been conned and cuts their losses in time, they keep believing things are going to get better until they lose everything. Because it's possible such an outcome might happen in this case.

This all looks very risky. Anyone still trading this Tether IOU is either far braver or far more misguided than I. Only time will tell which it is.

grabpopcorn536

member

Activity: 476

Merit: 12

Quote from: NeuroticFish on September 18, 2020, 10:04:01 AM

Quote from: wack slacker on September 18, 2020, 08:49:30 AM

If Tether is accused of cheating again, this could be a shock, the market could be hit hard

Although the market may indeed react heavily, for many the fact Tether is cheating is known thing, not "a shock".
I actually hope this Tether "soap opera" comes to an end and only the properly backed stable coins remain on the market.

Other stable currencies will benefit, exchange rate difference will occur, but eventually, the tether will recover as before.
Bifinex will find a way to compensate for the money they lack to bail for Tether, everything will be stable.

Topic: Judge Orders Bitfinex to Turn Over Tether Loan Documents (Again) (Read 398 times)