Topic: [OFFICIAL]Bitfinex.com first Bitcoin P2P lending platform for leverage trading - page 18. (Read 723861 times)

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 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?


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.

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:


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.

Exactly that.


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


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


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).


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.



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

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?

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.

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). 

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.



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.

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

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.

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.

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.    

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.

what buys from Tether? useless tokens?

yeah, someone is buying 2 billions USDT from an anonymous company...     any other bullshit?

Same here but if you go to the Withdrawal or Deposit page for USD or USDT it says you need to be verified. What I don't know is how long that has been the case. Both that archive and bfx_drew's comments to me indicate they were talking about it being possible to deposit BTC and withdraw USD or USDT. So my guess is that they tightened it up and added the KYC verification for that very reason. To protect themselves from possible legal actions.

This is really just a story about the evolution of regulations and the exchanges having to change the way they do business to keep themselves within them.


As for this bit: "Surely all USD they hold in bank accounts must have been deposited as USD."

What I mean is that someone must have deposited the USD to Tether. After that, they may well have been traded to someone on or off an exchange for BTC but that person is not the source of Tethers funds.

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.

I´m not sure if that is sufficient proof for you, but you should read this
reddit post by bfx_drew:


The bolded part of your post would be wrong if this is indeed true.

The source of funds could potentially be a problem, because unlike the Federal
Reserve Tether could be shutdown by US authorities (some people already are
comparing Tether to LibertyReserve, which was eventually shutdown after years
of operation).



I´m not sure. I´ve only deposited BTC into Bitfinex and all my withdrawals
were made in Bitcoin, too.

I'm not 100% sure if that screenshot is saying that they used to sell USDT for Bitcoins or that they were just pointing out you could use an exchange to get them.

What do you mean by 'in the Tether reserves'? Surely all USD they hold in bank accounts must have been deposited as USD. If you mean people having Tether wallets or holding Tether on exchanges isn't that then like arguing that the Federal Reserve is at fault if funds from dubious sources are held in $100 bills?

Edit: I think I've worked out why they took that off the website. Now Bitfinex requires verification to be able to withdraw USDT. Did they not require it before?


I've got no problem with conjecture and differing opinions. It's usually the way these things are presented that I disagree most with.


You finally got something right. As we have discussed many times before, an NYC accountancy firm verified this fact only a few months ago. Most companies are only audited annually and it would be rather odd if they were required to do it all the time just because some anonymous bloggers are publishing false allegations about them.

They are printing fake money, therefore manipulating the market. When someone sell BTC to USDT they keep their value in USD but nobody is up fronting the money.

They claim that every USDTs are backed by real $.

If that’s the case, it may be alright. But there’s NO proof of that and they “print” BILLIONS of new USDTs every time they are needed (aka when there’s a crash) manipulating the market by buying tokens at the current $ values.

They have to provide the proof of the USD reserve. Until now, they printed MORE than 2 billions USDT. They must have these money in bank accounts.

What bank accounts when Wells Fargo banned them and they opened a new public bank account 2-3 months ago?

Actually, at least a few people that are in the upper Bitfinex and Tether management
team are publicly known. I recently complained that the names of the executives were
removed from the Tether website, but it seems they are back there.

https://tether.to/about-us/

On the other hand, @Bitfinexed posted this interesting snapshot of the Tether
website from 2015:


They obviously don´t mention that selling point anymore, but this could
theoretically imply that a lot of funds from dubious sources (e.g. ransomware proceeds)
could have ended up in the Tether reserves.

And before you say it @TheQuin, I know that this is conjecture on my part and
could very well turn out to be wrong. But I think it should be allowed to voice different
opinions in a public discussion forum.

You don't seem to understand the concept of proof.

I will ask you again how does that PROVE that Tether is a scam?

the "audit" is that someone called "Craig Sellars" assures the sheep that Tethers are backed by USD at the North American Blockchain conference. He didn't provice any piece of paper as proof.   

As you well know the report was published.

Even if it hadn't been how would that 'fact' prove that Tether was a fraud?