Was it really possible for Bitfinex to amass $65m from their issued tokens?

legendary

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Quote from: monsanto on April 29, 2017, 09:06:31 AM

If you trade on Bitfinex things are listed in "USD." So it is an assumption many traders are probably making on Bitfinex -- that they are holding and trading dollars. Do you think those are dollars or Tethers? On other sites like Poloniex, Tethers are explicitly listed as "USDT".

dollars. it would not be the world's largest exchange if everyone thought they were in usdt.

however it's pretty much the same thing. a bitfinex dollar is a credit from them, not anything particularly real. but at least it maintains the right redeemability rate.

monsanto

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..like bright metal on a sullen ground.

Quote from: talkbitcoin on April 29, 2017, 05:09:05 AM

Quote from: Wind_FURY on April 27, 2017, 09:50:34 PM

The rabbit hole is going deeper and deeper. All USDT is supposed to have the equal amount of USD in the "vaults" of Bitfinex but how can it be proven? How can we know that there is $65m in their vaults in case all USDT holders want to convert them to real USD?

haha, USDT is a good example of how all of us makes assumption that are clearly wrong. as the comment above this said USDT has never supposed to have aqual price with USD, it is the assumption that we made because we have always seen price at $1.
this is also another good reason for us to start reading more details about what we invest our money in.

If you trade on Bitfinex things are listed in "USD." So it is an assumption many traders are probably making on Bitfinex -- that they are holding and trading dollars. Do you think those are dollars or Tethers? On other sites like Poloniex, Tethers are explicitly listed as "USDT".

talkbitcoin

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Quote from: Wind_FURY on April 27, 2017, 09:50:34 PM

The rabbit hole is going deeper and deeper. All USDT is supposed to have the equal amount of USD in the "vaults" of Bitfinex but how can it be proven? How can we know that there is $65m in their vaults in case all USDT holders want to convert them to real USD?

haha, USDT is a good example of how all of us makes assumption that are clearly wrong. as the comment above this said USDT has never supposed to have aqual price with USD, it is the assumption that we made because we have always seen price at $1.
this is also another good reason for us to start reading more details about what we invest our money in.

Nagadota

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Quote from: Wind_FURY on April 27, 2017, 09:50:34 PM

The rabbit hole is going deeper and deeper. All USDT is supposed to have the equal amount of USD in the "vaults" of Bitfinex but how can it be proven? How can we know that there is $65m in their vaults in case all USDT holders want to convert them to real USD?

On their transparency page.

So basically, they admit themselves that it's currently not all backed since there's more Tether in circulation on there than the amount of USD in their reserves.

You're not actually capable of cashing out USDT whenever you want, you just have to convert it to something else like Bitcoin and then withdraw. That's why coinmarketcap says that the price is only about $0.93 right now. They could completely crash the market at some point.

Wind_FURY

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The rabbit hole is going deeper and deeper. All USDT is supposed to have the equal amount of USD in the "vaults" of Bitfinex but how can it be proven? How can we know that there is $65m in their vaults in case all USDT holders want to convert them to real USD?

franky1

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Quote from: monsanto on April 27, 2017, 12:07:51 AM

I've read conflicting reports as to whether or not there is a deeper affiliation between the USDT devs and Bitfinex management. I saw some posts claiming there was a parent company that owned both -- anyone know if this was definitively debunked?

https://tether.to/legal/

Quote

1.1.2 “Associates” means Tether Limited, Tether Holdings Limited, BFXNA Inc., iFinex Inc., and each and every one of their respective shareholders, subsidiaries, employees, contractors, agents, directors, officers, partners, affiliates, insurers, and attorneys;

https://www.linkedin.com/in/reevecollins

Quote

Always on the cutting edge of technology, Collins has been a pioneer in the Bitcoin/Blockchain space and was co-founder and CEO of Tether. His efforts revolutionized the way currency is transacted by creating the world’s first fiat currency platform on the Bitcoin blockchain. In just over one year from inception, Tether was acquired by Bitfinex the world's largest bitcoin exchange.

https://themerkle.com/wells-fargo-blocks-180m-in-funds-belonging-to-ifinex-and-tether-customers/

ifinex taking banks to court lol

sorry but just because ifinex uses "usdT" does not make them absolved from fiat regulations.

any virtual currency that is easily transferable (paypal dollar to fiat dollar.. tether dollar to fiat dollar) where its pegged 1:1.. the 'virtual currency' is treated as if it is fiat.

so although bitfinex uses bitcoin.. its still ALSO playing with something thats deemed as fiat (tether pegged 1:1 for dollar.. much like paypal MySQL balance of paypal dollar is not real dollar, but resembles and easily translatable visually representing fiat)

monsanto

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..like bright metal on a sullen ground.

Quote from: Wind_FURY on April 26, 2017, 11:50:06 PM

Quote from: monsanto on April 26, 2017, 01:25:49 AM

Quote from: Wind_FURY on April 23, 2017, 09:23:48 PM

Bitfinex says everything is fine and that they have enough funds to pay off all their customers. Is it because they have already made back the lost $65m that was hacked from their exchange?

How did they make it back so quickly and where did the money that large come from?

Quote from: monsanto on April 22, 2017, 03:50:58 PM

Quote from: http://coinmarketcap.com/assets/tether/

Total Supply
64,950,871 USDT

seen here a field of 65 million tethers growing in their natural environment:

that should take care of any pesky auditing issues Wink

I'm not gonna claim tethers were involved... but it fits.

I do not think Bitfinex released and controls all the USDT in the market. But the amount of USDT in circulation and the hacked amount is remarkably weird. Maybe someone smart can connect the dots? Until someone has, it is just coincidence.

I've read conflicting reports as to whether or not there is a deeper affiliation between the USDT devs and Bitfinex management. I saw some posts claiming there was a parent company that owned both -- anyone know if this was definitively debunked?

I would tend to agree that the 65 million figure is a coincidence. But then we also have the coincidental timing of the unexpected complete buy back of all outstanding BFX tokens weeks (days?) before the fiat cutoff. I have also noticed that while Poloniex and others make clear you are trading in USDT, Bitfinex just lists everyting in USD, even though apparently this is all USDT.

The best hope is that the tether devs evasive comments are designed to keep them out of liberty reserve type legal trouble rather than cover up a fractional reserve.

Wind_FURY

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Quote from: monsanto on April 26, 2017, 01:25:49 AM

Quote from: Wind_FURY on April 23, 2017, 09:23:48 PM

Bitfinex says everything is fine and that they have enough funds to pay off all their customers. Is it because they have already made back the lost $65m that was hacked from their exchange?

How did they make it back so quickly and where did the money that large come from?

Quote from: monsanto on April 22, 2017, 03:50:58 PM

Quote from: http://coinmarketcap.com/assets/tether/

Total Supply
64,950,871 USDT

seen here a field of 65 million tethers growing in their natural environment:

that should take care of any pesky auditing issues Wink

I'm not gonna claim tethers were involved... but it fits.

I do not think Bitfinex released and controls all the USDT in the market. But the amount of USDT in circulation and the hacked amount is remarkably weird. Maybe someone smart can connect the dots? Until someone has, it is just coincidence.

Xester

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Quote from: Wind_FURY on April 23, 2017, 09:23:48 PM

Bitfinex says everything is fine and that they have enough funds to pay off all their customers. Is it because they have already made back the lost $65m that was hacked from their exchange?

How did they make it back so quickly and where did the money that large come from?

There are many issues on that matters and it is circulating on the web. Some said that bitfinex was the culprit behind the loss of bitcoins in their site and they all charged it to the hackers. But possibly it is their plan to make use of those bitcoins as a capital and use it in their business before they return it to the owners. Such a nice plan and executed with precision that many have believed that it was really hacking and that bitfinex was really serious about their business.

This is one of the issues being thrown at bitfinex, I dont know if its true and so I leave the masses to decide what is the fact behind the events at bitfinex.

iamTom123

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Quote from: Wind_FURY on April 24, 2017, 11:19:30 PM

Quote from: alyssa85 on April 24, 2017, 02:42:36 PM

Quote from: franky1 on April 24, 2017, 02:00:36 AM

bitfinex did not get $65m from exchange fee profits.

they grabbed funding from https://bnktothefuture.com

£42.66m=$54.5m

and now using that to pay out to users in debt

but taking from peter to pay paul is also known as a ponzi. so dont think that bitfinex's finances/drama is over anytime soon

Good catch!

If this funding a loan that needs to be paid back with interest, or did they just sell shares in their business?

The terms are not clear because only the Bitfinex users are allowed to see the pitch. Are there Bitfinex users here who would like to explain and post more details about Bitfinex's pitch?

This can quite explain why Bitfinex was able to pay back all of its obligations to its members or customers when it was hacked last year. Many called it a very impressive feat and it may have boost the image of Bitfinex. But of course, we don't know the whole story behind such a move and this post above can be the right explanation. Well, it must also be a good move on the part of Bitfinex to raise money elsewhere where interest can be a good advantage. Let's see how Bitfinex can maintain its leadership in the cryptocurrency exchange business.

magneto

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Quote from: Wind_FURY on April 23, 2017, 09:23:48 PM

Bitfinex says everything is fine and that they have enough funds to pay off all their customers. Is it because they have already made back the lost $65m that was hacked from their exchange?

How did they make it back so quickly and where did the money that large come from?

Well, if the token you were talking about is BFX, then they made that back from trading fees.

It was made easier for them because the bitcoin price was rising and the debt they issued was in USD and carried no interest if i recall correctly. Bitcoin went from like $600 when the hack happened or something like that to nearly $1300 now.

They generate quite a lot of profits through their fees.

If you are not comfortable with the situation, simply cash out your USD by exchanging it to BTC. Bitcoin withdrawals are still up and running. But prepare to pay a premium for that.

monsanto

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..like bright metal on a sullen ground.

Quote from: Wind_FURY on April 23, 2017, 09:23:48 PM

Bitfinex says everything is fine and that they have enough funds to pay off all their customers. Is it because they have already made back the lost $65m that was hacked from their exchange?

How did they make it back so quickly and where did the money that large come from?

Quote from: monsanto on April 22, 2017, 03:50:58 PM

Quote from: http://coinmarketcap.com/assets/tether/

Total Supply
64,950,871 USDT

seen here a field of 65 million tethers growing in their natural environment:

that should take care of any pesky auditing issues Wink

I'm not gonna claim tethers were involved... but it fits.

Duzter

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Quote from: Wind_FURY on April 25, 2017, 09:18:14 PM

Quote from: ?? on ??

https://www.youtube.com/watch?v=RoxDg_dX4l8

That is a good video explaining things about Bitfinex's repayment plan. Thank you for posting. I will wait for others to comment on any weaknesses they see with their scheme.

Maybe the situation is not like MtGox but I am still skeptical. The lessons of MtGox is still as fresh as ever. Trust no one.

Their repayment plan seems quite promising, but when it comes to reality how things could happen in the right way is simply hopeless. Though they get millions through transaction service regularly a hack of their server is something which shows their lacking of security, which is much required while providing service related to bitcoin and digital currency.

Wind_FURY

legendary

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Quote from: ?? on ??

https://www.youtube.com/watch?v=RoxDg_dX4l8

That is a good video explaining things about Bitfinex's repayment plan. Thank you for posting. I will wait for others to comment on any weaknesses they see with their scheme.

Maybe the situation is not like MtGox but I am still skeptical. The lessons of MtGox is still as fresh as ever. Trust no one.

pooya87

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Quote from: foodstamps on April 24, 2017, 12:03:19 PM

Quote from: pooya87 on April 23, 2017, 11:49:18 PM

Quote from: ?? on ??

I'm sure they spend millions as well. It would take several years of 0.2% transaction fees to save up $65 million.

very interesting. i checked via https://data.bitcoinity.org/markets/volume/6m?c=c&exchange=bitfinex&t=b
and their total volume was $3,179,103.85 in the past 6 months and with 0.2% trading fee they can make $12,716.41 (an exchange take fee twice from the one making the order and the one filling it although fees may be different).

to make millions they had to have other ways of making money! margin trading fees, if that is a thing (i have never looked at it!), lending (if they have it), trading themselves on their own platform or other places, also they have altcoins too so we should consider those volumes too.

Your numbers are wrong. The data is in bitcoin, not fiat. 3,180,000 BTC volume in 6 months. This is a huge difference.

click on the link that i gave here, then scroll down a bit, under the chart there is a link on the right side saying export, that gives you the raw data in CSV or XLSX format and inside that there are two columns called Time and USD. that is why my total number which was calculated with that data is in USD.

Wind_FURY

legendary

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Quote from: alyssa85 on April 24, 2017, 02:42:36 PM

Quote from: franky1 on April 24, 2017, 02:00:36 AM

bitfinex did not get $65m from exchange fee profits.

they grabbed funding from https://bnktothefuture.com

£42.66m=$54.5m

and now using that to pay out to users in debt

but taking from peter to pay paul is also known as a ponzi. so dont think that bitfinex's finances/drama is over anytime soon

Good catch!

If this funding a loan that needs to be paid back with interest, or did they just sell shares in their business?

The terms are not clear because only the Bitfinex users are allowed to see the pitch. Are there Bitfinex users here who would like to explain and post more details about Bitfinex's pitch?

alyssa85

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Quote from: franky1 on April 24, 2017, 02:00:36 AM

bitfinex did not get $65m from exchange fee profits.

they grabbed funding from https://bnktothefuture.com

£42.66m=$54.5m

and now using that to pay out to users in debt

but taking from peter to pay paul is also known as a ponzi. so dont think that bitfinex's finances/drama is over anytime soon

Good catch!

If this funding a loan that needs to be paid back with interest, or did they just sell shares in their business?

BiTZeD

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They are really powerful and wealthy. I think they made way more than 65 millions of dollars in their whole existence. This may not be pocket money to them, but not really far.

megynacuna

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Quote from: ?? on ??

I think that Bitfinex didn't really get hacked and they were holding the coins till the price went up to the lower $1,000 level and they started to exchange the coins for fiat then exchanged the coins back when the price went lower.
It wouldn't require that much coins and that much of a crash if they know how to do it right and since they own an Exchange I am pretty sure that those people know how to trade without being noticed.

I'm tempted to agree with you pal, it's a likely possibility they were trying to hold on to it for value purpose so that they can sell now and pay less fiat for what was lost then in fiat equivalent, but until any concrete evidence we should just treat it as a likely possibility.

~Bitcoin~

legendary

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Yes it is true that they have got good funding from few investors after they got hacked but i am not quite confident on this claims. They may get hacked again and i don't gonna risk even a penny there. I also suggest others to not hold anything there, their Taiwanese bank have already pulled them out of bitfinex.

Topic: Was it really possible for Bitfinex to amass $65m from their issued tokens? (Read 1706 times)