Is Tether Just a Scam to Enrich Bitcoin Investors? | Hacker News Reader

Is Tether Just a Scam to Enrich Bitcoin Investors?

newrepublic.com

18 points40four12 comments

There have been a lot of accusations about the Tether/ Bitfinex relationship, and whether or not they are illicitly manipulating the bitcoin market. Considering the unprecedented bitcoin rally, the fact that Tether 'printed' 2 billion coins last week, and the rapidly approaching court date with the New York Attorney General, I found this article very informative.

I think the writing is good quality, nice to read. And it provides a detailed overview of the whole situation, and the history of how Tether came to this point.

> rapidly approaching court date with the New York Attorney General

OH MAN! I thought they settled already but I guess this is still on going. Do you have more details on this? I really think Bitfinex's defence is very weak and they could be charged with wire fraud and money laundering.

If what I hear is true then the drug cartels have been successfully using cryptocurrencies and bitfinex to allegedly launder their money and its participants and speculators may have played a role.

I expect many people to face the courts or head to jail.

Yeah, I'm not super well versed on this, I think they settled a separate issue a while ago you might be thinking of.

It's surprisingly hard to find info on this, buried in a bunch of crap to do with the bitcoin going nuts. I'll dig through my history I read something the other day. Maybe 'court date' wasn't the right thing, but some sort of deadline is soon, and they don't want to extend any more. Here's a few things

https://www.nasdaq.com/articles/tether-mints-record-2b-usdt-...

https://www.coindesk.com/nyag-tether-bitfinex-loan-documents...

https://finance.yahoo.com/news/york-attorney-general-bitfine...

I've been following this very carefully.

My popcorn is in the microwave and I believe that we may finally see the biggest comedy gold yet.

So, Bitcoin is a fiat currency. Not government-controled*, but still fiat (despite some Bitcoin evangelists preaching "Bitcoin is not a fiat currency!")

Now, Tether seems to be also a fiat currency not because it is backed by another fiat currency (US Dollars, but even then Tether will still be technically a pegged fiat currency) but because of the fait that it is backed by US Dollars.

Sounds about right. /s

* That I knew of, of course.

Well, when you can't exchange Tether for USD and they can print as much as they want, and everybody just takes their word that they have the cash backing up the 1:1 ratio which is volatile (when it shouldnt')

If it quacks like a duck, looks like a duck, it probably is a duck. But hey, I'm just a buttcoiner.

Yeah, you can exchange them for USD if you have a minimum transaction of $100,000 :)

wonder what would happen if you tried to do $100M...shouldn't be a problem, right?

Haha, good question. My guess is Tether Limited would very happy to collect their $100K in transaction fees and send you on your merry way.

https://tether.to/fees/

> everybody just takes their word that they have the cash backing up the 1:1 ratio

Most people dont care if they have full reserve. I dont care if there is full reserve at my bank. I care that there is enough reserves.

Banks dont base their entire operation on a lie that they have 100% reserves. And the exact reserves are audited.

Short answer, yes.

Long answer -- it's probably more complex than all that, but Tether has been a scam for a very long time.

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