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Comment by gws | Hacker News Reader

Don’t really get you guys saying Tether should be shut down… the big banks get routinely fined with much bigger fines for much bigger crimes, are we gonna shut them all down then? At least Tether did not steal from nor defraud anyone. Just as a random example: https://www.justice.gov/opa/pr/jpmorgan-chase-co-agrees-pay-...

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Tether did defraud people. They lied on their website, claiming a) audits (which they never completed a single one of) and b) 1:1 backing of each Tether with a dollar in the bank (which they didn't have).

You are right, they lied, and people could have been harmed if there were a “bank run” on Tether. But in practice there was not and nobody suffered any damage, zero, nada, nicht. While big banks got fined for actually taking money illegally out of people’s pockets and nobody said let’s shut them down

Just because something is built upon fraud doesn't mean it will face imminent collapse. Usually it's events that put notable financial pressure on institutions that reveal their underlying flaws. The extent of the fraud notionally influences how easily it will end up collapsing. Hence why Madoff was able to keep up his scandal for quite a long time.

> But in practice there was not and nobody suffered any damage, zero, nada, nicht.

So I guess its ok. Might as well pack it up and let them carry on with manipulation, lying and profiting. I don't get your rationale whatsoever.

It doesn’t make it okay, it just means it’s less bad than if there was actual harm.

Despite their lies, they were apparently able to meet their obligation to exchange tether for dollars for everyone who wanted it.

Bernie Madoff was able to do that for decades, too. Until he couldn’t.

I don't see where the GP poster wrote anything like "I guess its ok. Might as well pack it up and let them carry on with manipulation, lying and profiting." - could you quote the relevant passage? Did they edit their comment?

I did not edit :)

Wow with logic like that you're well cut out for a career in financial law

I think the difference is this is Tether's entire reason for existence. It's equivalent to Bernie Madoff.

Still there have been zero redemption issues in getting USD back from USDT

Bernie Madoff was also able to handle withdrawls from his fund to a limited extent prior to its collapse.

Also, are there entities redeeming USDT into USD? Or does it always involve intermediary crypto? (I am not actually familiar with the extent of cryptoexchanges out there that deal with fiat, so genuinely curious.)

Haha, what? Maybe if you're an institutional investor or whale (or another exchange is doing something for you), but for several years the closest thing Tether had to a redemption "policy" (beyond the fine print that said they had zero obligation to redeem) was:

* Only for holdings of over $30,000

* 90-180 day waiting period

* non-US nationals

It was so bad, that people put out bounties for anyone who could prove that Tether or Bitfinex (whatever, they're the same) had redeemed USDT. I believe one bounty was in the order of $5,000.

The ones I found were unclaimed.

I had a thought… what if Satoshi Nakamoto was… Bernie Madoff?

Maybe Bernie Madoff and Hal Finney working together?

that's a stupid thought

Why aren’t you against both big banks and Tether doing it?

Big banks operate under regulation and oversight, not from financial havens, don't have CEOs (sorry deputy CEOs) who give interviews from gaming chairs and who aren't aware on what banking license their bank holds (actual quote: "There are actually two banking licenses here, one is... I forget the name, but that's the one I think we have. The other is the one everyone is talking about. We might also have that, too."

Will reply here rather than in all the sub-threads: I’m not saying lying is good, I’m pointing my finger at the paradox that on one side everybody is scandalized that Tether is not shut down, on the other everybody is happy to keep their money with big institutions that are proven to be even worse.

Right, in my view HSBC laundering scandal was 100 times worse and they are still operating all over the world.

Tether defrauded almost 380 million dollars worth of peoples assets by claiming the rockets it issued could be redeemed for dollars.

And most of the banks should have been shut long ago.

Yeah. The truth is the entire banking system is running the exact same scam ad Tether. The only difference is the governments think banks are too important to allow the consequences of their actions to catch up with them. So whenever there's a bank run and there's no money in the bank, the government bails them out.

They should just bail Tether out too.

This suggestion runs counter to the US system of finance. The secret service was created to protect the value of the dollar against attempts like those made by tether. Why would the government today want to do a 180 and give up the power of the dollar? If there was another major collapse by messing with the crypto too abruptly, it would probably help establish the dollar for a while longer. I don’t think that such an event would be a bad thing for the global economy either.

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