Approx. 24 hours ago, Tether printed 1B $USDT out of thin air
whale-alert.io
whale-alert.io
Eventually, that's bound to catch up, but I suspect it's going to hurt a lot more than just those with crypto assets and hurt a lot of those without crypto assets, no?
What do you think would happen if you gave 1000 dollars to each person in America every month? I think a lot of good would come from that and not much bad.
Even if (printing and then) giving everybody $40K/yr caused, say, 40% inflation, anybody making under $100K/year would be better off. You actually wouldn’t need any taxes if the government just printed all money it needed, hopefully most of which is in the form of direct checks to all residents/citizens.
no, it's not a wealth tax. it's a cash tax. if you printed money and caused 100% inflation, that'll just cause every scarce asset (eg. houses, stocks, gold) to double in price. Since the rich hold most of their wealth in assets, not cash, I doubt it will be fair or progressive.
This used to be true before we had computers and free fractional share purchases of course.
Houses aren't really either, it's the land that is. Thanks Henry George.
That doesn't make any sense. Stocks ultimately represent ownership in an enterprise that consists of people, equipment, and intellectual property. Those are scarce. Just because the ownership units is infinitely divisible, doesn't mean they aren't scarce. If people only bought stocks so they could hang a fancy certificate on their wall, you'd be right. But people don't do that, they buy stocks to get dibs on a certain fraction of future production. That's the scarce part.
>Houses aren't really either, it's the land that is. Thanks Henry George.
1. seems like a nitpick? When people talk buying "houses", they generally talk about buying the combo of house + land it sits on.
2. houses are still scarce[1]. we can't will infinite houses into existence. they're more plentiful than original picasso paintings, but that doesn't make them not scarce (at least according to the economic definition).
> If people only bought stocks so they could hang a fancy certificate on their wall, you'd be right.
This is highly underrated as a reason. What's the fundamental improvement in Gamestop and Tesla causing their stock price to go up this year?
See
https://www.bloomberg.com/opinion/articles/2021-10-25/elon-m...
https://en.wikipedia.org/wiki/Meme_stock
> 1. seems like a nitpick? When people talk buying "houses", they generally talk about buying the combo of house + land it sits on.
Many people don't seem to understand how to separate them, leading to beliefs like "luxury apartments cost more because they have granite countertops" and "gentrification can be prevented by not building new buildings". You can't build houses forever, but you sure can build many more of them than the US does right now.
If you're doing this in an above-board way, it's still scarce, because the whole reason why companies even issue new shares is to raise capital. When you're doing that, you're trading one scarce resource (capital) for shares, which means that the shares are also scarce. You can make an infinite amount of TVs given infinite raw materials, but TVs are still scarce.
>This is highly underrated as a reason. What's the fundamental improvement in Gamestop and Tesla causing their stock price to go up this year?
Any evidence that people bought exactly one share TSLA/GME just so they could hang on their wall and/or feel smug about it? In both cases it's far more likely they bought into it because of expectation of future profits (from greater fools or actual operating profits).
>Many people don't seem to understand how to separate them, leading to beliefs like "luxury apartments cost more because they have granite countertops" and "gentrification can be prevented by not building new buildings". You can't build houses forever, but you sure can build many more of them than the US does right now.
While there might certainly be people who think the housing crisis is caused by "developers only building luxury condos" or whatever, I doubt this is a popular view on HN. Any time a housing-related thread shows up on HN, that explanation almost never shows up, and the NIMBY/zoning explanation almost always does. I'm sure a decade+ member like yourself can see this. Therefore I don't really see much point in arguing this distinction, because you'd be preaching to the choir.
If the economy is running at capacity and you wanted a UBI taxes would have to increase to prevent inflation. This would end up being wealth redistribution.
All fiscal policy is monetary policy; government spending its own fiat is money creation.
UBI is expansionary monetary policy. (Of course, it can be offset with money destruction, e.g., taxation.)
In this case, what fool would make bread when they can get $1000 by sitting around and smoking weed?
Here something that'd happen - the homeless in encampments would get hoovered up by slumlords who put them in squalor and consume their $1k checks. Poor people would have more children because each child = $1k/mo, even if they have to wait 18 years. Abduction would be easy - the ransom pays itself over time. Fraud would be rampant. The ultra poor underclass who are undocumented would still get nothing, further exacerbating the divide.
Do we have any evidence that abduction and fraud is rampant in countries in Western Europe, known for the very generous social programs? Are they exploding with poor people having kids??? Is it dangerous to live in, idk, Sweden because someone is gonna kidnap you for your social bux? I’m genuinely asking because the notion of rampant abducting and child having hasn’t happened in countries I know of with very generous social programs.
"Poor people would have more children because each child = [$$$]"
A lot of poor people already do this for this exact reason.
"The ultra poor underclass who are undocumented would still get nothing"
Should a person be allowed to enter Japan, refuse to leave and then demand the Japanese people pay them $1k a month?
This is not correct. If you try minting coins, you can be shut down. You can buy and sell using whatever you want, yes. There aren't laws against using alternative currencies. But there very much are laws against creating them.
Grandparent comment is referring to the position that taxes are extracted via threat of force. This is an extremely emotionally fraught position, and it's difficult to discuss rationally.
So, the reasoning goes, if you have to tax to print money, it is done by resort to force or threat thereof.
As already seen with covid aid, people wouldn't work in low wage jobs any more. This would lead to inflation or disappearance of some amenities. E.g. you might have to put your groceries into your bag yourself, or might have to pay a dollar extra for that service. This isn't something negative though, just a neutral change I guess.
It would help a lot of poor and suffering people, but note that even in countries with good unemployment benefits, homeless people still exist.
What do you mean by “strict” and why is this inaginee5 to be necessary? Note that UBI is usually envisioned with a defined population but the absence of means or behavior testing within that population, either “citizens” or “citizens and LPRs” or “citizens and aliens with work authorization” or “citizens and aliens with satisfactory immigration status in a specific set of visa categories based on basis and duration” would all be valid populations, with wildly different impacts on the viability of UBI with any given immigration policy.
> I'm in favour of UBI, but note that it'd require extremely strict immigration policy as well as good enforcement of it,
COVID aid isn't like UBI, critically, key parts of it (enhanced unemployment) are conditioned on absence of work or reduction of it below pre-benefits levels, and thus forces people to choose between benefits and work. This is the kind of incentive with means tested benefits that UBI is intended to fix.
Plus I'd say it would be even more unfair for the undocumented immigrants than it is now because they would not get any UBI. But if you gave UBI to the undocumented, way more people would attempt to become undocumented immigrants, by overstaying their visas, etc. Which then probably will lead to you having to issue less short term visas, or actually deporting undocumented immigrants.
It also didn't create new money insofar as it was used to pay existing debts like rent; what it did was avoid a financial crisis.
Other kind of aid designs don't do this very much; demand is infinite and won't go away if you give people some money.
Now if it came out of thin air, right from the printing presses, a whole lotta hurt of inflation
Marking arbitrary large numbers in digital ledgers, blockchain or otherwise, does not cause prosperity. When everyone has infinite money, no one has any money at all, they just have their things.
“If you would allow me to continue..."
Ford nodded dejectedly.
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.”
-Douglas Adams, The Restaurant at the End of the Universe
https://www.goodreads.com/quotes/685739-if-the-management-co...
Who thinks Tether is sustainable?
Tether is just someone with digital Monopoly (game) money basically.
Tether: hold my beer
At what point did people claim that "price manipulation of [bitcoin]" was "impossible"? I think you're mistaking "price manipulation" with "dilution" (eg. quantitative easing or debasing).
Satoshi intended certain principles with the creation of bitcoin, but these are not the predominant driver of its use in actuality.
that's not what most people mean by principled. Also, in that sense, crypto also has principles in that most altcoins are built on ethereum, which also has algorithmic constraints.
Ethereum's algorithmic constraints are merely algorithmic constraints that can be changed easily, whereas bitcoin's key algorithmic constraints also are actually principles; changing them results in a non-bitcoin fork.
edit: ok the other "principle" might be that all (most?) cryptocurrencies are independent from government, they are owned and managed by individuals, companies and groups of people/devices (if you're lucky).
or maybe the crypto community isn't a monolith, and all the cryptoanarchists aren't the people who hold/support tether?
They appear to all be playing by the rules Tether is setting.
What makes you sure that at least some of the "tether is a scam (or is at least shady)" people aren't also crypto "participants"?
>They appear to all be playing by the rules Tether is setting.
Or maybe they're voting with their feet and moving to an exchange that doesn't deal in USDT, and so won't be subject to tether's rules?
I imagine there are many people that believe in crypto and participate in the markets, but dislike that Tether is behaving like the fiat central bankers they abhor so much.
> Or maybe they're voting with their feet and moving to an exchange that doesn't deal in USDT, and so won't be subject to tether's rules?
Unbacked Tether inflates the price of any coin that it's used to purchase, so what you're describing would have no effect. When Tether's $1bn pump pushes up BTC's price from it's 20% overnight decline, are the theoretical USDT-free exchanges going to reflect bid/ask prices as they were pre-pump? Of course not.
There isn't really such a think.
There are many crypto currencies with different goals and approaches to handling market dynamics. And there are some where doing such a think is fully against there principles and would brake their marked dynamics. But not necessary for other reasons. But this also means you need to look at the specific crypto system in question to decide why it might or might not work.
I don't know much about Tether specifically, but lets say you have a new arbitrary crypto currency you try to make price stable, but like many crypto currencies it end up having deflationary tendencies (more demand, money getting "locked" in, etc.). In which case minting new coins would not only be sustainable but likely necessary.
For the most part the crypto market being unregulated means that there can't be any consequences, except for market consequences. And market consequences are vaaaaastly worse. It's basically like having no one make you wear a seat belt. Sure seems fine until you're just dead.
Tether and bitcoin have been very robust, bitcoin has crashed and recovered many times now. But I have to say that every single bubble has involved the statement "so far, they've been right." as the follow-up to "this time things are different".
The problem is when the music stops and there's a run on crypto. People are trying to get out of $USDT and convert it into cash. Exchanges have to have buyers of $USDT so they can exchange $USDT back into cash for anyone that wants to. But they can't just create dollars out of thin air. If there's no buyers for $USDT anymore than the "currency" flatlines, it's no longer tied to the dollar.
If Tether were truly backed 1:1, Tether itself could just buy $USDT with its own cash on any exchange, and that would be enough to keep their currency afloat and stop the run.
There seems to be almost no scenario where USDT becomes more valuable than the USD, and the worst case is it continues to be worth the same.
But there is a fair probability it becomes worthless, meaning that you gain from it.
While you need to pay premiums in the interim, for something with an indefinite timeframe, that risk seems fairly minor for the potential reward.
>While you need to pay premiums in the interim, for something with an indefinite timeframe, that risk seems fairly minor for the potential reward.
1. the chance of collapse might be lower than you think. the "tether is going to collapse any day now" sentiment has been around for years now, but collapse has proved elusive.
2. borrowing costs are high. I searched around and it looks like the APY for lending out tether is around 9%. The cost for borrowing tether is certainly higher. If you held a $100 short position for 5 years, and there was a total collapse at the end of year 5, then you'd make $65 (factoring in interest payments). That sounds good, but chances are thether probably has more money in the bank than $0. If it only collapsed to $60 (ie. they went bankrupt but had 60 cents of real money for every dollar issued), then you'd only make $5.
3. there are rumors/conspiracy theories that tether/bitfinex/tether affiliated exchanges force USDT/USD rates up periodically to force liquidation of tether short sellers. If you're caught in one, you'd lose money and be forced to rebuy tethers at an unfavorable price.
[0] https://compound.finance/markets/USDT
[1] https://app.aave.com/#/reserve-overview/0xdac17f958d2ee523a2...
Remember Folks: Don't short Tether, once the exchange leaks your position to their buddies, Bitfinex shareholders will organize to liquidate you by working with their wash trading bots.
You have a database entry showing that you have a large amount of winnings that you can see on your screen.
You are going to have to deal with corrupt human beings on other end, who are outside of your jurisdiction, and are assuming they are just going to wire your bank account money based on that database entry, when you have no leverage over them at all, and when they will be better able to see the writing on the wall than you do.
Even within your jurisdiction, for something like Coinbase, if it becomes completely insolvent then you become an unsecured creditor in the bankruptcy liquidation process.
You'll be stuck yelling into the ether making twitter posts shaming them for not wiring you your winnings. And whatever actual cash you sent them to make those bets will be long gone and you'll lose everything.
Even assuming you could find some form of betting market outside of the crypto exchanges to place bets with other people that Tether would collapse the interest you have to pay should more than offset the eventual winnings. This is similar to how using options for portfolio insurance is a poor idea because by the time you're worried about your portfolio losing value everyone else can see the issue as well and wants a premium to write you that insurance.
And there's no sure bet that Tether/crypto collapses in the near term. I suspect that crypto will likely pop to a new bubble blow-off peak in 2022 and then 2022/2023 there will be another systemic test of crypto that could lead to its failure. But there's many billionaires with a vested interest in seeing the game continue who will do whatever they can to kick the can further down the road. I thought that it would fail in 2018 and was wrong (but the transcripts with bitfinex showed that it was probably on the brink). You could wind up betting Tether collapses for so long that by the time it finally does you've spent more on those bets than you've won back.
They are profiting from all of the tether FUD nonsense by being able to lend their coins at a higher rate.
Some might say that FDIC made the banks super rich -- it wasn't the services that made the banks profitable, as it was the bank had a sudden and large influx of government backed cash to make loans from.
In the US, it's not just reserves it's that 95% of account holders will be FDIC insured. And because the accounts are insured, there's rigorous banking regulations around the bank so FDIC doesn't have to pay out constantly.
So at what point does a run on $USDT happen? When the Chinese commercial paper market goes belly up? When they bitfinex files for bankruptcy or is charged with RICO? Sure there's a lot of FUD but if you read the tea leaves, I think China already sees systemic risk.
Tether has been manipulating the market since 2018 through using wash sales to prop up the price through apparent demand.
Tether has most of its liabilities backed with unsecured commercial paper from China.
China has had issues with their real estate companies being in too much debt and offering too much commercial paper to keep them running day to day.
China also has moved against crypto currencies recently, and regulating the real estate companies to move forward to pay back their debt.
So this strikes me as systemic risk. If USDT goes, so does the Chinese Commercial Paper Market, and vice versa. Who knows what gets taken out at that point. Tesla? Coinbase? Nvidia and AMD for losing sales to mining rigs? I don't know.
https://whale-alert.io/transaction/bitcoin/be11f0e7c040a3f5c...
https://whale-alert.io/transaction/bitcoin/28bfa6497df054f42...
someone has been moving the same number of bitcoin between wallets like hot potato between wallets, about $730 million dollars. Why?
this is after about transfer of various wallets... lets see if it keeps going. Seems like someone is trying to tumble their $740 million btc...
More USDT got issued because there was opportunity to make 0.1-0.2% on each new USDT since demand for it was that high (i.e. people were paying real USD to buy USDT at a premium, imagine that).
USDT (and USDC) demand spikes during crypto crashes because people actually cash out to these instruments because they are so widely used and trusted by actual market players. People aren't cashing out of crypto ecosystem during most crashes, money actually stays in crypto networks.
This is not contrary to popular belief at all. Tether almost always prints a few billion around large pullbacks, and the cynical view is that this is to stabilize markets by buying the dip.
> More USDT got issued because there was opportunity to make 0.1-0.2% on each new USDT since demand for it was that high (i.e. people were paying real USD to buy USDT at a premium, imagine that).
Uh yeah this is not at all how stablecoin premia get arbed. If you'd like a real answer, I'd be happy to explain. But I get the feeling that you're pretty invested in crypto and just want answers which align with your beliefs.
I do consider to know what I am talking about, considering my systems make hefty profits and have no real exposure to volatile crypto assets (or even long term exposure to crypto in general, my profits are in real world dollars). This is why I know that USDT has actual real utility and it is currently best instrument in its category. USDT is indeed somewhat shady but it’s premise and utility are all sensible and it is hugely profitable for its founders. They have zero reasons or incentives to do suspect things that could risk its peg.
If something goes horribly wrong for USDT it is going to be due to incompetence and not because of some long term planned con.
> This is why I know that USDT has actual real utility and it is currently best instrument in its category.
I don't disagree at all.
> If something goes horribly wrong for USDT it is going to be due to incompetence and not because of some long term planned con.
You can't be serious...
On which exchanges do you trade and do you rely on volume discounts to make profit?
> Tips on adding JSON output to your CLI app (kellybrazil.com)
> 67 points by kbrazil 3 hours ago | flag | hide | 21 comments
Current #4 was submitted at the same time, but has 36% of the votes, and 13% of the comment activity. I'm no expert, but that sort of engagement you'd expect to be punching above the current #4.
What gives @dang?
> You can't derive rank from votes and time alone. See "How are stories ranked?" above.
> How are stories ranked?
> The basic algorithm divides points by a power of the time since a story was submitted. Comments in threads are ranked the same way.
> Other factors affecting rank include user flags, anti-abuse software, software which demotes overheated discussions, account or site weighting, and moderator action.
https://news.ycombinator.com/newsfaq.html
I'm guessing this fell under the "overheated discussions" bucket.
1. 1 billion is just 1.33% of the total USD Tether has issued.
2. USDC also issued 1bn in the last 24 hours.
And $2 billion USDT
Source: https://twitter.com/LucaLand97/status/1467591656870494210?s=...
Source for USDC prints: https://twitter.com/usdcoinprinter
Circle has absolutely never been audited. Circle, like Tether, has published attestations, which do not remotely approach the thoroughness of an audit.
You're making massive leap in logic. I completely agree with you. Regulators have been absurdly slow to react, and I think that both Circle and Tether will probably end up just fine, at least legally. There may be a cataclysmic breaking of the peg but ultimately it will be retail that gets slaughtered. Tether's own terms from day 1 have basically told you that all you're getting from them is something that hopefully someone else will value for close to $1.
I think these guys are pretty iron clad. Doesn't change the fact that Tether has almost certainly played a key role in manipulating crypto higher, on the mild end by providing leverage through crypto collateralized loans, and at the serious end by outright fraudulently printing Tether.
Circle is not a sketchy Eastern European or Caribbean operation. They have a big office in Boston across the street from the Federal Bank of Boston and employ highly paid people who wouldn’t jeopardize their careers. The FUD is just ludicrous.
Because being shady isn't illegal? You're the one suggesting this might amount to something felonious, which is perhaps telling.
> They have a big office in Boston across the street from the Federal Bank of Boston and employ highly paid people who wouldn’t jeopardize their careers.
This is a terrible argument. I have worked with people who were highly paid people working for well connected shops in fancy offices (Enron, Lehman, etc).
> The FUD is just ludicrous.
What FUD? Point to a single thing I've said that isn't purely factual.
Given the purported 1:1 peg with the USD, there is no advantage to holding any cash savings in USD[C|T] form.
I have had returns that are simply unmatched by any savings account, the liquidity pools with stabletokens help to reduce a lot of the volatility while generating some income from the collected fees, and if I there is any big downswings, I don't need to rush to cash out because most of my holdings are in stables.
I know that I don't want to touch Tether, but if USDC is also deemed toxic, it forces me to reevaluate the risks of both USDC and DAI (which is basically 50% backed by USDC currently)
It's worth pointing out that most pools with USDC on curve also expose you to USDT.
But to be completely honest, I am not on this anymore. I moved to the EURS/sEURS based one, as the CRV incentives are very good at the moment. Seeing how I was wrong about Circle status regarding audits, I need to do some more checks about the bank behind EURS.
Stablecoin returns aren't a miracle - you are effectively lending money to these organisations and taking on associated credit risk. For example there are many small banks around the world that will pay > 3% APR on USD deposits [1]
https://nomadcapitalist.com/finance/highest-interest-rates-b...
[0] https://www.treasury.gov/resource-center/data-chart-center/i...
CeFi platforms like Celsius or BlockFi can offer more, but they are just as risky as any unregulated sub-prime lender in a third-world country (eg micro-lending institutions can offer those sorts of yields too).
The reason DeFi loans are much lower yield than CeFi loans is precisely because the risk is on-chain in the former case, so deposits can't be stolen.
Not sure where you see 20-30% on USD? Those rates are an indication of a rug-pull scam or a ponzi imho.
You are also open to smart contract risk in Uniswap from your other comment, but they also have been around a very long time.
I wouldn’t worry about USDC, I would worry about everything surrounding it in the defi ecosystem.
Nonetheless, they have been done by independent third-parties who are a lot more reputed than whatever has actually managed to look into Tether's data. Even if you take the "attestation" done by Tether at face value, it showed a mix of assets that is absolutely unhealthy.
> Nonetheless, they have been done by independent third-parties who are a lot more reputed than whatever has actually managed to look into Tether's data.
Like the New York Attorney General? Go read the NYAG settlement. Tether got an attestation by wiring in $850m of Bitfinex's cash to their account the morning before an attestation, and then wiring it back to Bitfinex immediately after. The attestations merely state certain very shallow facts like "at this point in time, there were $X assets in an account". They do not audit the source and ultimate ownership of those things.
Look man, I get that you want someone to pump your bags. But sometimes it's best to just bite your tongue. Tether doesn't have any defense. They may be totally legit, and if they are, it's totally indefensible to act this way. And if they're not legit, well...
I am not defending Tether, quite the opposite. My only argument is in favor of Circle, and even then admittedly in terms of "Circle at least provides a better sense of legitimacy".
> I get that you want someone to pump your bags.
Sure, I will make a fortune by shilling USDC. /s
Anyway, you are right. I was under the impression that Circle was doing proper audits, and if that is not true, we need more people and exchanges pressuring them to do or to stop using it.
My bad, lost my sense of bearing in a Tether thread. I agree with you here, and for the blockchain work I do, I use USDC.
Appreciate the rest of your comments. Didn't mean to jump on you.
- A year ago 1B USDT would have been more than 5% of it's market cap.
- A year ago 1B USDC would have been 33% of it's market cap, today it is 2.5%.
A lot of stablecoin mintage has occurred over the past year.
They have become so brazen, that they will just keep printing billions without any audit or insight into their holdings.
Their last attestation published a few days ago (by them, not by any independent firm) raises more questions than answers: https://twitter.com/dee_bosa/status/1466826912781590529
They barely have any backing in actual USD and are very suspect in the commercial paper holdings
They have a CTO who regularly engages in snarky comments when asked about their holdings: https://twitter.com/paoloardoino
They have a CFO who has a very very checkered past: https://www.ft.com/content/4da3060c-8e1a-439f-a1d7-a6a4688ad...
Tether has regularly been sued and settled, never won.
CFTC: https://www.cftc.gov/PressRoom/PressReleases/8450-21
NYAG: https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle...
DOJ: https://www.bloomberg.com/news/articles/2021-07-26/tether-ex...
Moreover, they roped in a nation state (El Salvador) to issue bonds that fund El Salvador’s Bitcoin City to be issued on Blockstream’s Liquid Network and processed by iFinex, the controversial company behind Tether.
https://blockworks.co/el-salvador-plans-bitcoin-city-funded-...
To add to that, the SEC denied creation of VanEck’s bitcoin-backed ETF because of risks associated with Tether
https://www.ft.com/content/77bc7296-9bd4-4ea4-bab9-91cee789e...
From the article: "Among the concerns the SEC raised in the disapproval order included possible “wash trading”, when the same institution is on both sides of the trade, generating extra fees for minimal risk; potential price manipulation by whales who dominate bitcoin; and possible “manipulative activity involving the purported ‘stablecoin’ Tether”.
The list keeps going on and on and on...
"PSA: 1B USDt inventory replenish on Tron Network. Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps."
The tether CTO routinely comments on these seemingly large moves because people get very worked up about them.
Why does tether seem to bring out the tinfoil theories from people that have absolutely 0 background in finance or crypto market structure or econ in general.
This makes it pretty obvious that you're not arguing in good faith. I guess you would have given Steven Hatfill or Wen Ho Lee the same advice?
There's no good faith argument to be had. It's just a matter of fact.
You must be joking. That's not how it works when the government has you in their crosshairs.
>and it's usually just easier to say "here's the evidence, we're not guilty".
And then the government will spend years and millions of dollars trying to poke holes in that evidence of innocence.
Anyone who follows the news has seen this repeated over and over again. Various government authorities routinely engage in witch hunts with little evidence.
Maybe Mansoor Adayfi should've just provided evidence of his innocence after being shipped to Guantanamo Bay? They would have immediately released him, right? What a stupid guy he must have been that it took the government 14 years to release him.
You only see the bad. You say "anyone who follows the news" which means you've probably followed a handful of these...out of the millions of cases which get referred to prosecutors: the vast majority are ignored, the remainder are mostly settled, and a small amount end up in court. Government is a necessary evil, but an evil nonetheless. I'm quite libertarian myself, but let's not concoct ridiculous narratives to affirm our views.
Even in an imaginary world where Tether is a completely legitimate business not operating in violation of any existing laws, there would be no way for them to make government investigations go away within any reasonable timeframe.
It is simply ridiculous of you to suggest that we could expect the government to play fair when dealing with Tether.
> there would be no way for them to make government investigations go away within any reasonable timeframe.
Yes, this is usually the problem with breaking the law (such as facilitating large scale money laundering). You seem to believe this is a bug, while every other citizen views this as a feature.
People breaking the law cannot making investigations go away. And?
I am obviously not defending Tether, I do not have a single good thing to say about Tether. But unlike you seem to be, I'm not emotionally invested in what happens to Tether.
I was simply calling out the obvious bad faith argument presented by wmf. Even if Tether isn't violating any laws, the US government is going to go out of their way to get them.
>You seem to believe this is a bug, while every other citizen views this as a feature.
I have said precisely nothing that could be interpreted by a person of ordinary intelligence to suggest such a belief. This is something you have created inside your own head. I wonder why?
Cool, let's just leave it then. I don't give two shits about Tether. In fact, I really hope it's legit. I don't want to see people get burned.
Hilarious. People with backgrounds in finance are for the most part the group of people that have made an issue about this, myself included.
But more curiously, I'm not even sure what you're attempting to to convey with this comment? Do you think that a background in finance, or econ, is necessary to understand the incredibly simple business that Tether operates, and the even simpler reasons of why it is likely problematic (if not an outright fraud)?
The problem with tether is a lot of crypto use it as sort of an "on-chain peg" and some people trade "real value crypto" (bitcoin) for tether. It's not a problem until the actual tether holders can't cash out to fiat.
The secondary effect is that tether may be pumping the price of all crypto everywhere because it's so ubiquitous.
Do I have this right? I'm mostly stuck on the "value" of tether beyond some sort of "accounting" or "tax avoidance" (no judgement here, trying to figure out why ppl would have tether's instead of "actual crypto".
It's just a way to buy and sell crypto with an intermediate asset that has almost no price volatility.
I assume people in the banking industry allow them to operate as a way to hold leverage over the crypto markets and absorb capital that would otherwise flow to altcoins.
It really isn't counterfeiting. If you made fake hundred dollar bills and passed them off, that'll be counterfeiting. However, if you decided to give a bunch of people $100 IOUs and claim they're "totally backed by real dollars in a vault somewhere", but they're not, then it's just fraud. The NY AG and/or CFPB were able to prosecute/fine them for that, but they also got rid of the "totally backed by real dollars in a vault somewhere" claim, so whether they're currently committing fraud is unclear.
Tether is just an IOU note. I don't have problems with IOU notes, unless someone forces me to use them. Personally I haven't used tether and probably never will, however I don't have any problem if someone else wants to use it.
This happens every time the price dips, but the current best explanation/theory is that Tether prints more USDT with BTC backing from exchanges, who then use that USDT to buy BTC from the market. The issue is that the exchange is part of that loop.
Yesterday cryptos crashed hard, people started moving out of their crypto positions and into stablecoins. Demand for stablecoins increased bringing their price > $1. Tether printed USDT and exchanged them for USD (and put the USD into their reserves) in order to bring the price down and maintain the peg. When the opposite happens they will sell some of their USD reserves for USDT.
They wait to peg only for nice round numbers like $1B exactly? No cents? No decimal?
They don't peg end-of-day, or at market-close, month or quarter end?
Is there an official financial notification of peg events like a crypto-currency corporate event calendar? Nobody should be surprised because pegging is telescoped ahead right?
Is there an offset in another block chain showing USD movement? Surely they didn't just phone the bank (broker) and do a regular ACH transfer, right? They used non main stream tooling cause they're the cool kids?
And where's proof USD moved in offset?
C'mon ... there's nothing here to take seriously. Heck, based on this nonsense I can peg USD out of my garage with carrots. Wanna know what? Wholefoods produce then straight to the keyboard. See you guys on the flip side with CyrptoCarrots, the organic sustainable cyrpto coin.
0. Mint dollars backed by nukes and military and in anticipation of GDP growth
1. Create new cryptos out of thin air to suck in dollars
2. Mint USDT in *anticipation* of swaps from non-stable cryptos. No dollars have actually been deposited yet!
3. USDTs actually come in? maybe, maybe not, maybe fuck yourself.
4. Loan out USDT to hedge funds for crypto futures trading.
5. Give back portion of interest to people who stashed the USDT.
2. does the federal government even hold a trademark on "USD"?
I don't think anyone genuinely believes this. But as long as everyone knows the game, but the peg holds and their bags are pumped, then nobody cares.
Just had a look on r/crytpocurrency and they all seem to realise it's BS and a huge risk to the market.
So all arbitrageurs, market makers, etc, transfer USDT between different entities through TRC20 network. USDT on TRC20 started to increase only after Ethereum gas fees got ridiculously high and it became too expensive to use even for pretty high volume market makers.
Also, market makers moving Tether around do not give two shits about $60 in gas fees or whatever. Additionally, a huge amount of Tether has gone into DeFi on Ethereum and L2s (or bridged to newer L1s, which typically don't have a Tron bridge).
Ethereum was dominating TRON until very recently and this does have to do with huge increases in Gas prices on Ethereum
My take on all of it is that the tether doomers have no idea what they’re talking about. Even the UT finance professors’ charts can be explained by the simple idea that people that made a lot of money in crypto wanted to take some of it off the table.
If you are confident that is exactly what happened, why don't you go and short USDT/USD pair? Why no insider executed that profitable short trade? How come after so many years of tireless accusations on every message board available, that 99% of people seem to agree with, said pair still trades at exact 1.000 ratio? Why authorities have not stopped the obvious fraud going on for so long?
Something doesn't add up.
https://coinmarketcap.com/currencies/usd-coin/
https://coinmarketcap.com/currencies/tether/
Tether's market cap - or dollar supply goes from 72 to 75B - up 3B USD.
USD Coin (related to Circle and Coinbase) goes from 34B to 41B - up 6B USD.
Auditors quitting is never a good sign.
https://www.coindesk.com/markets/2018/01/27/tether-confirms-...
From the very same article: "Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame."
Even Friedman LLP says in the internal memo “Do not rely on this report”.
It's been almost 4 years since that and no independent firm has ever audited Tether.
> In addition to market integrity, investor protection, and illicit finance concerns, the potential for the increased use of stablecoins as a means of payment raises a range of prudential concerns. If stablecoin issuers do not honor a request to redeem a stablecoin, or if users lose confidence in a stablecoin issuer’s ability to honor such a request, runs on the arrangement could occur that may result in harm to users and the broader financial system. Further, to the extent stablecoins are widely used to facilitate payments, disruptions to the payment chain that allows stablecoins to be transferred among users could lead to a loss of payments efficiency and safety and undermine the functioning of the broader economy. The potential for stablecoin arrangements to scale rapidly raises additional issues related to systemic risk and concentration of economic power.
I see this as the government equivalent of shouting from the rooftops. It's just a shame no one will treat it that way.
https://home.treasury.gov/system/files/136/StableCoinReport_...
Minting is the first step in the process.
.
"Or is the "out of thin air" part just means normal minting?"
There is no normal minting with a coin that claims to be verifiably one to one backed by hard assets.
When people sell other crypto for tether/USDC, they are essentially “buying” tether/USDC. Which tether and circle “print” out of thin air… but ostensibly back by selling the other crypto they just received for real dollars.
With the huge crash, a lot of people were selling their crypto.
You're missing the previous links in the chain. When you sell your crypto at an exchange, your counterparty isn't the exchange, it's another person who wants to buy crypto. Therefore you making the trade doesn't cause new USDT to be printed. That happens before the trade, when your counterparty made the deposit.
Money flowing into the cryptocurrency ecosystem causes tethers to be printed; money flowing out causes it to be destroyed. If people were all simultaneously cashing out (on net), it would stand to reason that tethers be destroyed, not issued.
It's truly scary how much confidence people have in topics they do not understand.
>And when people bought my tethers for crypto
now you have 1 BTC, and $49,995 (assuming $10 spread and you were a maker) USDT (aka IOUs) outstanding
>I’d turn around and sell the crypto for usd
now you have 0 BTC, $49,995 USDT outstanding, and $50,005 (assuming $10 spread and you were a maker)
From a balance sheet point of view that looks like a pretty standard market making operation. You don't need to be issuing unbacked IOUs for it to work. The only advantage that tether has is access to the initial $50k capital for market making, but you don't need to be a stablecoin issuer to pull this off. You could just as well embezzle an exchange's funds directly.
Actually come to think of it, if you wanted to market make and you were ifinex/tether, the biggest advantage you can get isn't the free funds you can issue/embezzle, it's the differentiated order flow you can get as an exchange operator. You can categorize order flows as toxic/non-toxic[1] (maybe based on account trading history?), and keep them for yourself to internalize.
Who are currently the biggest holders? Lots of different random individuals? All the people who have deposited cash into an exchange but haven't bought bitcoin yet/people who have sold bitcoin on an exchange, and haven't cashed out for USD yet? Institutions, if so which ones?
Where does it tend to pool up?
Are there any studies of where most of it sits?
We’re living through an interesting piece of history here, that’s for sure.
However, it will become harder to get various government-type currencies in to exchanges so presumably purchasing demand will fall, which seems like it would make crypto prices fall too.
FTX and Binance among biggest customers. Likely offering commercial paper to Tether in exchange for the USDT. Already established that Tether made crypto backed USDT loans to Celsius.
Here’s Tether’s customers:
https://protos.com/tether-papers-crypto-stablecoin-usdt-inve...
On the other hand, the market cap is 75B, while ETH is 488B and BTC is 919B. So the impact maybe wouldn't be too drastic and too long lasting.
I wonder if it's worth converting USDC and DAI loans to USDT, would be easier to repay if it did crash..
70% of the crypto volume is in USDT.
From 2020 (should still hold): https://coingape.com/tether-dominates-exchange-trading-with-...
If Tether collapses, so does USDT. If exchanges have majority of their volume in USDT pairs, then the market liquidity dries up and the whole thing collapse. Remember that those coins need to be cashed out for actual USD. But if that USD does not actually exist, what will you sell into?
Still, it needs to happen. Keeping Tether alive is the worst thing that can happen to crypto.
Exactly. The next big crypto crash is waiting to happen. Will probably come from the debt ceiling crisis with the US then cracking down on Tether afterwards with the US government also collecting unrealised capital gains taxes; enough to scare the hands out of lots of investors.
Tether knows they are a scam. So they are getting out while they can.
Tether is a huge component of the daily traded float in BTC. If tether was no longer accepted at $1, there's a lot less money chasing BTC.
These markets wil be around forever, but much less attractive when people start to see past the Hype.
Tether is used to buy Bitcoin and other cryptos. As you correctly observed. But:
Tether ≠ Bitcoin.
Tether FUD = get rid of Tether.
The only thing that could dent Bitcoin, as in making it dip, would be if potential buyers withdrew Tether instead of doing the logical thing, which is to buy Bitcoin. The most likely outcome is that the “dent” results in a blow off top scenario, meaning that price would surge before a sell-off.
As for “over optimistic;” people have been saying that since Bitcoin was a dollar, and possibly before that too.
https://acaa.org.uk/blog/frozen-assets-and-freezing-temperat...
The threat of devastation works better on countries that aren't already completely devastated by decades of internecine conflict anyway. It also works better against the non-theocratic adversaries that are legitimately concerned for their own corporeal wellbeing (Qaddafi, Saddam, KJU, Assad).
.. Right?
(side-ways glance) how do we short this?
"Otherwise please use the original title, unless it is misleading or linkbait; don't editorialize."
https://news.ycombinator.com/newsguidelines.html
And there is zero evidence that the editorialized title is true.
I feel like i’m taking crazy pills.
If that quantity of Tether (1/75 of the float) were dumped into the open market for USD, you'd expect to see the USD change rate fall. That clearly hasn't happened. The rate has been very close to 1:1 forever.
There's this unsubstantiated conspiracy theory that as I gather goes like this: Tether prints tokens, uses them to buy bitcoin when the USDBTC exchange rate falls. These Tether issuance spikes always happen after BTC corrections, and this is taken as evidence of pumping USDBTC.
The problem is that if there were legitimate buying of BTC with Tether, which is plausible after the ass-whooping USDBTC has taken recently, new Tether would need to be issued to keep the 1:1 peg.
Sources critical of Tether IMO don't provide the evidence needed to distinguish the two scenarios.
Can you explain in detail why new Tether would need to be issued?
Look, Tether is in all likelihood a scam that will eventually collapse. I'm just saying there are multiple ways to explain what's happening. Those making the claims have the burden of proof. And that proof has been rather thin for my taste.
Not if the small amount of people who want to redeem their Tethers for USD or vice versa are able to. Everyone else will happily trade at that rate as long as they feel confident what they own is equivalent to a dollar. The problem is if everyone suddenly wants their money back and it turns out it doesn't exist.
Um, no. Not sure how you think markets work, but this isn't right. Suggest you ask yourself if you really understand this topic, or if you own some crypto and thus have an incentive to believe you understand it so that you can dismiss it and enjoy the sweet crypto gainz.
I tried to set a buy order for Tether at less than $1 and the exchange (Kraken) would not let me, maybe that's why?