How is Tether used to buy Bitcoin

[Brendan Burgess]

Thanks Dazed

So if you sell today at 12 noon and Kraken pay by SEPA you should get it into your own bank account today, or maybe the next working day?

Brendan

 

[DazedInPontoon]

yes

 

[tecate]

As USDT issuance got into the billions, these claims came under heavy scrutiny. In March 2019, the company changed the backing of USDT to include loans to affiliate companies.

In 2019, the Americans froze Bitfinex assets held in a third party financial services company. That is the reason that Bitfinex were backed into a corner and made these changes. This meant that rather than a complete 1:1 backing, reserves were reduced to 70%.

 

[Brendan Burgess]

Hi tecate

Do you use USDT ?

Do you trust them?

Brendan

 

[tecate]

Brendan,
I have used USDT in the past but fleetingly. My view is the same as with any centralised entity in this space - the default position is not to trust. There are folks in places like China who rely on them due to state controls on trading. Others use them as part of their trading strategy.
As per my previous post, I believe that they have nevertheless proved to be very useful to the sector up until now. However the sector is no longer 100% dependent on Bitfinex/Tether.

An interview with their CTO and General Counsel is about to be published. That should help to further inform this discussion. I'll post a link to it once its out.

 

[tecate]

@Brendan Burgess - Here is that interview with Paulo Ardoino (CTO @ Bitfinex) & Stuart Hoegner (General Counsel @ Bitfinex). LINK.
Clearly, this is their version of events. Somewhere between the two versions of events lies the truth. The current injunction restricting lending runs until January 15. It may be extended as has happened in the past. However, the interview does give folks a better understanding of how Tether works and the role that it plays.

 

[Duke of Marmalade]

Bold @tecate
This thread is about the practicalities of tether.
I'm 25 minutes through the interview. The interviewer is goo even though he stated upfront that he is "on their side". The amount of squirming "we don't comment on that" is telling.

 

[WolfeTone]

Thanks @tecate. Well after listening to that, I would not be endeared toward tether.

I thought their defence was reasonably robust until the question about how Bitcoin ends up in the basket of reserves.
Obviously I cannot confirm either way, but I would suspect that there may have been some underhanded manipulation, in some form, at some point, to obtain bitcoin through unbacked issued tether as per the allegations.

On the flip side, the extent of any underhanded play in manipulating the price of bitcoin is very unclear and may be impossible to gauge. The explanation of not having the ability to prognosticate when is the right time to buy in the bitcoin market is valid.

 

[Duke of Marmalade]

I hope this link is of practical interest: Tether is too big to fail
That piece is pure slander, if untrue. But the folk at Tether are above suing such folk.

We don’t believe in suing our critics into silence… we think it’s better to counter fiction with facts.

 

[tecate]

The amount of squirming "we don't comment on that" is telling.

Telling in that it doesn't tell anything! I mean, if you want to use that to prop up your bias, have at it.

I thought their defence was reasonably robust until the question about how Bitcoin ends up in the basket of reserves. Obviously I cannot confirm either way, but I would suspect that there may have been some underhanded manipulation, in some form, at some point, to obtain bitcoin through unbacked issued tether as per the allegations.

But like you say, nothing can be confirmed either way. They have not been able to answer the audit question fully for a long time. However, people have to realise that it may be for other reasons...not necessarily because they have unbacked tether on the market.

I hope this link is of practical interest: Tether is too big to fail
That piece is pure slander, if untrue. But the folk at Tether are above suing such folk.

Again, you're working with suppositions and nothing more. Expending resources on a no-coiner nobody (and his personal blog post) isn't likely to be energy well spent. I've not heard anyone suggest a 'too big to fail' argument insofar as thinking its Tether that's too big to fail. What I would say is that whilst you're licking your lips at the prospect and willing it on, know that whilst there might be some market correction, bitcoin will proceed onwards and not at $0 as you suspect.

 

[Duke of Marmalade]

@tecate That was quite a revealing link. The Italian guy, his name was Ponzi or something like that, seemed particularly shifty. This Deltech thing seems very dodgy.

 

[tecate]

@tecate That was quite a revealing link. The Italian guy, his name was Ponzi or something like that, seemed particularly shifty.

Thank you for that insightful observation. It really advances the discussion.

 

[WolfeTone]

I hope this link is of practical interest: Tether is too big to fail
That piece is pure slander, if untrue. But the folk at Tether are above suing such folk.

Duke, did you actually look at the associated bitcoin/tether graph in the article you linked?
I'm trying to find a correlation between the two lines, over a three year period. Maybe you can point it out?

If tether was being used to manipulate the bitcoin price, I would have expected a greater correlation. Maybe I'm misconstruing the data on the graph?

 

[Duke of Marmalade]

Thank you for that insightful observation. It really advances the discussion.

That is always my aim, you’re welcome.

 

[tecate]

It seems the long running investigation by the NYAG into Tether/Bitfinex has come to an end. Tether has agreed to pay $18 million whilst admitting no wrongdoing. That's the outcome after 2.5 years of investigation and 2.5 million pages of data provided via discovery.

The company also volunteered to submit quarterly reports re. reserves. going forward.

Nouriel Roubini had spun off tweet after tweet about Tether and how it was about to bring bitcoin down - and yet, radio silence when it comes to this outcome. Incredibly objective - he'll just move on and desperately grasp at any old FUD that's anti-bitcoin.

 

[Duke of Marmalade]

It seems the long running investigation by the NYAG into Tether/Bitfinex has come to an end. Tether has agreed to pay $18 million whilst admitting no wrongdoing. That's the outcome after 2.5 years of investigation and 2.5 million pages of data provided via discovery.

The company also volunteered to submit quarterly reports re. reserves. going forward.

Nouriel Roubini had spun off tweet after tweet about Tether and how it was about to bring bitcoin down - and yet, radio silence when it comes to this outcome. Incredibly objective - he'll just move on and desperately grasp at any old FUD that's anti-bitcoin.

The news about Tether more or less getting off was a big disappointment to this no-coiner. Nouriel had really led me to believe that this would be the denouement. I am disappointed in him but he still remains my hero, his substantive arguments are rock solid IMHO.
I have just finished watching an online MIT course by Prof Gary Gensler on Blockchain & Money. He describes himself as neither a BTC minimalist or maximilist. The course was videoed in late 2018 with BTC having fallen from 20K to 6K. The bit on ICOs was trully unbelievable - what a scam! The course confirmed me in my no-coiner convictions, in fact BTC's current $50k price seems to me to hasten its downfall. For example, it would seem to bring forward the day of serious intervention by the FED and that would be the end IMHO.

 

[Dublinbay12]

The news about Tether more or less getting off was a big disappointment to this no-coiner. Nouriel had really led me to believe that this would be the denouement. I am disappointed in him but he still remains my hero, his substantive arguments are rock solid IMHO.
I have just finished watching an online MIT course by Prof Gary Gensler on Blockchain & Money. He describes himself as neither a BTC minimalist or maximilist. The course was videoed in late 2018 with BTC having fallen from 20K to 6K. The bit on ICOs was trully unbelievable - what a scam! The course confirmed me in my no-coiner convictions, in fact BTC's current $50k price seems to me to hasten its downfall. For example, it would seem to bring forward the day of serious intervention by the FED and that would be the end IMHO.

There lies his problem, one can't perform a neutral assessment of BTC in the eyes of some in this forum. You have to be categorized as either a naysayer or BTC purist, no middle ground can exist.

So I firmly expect that Prof Gary Gensler will be denounced in the next few minutes as having nothing valuable to say.

 

[tecate]

The news about Tether more or less getting off was a big disappointment to this no-coiner. Nouriel had really led me to believe that this would be the denouement. I am disappointed in him but he still remains my hero, his substantive arguments are rock solid IMHO.
I have just finished watching an online MIT course by Prof Gary Gensler on Blockchain & Money. He describes himself as neither a BTC minimalist or maximilist. The course was videoed in late 2018 with BTC having fallen from 20K to 6K. The bit on ICOs was trully unbelievable - what a scam! The course confirmed me in my no-coiner convictions, in fact BTC's current $50k price seems to me to hasten its downfall. For example, it would seem to bring forward the day of serious intervention by the FED and that would be the end IMHO.

Gensler has been appointed SEC Chair. He at least understands the tech - Roubini doesn't (and is blinded by his open hostility to the very notion of decentralised money). On ICOs, there isn't anyone who would disagree with you (but that's not a slight on genuine blockchain projects). On the ultimate outcome re. btc, we'll have to see, Dukey. It doesn't look that way to me but there are plenty of twists and turns left in this story as it unfolds.