Crypto Market Roiled by New Allegations Against Tether, Bitfinex

Re:Crypto Market Roiled by New Allegations Against Tether, B... by csomar on Thursday April 25, 2019 @05:58PM (#19752886)

I think the news was out for some time and only now the rumor started to confirm.

Tether is trading at exactly $1/$1 on Kraken. It had touched $0.85/$1 on October 2018 though. It was discounted for the last quarter of the last year. The discount lasted for several months suggesting lack of liquidity and possibly lack of funds.

The Tether discount suddenly disappeared. And suddenly a discount/premium appeared on Bitfinex. However, that discount was getting smaller everyday and almost disappeared (until a bit earlier but still negligible in the volatile crypto market).

I personally hold a significant amount of USDT/Finex Dollars and not worried. I think the price is more relevant than the news. The probabilities or lack of funds will be builtin in the price. And the current price suggests that iFinex has got its shit together.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by oooshha on Thursday April 25, 2019 @06:13PM (#19752981)

It will hold it's peg until it doesn't, and when it doesn't you will take a 50-70% haircut. Just watch.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by matthewbauer on Thursday April 25, 2019 @06:48PM (#19753237)

Tether’s worthless if it’s not worth a dollar. You’ll either get 100% or 0%.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by oooshha on Thursday April 25, 2019 @06:53PM (#19753280)

It's worth the market's perception of what the holders will get after a prolonged bankruptcy process.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by Scoundreller on Thursday April 25, 2019 @07:37PM (#19753534)

The lawyers and accountants get paid out of the leftover assets.

If there's practically zero assets left, the process won't even start.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by rsynnott on Thursday April 25, 2019 @07:40PM (#19753560)

You may remember the implosion of mtgox, and people buying mtgox ‘dollars’ at a discount. There’s always a greater fool, apparently.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by gruez on Thursday April 25, 2019 @07:57PM (#19753660)

Wait, what's so foolish about buying debts for a discount? There's an entire industry (collections) devoted to that. Sure, that time they lost, but hindsight is 20/20.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by Forbo on Thursday April 25, 2019 @08:12PM (#19753733)

Mt. Gox bankruptcy claims proceedings are marching along slowly, so I wouldn't say that they've lost just yet.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by jeremyjh on Thursday April 25, 2019 @08:18PM (#19753760)

That is right, it is an industry. It has established risk models. It has norms and remedies. Most importantly, it has the triumvirate of debt worthiness (aka credit bureaus) at it's beck and call.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by JaleDarvis on Thursday April 25, 2019 @11:26PM (#19754604)

It had to start somewhere didn't it?

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by conanbatt on Friday April 26, 2019 @12:49AM (#19754934)

If you bought btc at a discount at mtgox you are mega rich now.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by asynchrony on Friday April 26, 2019 @01:23AM (#19755045)

If and only if you got your btc out of mtgox.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by conanbatt on Friday April 26, 2019 @06:09PM (#19762192)

MtGox paying out with the remaining funds.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by paulgb on Thursday April 25, 2019 @06:14PM (#19752984)

> And the current price suggests that iFinex has got its shit together.

Or, it could mean that they keep buying up coins on the market at face value to keep prices stable to avoid a run on the bank (which they can only do as long as their reserves remain).

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by ionionaisodgni on Thursday April 25, 2019 @07:06PM (#19753360)

You are holding counterfeit money and hoping you can offload it before the shit hits the fan. When everyone starts running for the exit, you may not be in the front of the pack.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by jacobush on Friday April 26, 2019 @06:45AM (#19756156)

You can use it as a medium of exchange, temporarily, never expose yourself to a large extent.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by Havoc on Thursday April 25, 2019 @08:08PM (#19753713)

>I think the price is more relevant than the news.

Only true if the price is pure market driven, not manipulated by a powerful player. Like say...idk Bitfinex.

>I personally hold a significant amount of USDT/Finex Dollars and not worried.

I'd be panicking, but to each their own

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by empath75 on Thursday April 25, 2019 @07:52PM (#19753638)

I imagine that bitfinex/tether is liquidating reserves to hold the peg. They can keep it pegged until they run out of money and then not only is tether worthless but so are all your coins on their exchange (and probably most other exchanges that use tether). That’s how bank runs work.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by abakker on Thursday April 25, 2019 @08:14PM (#19753742)

Lessons learned from sovereign debt crises: don't defend the peg. Let it float now, it will hurt more if you defend it all the way to insolvency. Devaluation is better than forced debt restructuring or full bankruptcy.

Oh well, we'll see it all again.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by lalaland1125 on Friday April 26, 2019 @01:14AM (#19755016)

That reasoning doesn't matter for Bitfinex because when the money runs out they can just exit scam.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by bhouston on Friday April 26, 2019 @02:42AM (#19755300)

Maybe they already have. 850m is missing right?

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by 6nf on Thursday April 25, 2019 @09:18PM (#19754045)

Why would you hold significant amounts of Tether? There's no upside and all of the downside.

Why do you do it?

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by chimpburger on Friday April 26, 2019 @12:04AM (#19754779)

It's used for margin trading at exchanges that do not accept fiat

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by asynchrony on Friday April 26, 2019 @01:25AM (#19755050)

I suppose leveraged betting is done best when backed by worthless collateral.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by arisAlexis on Friday April 26, 2019 @10:07AM (#19757621)

exactly and that means that regular long-term investors should not be worried at all about this.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by Zarath on Thursday April 25, 2019 @11:55PM (#19754729)

Best liquidity, most pairs, and can be bought at a discount.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by conanbatt on Friday April 26, 2019 @12:49AM (#19754932)

If the discount was because they lost funds, that was insider trading. That was not public information. And of the bad kind.

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Re:Crypto Market Roiled by New Allegations Against Tether, B... by magnamerc on Friday April 26, 2019 @10:14AM (#19757702)

Why hold USDT? Why not hold other coins with proven reserves, or DAI?

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