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This is funny or sad ,depending on how you look at it
US Justice Dept Mulling Criminal Charges Against Binance Founder CZ: Report https://decrypt.co/116961/us-justice-dept-mulling-criminal-charges-against-binance-founder-cz-report
Imagine you're CZ. You just exposed one of the biggest fraudsters ever. And now the DOJ wants to investage...you. Meanwhile, the actual fraudster is still free, giving interviews. Yeah, the DOJ has been looking into binance for years, but it shows the unfairness of it all I guess.
What makes you think that CZ isn't himself a fraudster?
CZ sent texts to SBF complaining about him selling 250K of Tether and how it might cause a depeg. If Tether has a $60billion market cap and people redeem all the time and it wasn't fraudulent (as it almost certainly is) then why does CZ think $250K would seriously impact it?
Beyond that: why is he even texting a competitor about his specific trades?
Beyond even that: after what happened with FTX CZ and everyone else in the crypto space has an incentive to appear transparent, yet he refused to do an actual grown-up audit.
Instead, like FTX and Tether (again: two almost certainly fraudulent things) he basically circles back round to "take our word (or this random attestation that isn't an audit) for it". I believe this is cause he can't, just like SBF (who also reassured everyone hoping to avoid a bank run). I think it's the same scenario playing out in slow motion.
tl;dr: I think they're all crooks and CZ stabbed SBF mainly due to SBF trying to amass political power and throwing shots at Binance/CZ with it. It was imperial court intrigue, not altruism. I think they're all playing the same game (except maybe Coinbase, which iirc is public and thus regulated) so I'm not surprised that CZ was able to "expose" SBF. SBF's problem was just hubris in breaking the code among thieves.
Where is the evidence for Tether being fraudulent? Everyone seems to imply that it's a fraud, but where is the proof?
Tether is ancient by crypto standards. It's the oldest and biggest stablecoin. It has defied at least five years of doommongering and considerable stresses in the 2017 crash, the COVID crash and the most recent crash. There are occasionally brief depegs, where it might go down to 0.99 cents or lower. So what? It's a live system, it's not living in the banking world of 'oh it will actually take us three business days to move your money (which purely exists in our spreadsheet)'. I highly doubt most banks could deal with an 80% share price crash, they'd need a bailout. Most banks don't have anywhere near the reserves tether does, proportionate to liabilities. That's the nature of fractional reserve banking.
Things like Luna and FTX are young and new by comparison.
If you go to their website they have some accountants describing their reserves, are you saying they're lying? Given that much of their holdings are US treasury bonds, they'll be making some decent returns there as interest rates rise.
https://tether.to/en/transparency/#reports
Tether's story went from "backed 1:1 to dollars" to "holding various tokens" to "we mostly have Chinese corporate paper" all along fighting or failing audits by state regulators and redefining what it's backed by, while printing billions a month without relative inflows.
Surely you're joking? Google "Tether scam" and there's a deluge of proof, including successful investigations against Tether, which led to Tether providing new reserve definitions.
Specifically: after it settled a court case in NY with the attorney general stating that Tether wasn't backed 1:1 to USD.
They just stated that they did no wrong doing and were vindicated, updated their story to holding commercial paper and other things other than USD and continued on their day. As the saying goes: the market can stay irrational for longer than you can stay solvent, so I'm not particularly moved by the fact that Tether is old.
Lying about 1:1 USD backing is enough imo. Why would anyone trust them after that when, upon pressure, suddenly we get a different (less problematic) story once they run into trouble? Especially since they continually refuse to do an audit and, iirc, refused to be clear about which paper they held last time they were questioned on CNBC.
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According to whom? A majority of their reserves are US treasuries according to BDO as of September 2022.
If you take a quick look at the market cap, about 20 billion Tether has been redeemed for USD since May 2022. You're giving the 2021 argument but we've moved on since then. Now that it's not printing billions a month but actually had billions withdrawn the last few months, does that invert your conclusion?
BDO:
They just confirmed that Tether claimed they had so and so assets on paper - not whence and why. It's literally meaningless. But sure, avoiding an audit for 5 years, and changing their claims of holdings many times is totally a string of bonafide grade-a deeds of trustworthiness!
If you collate redemption events with outside events, it's rather clear most is just drawing numbers down entirely. SBF's plots alone involved billions of Tether which were wiped off the books without fiat appearing. Tether created the tokens out of nothing and then wiped them later. Now, I don't just mean a few billions. Alameda and Cumberland received 70% of all Tether. There are concrete examples like 3 Arrows "redeeming" more than 2x the Tether it supposedly had accumulated around May. Now, in March it continued receiving more Tether - but directly on exchanges instead of its historical wallets.
There are many fun treatments like: https://protos.com/tether-papers-crypto-stablecoin-usdt-investigation-analysis/
Are you saying it wasn't a scam on the 30th of September but it was before and after? Or are you saying they just took Tether's word for it?
From the end of page 1, halfway down through page 2 it lists all the things they did. They checked over the blockchain records, they got confirmation letters from banks, looked for the collateral in the loans... Not what I'd call 'confirming that Tether claimed things'.
Yes.
Learn some accounting. They go through significantly more scrutiny when you buy a house. Tether has been shown to double or quadruple count assets in the past. Tether has been shown to literally make things up. Plenty of other friendly actors move 10x the assets into an account then remove it the day after.
That was a hit piece against Tether you know. They investigated it and found large amounts of bs and contradictory flows, not BDO.
In 2017 https://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal
It disappeared the same day.
In march, Tether claimed 4.96 billion in "other investments (including digital currencies)" when the crypto market was over 2 trillion. After it dropped under 900 million a few months later, Tether claimed 5 billion. The numbers they claim are verifiable bullshit.
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I remember reading this and bookmarking it a while ago, no idea how accurate it is (original author got banned from medium): http://web.archive.org/web/20210904210829/https://medium.com/nerd-for-tech/greatest-scam-in-history-by-tether-76ac059b9550
tldr: He indeed thinks that there's far less backing tether than they claim, based on not performing an independent audit, and its primary use is gassing up the price of bitcoin.
For some reason that link isn't working for me, it just keeps refreshing the page every 3 seconds so I can't read it. I guess it rather backs up webarchive begging for funds.
I know Scott also posted a link to a convincing sounding anti-Tether essay too. But consider how much misinformation there is in the crypto-sphere, by nature of rumors moving markets very quickly. There are a lot of people who'd be happy to see Tether fail, since they can make a lot of money shorting it at the right time. It's difficult to profit from a stablecoin staying stable.
I haven't/can't actually read the medium article. But don't you think that if he got banned, then something might be suss about it? I'd imagine Medium has some kind of rule against impersonation or propagandizing. If Tether isn't backed, how come people have been able to take about 20 billion out of it? The marketcap has fallen a lot since May 2022, that means coins are being removed from circulation by redemption back to USD.
https://coinmarketcap.com/currencies/tether/
Maybe someday it will collapse. But I've gotten so tired of the seemingly never-ending story of Tether going under. There were supposed to be revelations coming out years ago about this. People have been panicking about it for so long now.
It's entirely possibly he was bullshitting. I also couldn't load the article, so I just ctrl+c ctrl+v'd it into notepad and scrolled down to the text.
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