Tether and Bitfinex are Unacceptable: The Fundamental Divide

It can be difficult to talk about Tether, not because there is disagreement on the essential facts, but due to the lens through which these facts are viewed.

The skeptics and critics find it unacceptable that these businesses would give over $1 billion to money launderers and NEVER SIGN A CONTRACT. The traders find that to be acceptable behavior.

The skeptics and critic find it unacceptable that a business that promises to be backed 1:1 by cash always only is backed by 3% cash. The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable for a business to lie to the public repeatedly and for no clear reason. The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable for Tether to lie every single day for years on their financial transparency page. The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable for an exchange to be founded by a ponzi scheme enthusiast and defender. The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable for the executives of a multi billion dollar company to have so often flouted the rules. The traders find that to be acceptable behavior

The skeptics and critics find it unacceptable for an exchange to be founded based on stolen code written by a teenager with known exploits. (Archive) The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable for an exchange to use bots and sockpuppets to manipulate sentiment. The traders find that to be an acceptable behavior.

The skeptics and critics find it unacceptable that these entities have been hacked 3 times, in suspicious ways and yet have provided no post-mortem or security audit despite promising them. The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable that after both Tether and Bitfinex promised audits that neither of them provided. The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable that when Bitfinex did a haircut on their customers, some customers were excluded. The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable that these business commingled customer and corporate funds. The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable that executives of Tether would get irregular large payments from Tether reserves. The traders find that to be acceptable behavior.

The skeptics and critics find it unacceptable that Bitfinex raided Tether reserves to cover up their own insolvency while lying to the public about it. The traders find that to be acceptable behavior.

I do not know how to bridge this divide.

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5 thoughts on “Tether and Bitfinex are Unacceptable: The Fundamental Divide

  1. Bennett,

    Where do we suppose the $865 million actually went? Do you have any idea?

    That’s an absurd gaping hole in their balance sheet… if they did some absurdly irresponsible crypto trading they might have made that back, but I doubt it considering they have 3% cash and 97% who the fuck knows.

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      1. Yes, thank you.

        So we know they have an $865 million hole in their pocket. Plus a few hacks… call it a billion dollarish hole.

        Is this a combination of tether creation and bitcoin price appreciation that you think saved them from blowing up?

        Given their recent disclosures, how much liquidity do you estimate they have access to?

        I’m thinking the other 97% is trash, maybe hundreds of millions actually in there on top of cash. Deltec buys bitcoins (in at $9300), so that might be the level that breaks tether.

        https://www.coindesk.com/tether-bank-deltec-stablecoin-reserves

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