[HN Gopher] Voyager suspends trading, deposits, withdrawals, and...
___________________________________________________________________
Voyager suspends trading, deposits, withdrawals, and loyalty
rewards
Author : uptown
Score : 118 points
Date : 2022-07-01 20:28 UTC (2 hours ago)
(HTM) web link (www.investvoyager.com)
(TXT) w3m dump (www.investvoyager.com)
| armchairhacker wrote:
| I saw this on their site:
|
| > FDIC INSURED ON USD $250,000
|
| > You USD is held by our banking partner, Metropolitan Commercial
| Bank, which is FDIC insured, so the cash you hold with Voyager is
| protected.
|
| So does that mean anyone with less than $250k is guaranteed their
| money? Is there any legal backing?
| ValentineC wrote:
| I think the keyword here is "cash".
|
| Other forms of assets, namely crypto, aren't protected by FDIC
| insurance.
| InefficientRed wrote:
| I have a hard time imagining a jury coming to the conclusion
| that this phrasing (still on their site) isn't intentionally
| misleading.
| koolba wrote:
| I wonder if this is at all related to the recent move by
| Coinbase to merge USDC / USD balances.
| xur17 wrote:
| If a user has $250k or less in USD assets on the platform I
| believe it does.
|
| For most of these sites, users convert deposits into
| stablecoins (USDC, etc) since they can typically earn interest
| on this, and this is not covered under FDIC.
| JumpCrisscross wrote:
| > _does that mean anyone with less than $250k is guaranteed
| their money?_
|
| I've noticed a lot of crypto companies being sneaky with this.
| What that means is if Metropolitan Commercial Bank goes under,
| Voyager's cash is protected. It does nothing to protect cash
| you've entrusted to Voyager if Voyager goes under.
| ourmandave wrote:
| _Voyager Wallet You can transfer assets from an external wallet
| to your Voyager account /wallet. Like Coinbase, the account
| wallet is not yours (i.e., not your keys, not your coin). If
| Voyager wants to freeze your account, along with any assets in
| it, they can. And there isn't much you can do about it._
|
| No, you're fucked. It used to take up to 2 days to transfer it
| out of Voyager, before everyone (not a whale) was completely
| fucked.
| smoe wrote:
| Seems like a marketing spin to lure customers into a false
| sense of security. From the fine print in the user agreement:
|
| "Cash in the Account is insured up to $250,000 per depositor by
| the FDIC in the event the Bank fails if specific insurance
| deposit requirements are met. FDIC insurance does not protect
| against the failure of Voyager or any Custodian (as defined
| below) or malfeasance by any Voyager or Custodian employee."
|
| https://www.investvoyager.com/useragreement
| iancarroll wrote:
| If FDIC insurance is applicable, though, that should mean
| your cash is being held in your name with the underlying
| bank. It is unlikely that Voyager would have any right to
| those assets upon bankruptcy or insolvency -- if they do (I
| am no expert), that would destroy the neobank model to some
| extent.
|
| > Voyager maintains an agreement with the Bank whereby the
| Bank provides all services associated with the movement of
| and holding of USD in connection with the provision of each
| Account. Therefore, each Customer is a customer of the Bank.
|
| The "omnibus account" phrasing is a little vague though, but
| if FDIC insurance is applicable, funds have to be separated
| to some extent.
| smoe wrote:
| I'm not an expert at all either, just mildly interested how
| this will play out. I don't have any money in it.
|
| There is an ongoing discussion about it on the Voyager
| subreddit
|
| https://www.reddit.com/r/Invest_Voyager/comments/vp8kdq/pre
| p...
|
| Some people there say they have called the FDIC, but the
| response they have gotten is that the insurance only kicks
| in if the Metropolitan Commercial Bank fails.
|
| I have no idea what happens to the customer accounts at the
| bank in case of a Voyager bankruptcy. E.g. if they can be
| used to cover voyagers debt or have to be handed over to
| the customers.
| stusmall wrote:
| That's wild. That seems like something someone should go to
| jail for ignoring everything else. At a glance that wouldn't
| be my interpretation of the statement on their site.
| sdfhdhjdw3 wrote:
| I guess everyone's strategy in the crypto space is put everything
| you have on bitcoin and hope it goes up.
|
| It's a really good strategy, when it works.
| puranjay wrote:
| to be fair, all of this CeFi crap is against the core ethos of
| crypto.
|
| No serious crypto person will tell you to use CeFi.
|
| "Not your keys, not your coins" is the first rule of crypto.
| dragontamer wrote:
| I wish it were that simple.
|
| These folks bought GBTC, traded GBTC and staked it with others,
| exchanged it for USDC staked that and then used the money to
| buy more BTC.
|
| No one offers 3% to 20% APY just holding BTC. They are trading
| that coin to everyone else in a shadow banking / speculation
| scheme and hoping for the best.
| Spartan112 wrote:
| rglover wrote:
| Bitcoin is the only thing that will remain from the embers of
| this meltdown. This was the inevitable collapse of the shitcoin
| casinoconomy.
| barnbuilder wrote:
| The people getting wiped out by the collapse of Voyager,
| Celsius, etc. were not putting their money on bitcoin. They
| were giving it to a custodian who thought they could beat
| bitcoin by investing in altcoins (or lending to those who do
| so).
|
| This is definitely not "everyone's strategy"; plenty of us
| bitcoiners have been warning against this sort of irresponsible
| activity for a long time.
| tomjakubowski wrote:
| What's irresponsible about that compared to just parking it
| in BTC?
| barnbuilder wrote:
| Once someone sends their bitcoin or "crypto" to a lending
| platform, they no longer own this asset. What they now have
| is an IOU for that asset that the platform may be unwilling
| or unable to fulfill in the future, as appears to be the
| case with Voyager and numerous others before it.
| Skunkleton wrote:
| Yes, but setting aside direct ownership which is not a
| prerequisite for investing in any coin, how is bitcoin a
| better choice? It seems to me that is like saying, well
| you really should have invested in Exxon and you would be
| ok now.
| sdfhdhjdw3 wrote:
| Crypto is one of the biggest active victim-blaming
| communities.
|
| "Not your wallet not your coin", or whatever they like
| saying, is just is just deflection from valid criticism
| that crypto is very easy to exploit without recourse.
| prohobo wrote:
| I disagree. To me it's like saying passwords are broken
| because most people choose "password123". Or like saying
| dollar bills are bad because they can rip. Safety rails
| should be made of course, but if you aren't even
| maintaining basic hygiene within a system then I'm sorry
| but that's on you.
|
| People are learning to use better passwords, and people
| learned long ago to keep their paper money in a wallet.
| The same will happen with crypto.
| UncleMeat wrote:
| Passwords _are_ broken because people choose
| "password123". People work on all sorts of alternatives
| because of this.
| sdfhdhjdw3 wrote:
| How much do you think is the fair value of 1 bitcoin?
| prohobo wrote:
| My guess: from a speculative standpoint Bitcoin is finite
| and the only real competitor to fiat. There's also a
| large amount of sustained hype. It's unlikely to flatline
| unless something really major happens.
|
| Blockchains like Ethereum are not (and aren't meant to
| be) alternatives to fiat. In fact, the best thing for ETH
| would be low price, since it's mostly used as gas.
| Altcoins are almost entirely vaporware until ETH tech
| matures and consumer services become feasible. Until
| then, any high valuation of either ETH or Altcoin is 100%
| Tulip Mania. I have no idea about any blockchains outside
| of Bitcoin or Ethereum.
| hackingforfun wrote:
| Direct ownership is the point though. Bitcoin allows
| direct ownership. Also, being the biggest, it can be
| considered the safest crypto.
| xur17 wrote:
| Exactly. And if you had half an ounce of sense, you would
| have withdrawn your deposits from these platforms when UST
| and then Celsius collapsed.
| capableweb wrote:
| > withdrawn your deposits from these platforms when UST and
| then Celsius collapsed
|
| Which ironically, is why more of them keep (and will keep)
| falling. It'll be a cascade of withdrawals across the
| ecosystem, and all these weak platforms will rightly go
| under. Looking forward to it.
| radicaldreamer wrote:
| Were they gambling with customer funds? I don't understand how
| they lost crypto they were simply holding as a custodian...
| impulser_ wrote:
| They were a lender to 3 Arrows Capital, who was liquidated.
|
| These crypto exchanges are over leveraged. They make banks look
| like saints in risk managements.
| [deleted]
| yieldcrv wrote:
| not your keys, not your coins
| chx wrote:
| Reminder: all crypto"currencies" are a scam. It never was and for
| the foreseeable future it can not be anything else.
| https://news.ycombinator.com/item?id=31462469
| ansible wrote:
| I sometimes wonder if I'm the only one who just wants a bank to
| be a bank.
|
| I've been with the same relatively small regional bank for 30
| years. I have a checking account, savings account and that's it.
| They've been stable this entire time, and I've never worried my
| money was going to disappear.
|
| As another sign of being an old man, I'm old enough to remember
| the phrase "as safe as money in the bank". You see, when I was a
| kid, the banks had been operating under decades of strong
| regulation by the FDIC and other agencies, and were widely
| considered to be a safe place to put your money.
|
| Not that the banking sector hasn't seen its share of problems in
| that time. From the S&L crisis, to the home mortgage lending
| fraud that lead to the big crash. But in all that time, with just
| a little effort, you could put at least some of your money in a
| regular local bank, and expect it to be there tomorrow.
|
| Bank local! If you want to speculatively invest, that's fine. But
| keep some money in a local bank so that you can pay your bills
| next month.
| phkahler wrote:
| If we get interest rates back up to better levels (IMHO 6 to 7
| percent mortgages) they might even be able to pay interest on
| savings without selling loans!
|
| Unfortunately lowering rates is used to "fix" the economy. This
| is a failed strategy.
| NovemberWhiskey wrote:
| I invite you to look at the list of failed banks provided by
| the FDIC:
|
| https://www.fdic.gov/resources/resolutions/bank-failures/fai...
|
| Notice that the vast majority of these are smaller, local or
| regional banks.
| unclebucknasty wrote:
| Many larger banks are deemed "too big to fail" so they won't
| land on that list by definition.
| woodruffw wrote:
| Pointing to the list of failed banks from the website of the
| government agency that insures them and _makes customers
| whole_ doesn 't convey as strong of a point as you might have
| intended.
| AmericanChopper wrote:
| > makes customers whole
|
| *As long as whole is less than $250k.
| pkulak wrote:
| Folks with more than 250k know not to put any of it over
| the bounds of the FDIC.
| AmericanChopper wrote:
| $250k is only just a home down payment in a lot of
| cities.
| arcticbull wrote:
| Yes, that's the worst case - _however_ in the real world
| the FDIC and the OTS (Office of Thrift Supervision) does
| their best to ensure _nobody_ loses _any_ amount of money
| regardless of their account balance.
|
| In the case of WaMu in 2008 for instance, the OTS took
| possession of the bank and sold it to JPMorgan Chase.
| They didn't draw on the deposit insurance fund and
| everyone stayed whole. [1]
|
| "According to FDIC spokeswoman LaJuan Williams-Young, 'No
| depositor has ever lost a penny of insured deposits since
| the FDIC was created in 1933.'" [2, 3]
|
| [edit] Looks like I found one case where a bank failed
| and a total of $500,000 in uninsured deposits (not in a
| single account, in total) were forfeit. [4]
|
| [1] https://en.wikipedia.org/wiki/Washington_Mutual
|
| [2] https://en.wikipedia.org/wiki/Federal_Deposit_Insuran
| ce_Corp...
|
| [3] https://www.magnifymoney.com/banking/deposits-bank-
| failures/
|
| [4] https://www.depositaccounts.com/blog/bank-
| failures/#p21332
| jsmith45 wrote:
| That "No depositor has ever lost a penny of insured
| deposits since the FDIC was created in 1933" claim is in
| reference to just the insured part of the deposits (as in
| up to the limits).
|
| FDIC is required to go with the resolution that will cost
| the least to the fund. An acquirer offering to take on
| all Deposits rather than just insured deposits is
| typically not a big problem for the acquirer, and can
| save a surprising amount of money on the FDICs side, so
| most acquisition offers tend to be for all deposits
| rather than just insured deposits. (It also tends to keep
| your new customers happier if they did not lose money,
| which is very much an actual consideration that goes into
| bidding on a failing bank).
|
| However, sometimes a bank will successfully bid for only
| the insured portions of deposit accounts. This happened
| with The Enloe State Bank in 2019, where Legend Bank's
| bid to acquire just the insured portions of deposit
| accounts.
|
| Nevertheless, losing deposits over the insured amount in
| a bank closure is definitely the exception and not the
| norm in recent times.
| addicted wrote:
| I guess the only valid point is that the allure of small
| banks may be overstated.
|
| There is a problem with large banks. It's the same
| problem with large companies from any other industry.
| They gain oversized political power.
|
| However, it's weird to me how much we go after the banks
| for being large when it's far more regulated than nearly
| every other industry in the country.
| AmericanChopper wrote:
| > No depositor has ever lost a penny of insured deposits
| since the FDIC was created in 1933
|
| This is just a truism because all insured deposits are
| insured, and all non-insured deposits are non--insured.
| [deleted]
| arcticbull wrote:
| Yes, you're right, however, do you have a source on how
| much has been lost in the last 89 years? I've had a lot
| of trouble finding anything more than that one bank that
| had $30M in assets losing $500K in total one time in
| Texas in the last 5 years.
| Tool_of_Society wrote:
| I wish I had +250k in my bank account....
| woodruffw wrote:
| Per individual account (joint accounts are double). The
| FDIC is more than happy to ensure all of the accounts
| you'd like to open.
|
| (And as 'arcticbull mentioned: the FDIC has reliably made
| _much_ larger account holders whole.)
| dragonwriter wrote:
| > As long as whole is less than $250k.
|
| Usually, no
|
| As an insurer, sure, $250K per account owner per
| ownership class. (Notably, single and joint accounts are
| separate ownership categories, so with proper
| distribution of balances, a married couple with single
| and joint accounts at one institution, is covered up to
| $1,000,000 in total. $250k each in the individual
| category, and $250k each in the joint category.
|
| But it also acts as a receiver of failed banks, and in
| that capacity can facilitate the sale of assets tied to
| the uninsured portion of the debts represented by account
| balances. _Usually_ , this ends up with making account
| holders whole without limit.
| lamontcg wrote:
| For a single individual are savings and checking accounts
| considered separate accounts?
| dragonwriter wrote:
| > For a single individual are savings and checking
| accounts considered separate accounts?
|
| Insurance limits are not by account, they are by account
| ownership category. Checking and savings account held as
| single accounts are all part of the same ownership
| category:
|
| https://www.fdic.gov/resources/deposit-
| insurance/brochures/d...
| NovemberWhiskey wrote:
| I think it perfectly well makes the point that regional
| banks are much more likely to practice poor risk management
| and fail than larger banks. If your goal is "boring
| banking", having to have the FDIC come in and arrange a
| sale of your bank is ... not it?
| woodruffw wrote:
| Oh, that's a good point. I guess the most boring bank
| possible would probably be something like Chase.
|
| That being said, it looks like we average around 4
| regional bank failures a year in the US. There are a
| little under 5000 banks in the US, almost all of which
| are regional, so that leaves a 0.08% chance that any
| particular one of them will fail (all things being equal,
| which they probably aren't).
| rootsudo wrote:
| "as safe as money in the bank"
|
| I think you're conflating these defi platforms as banks, they
| are not - they are risk ladden investment platforms as listed
| on the website itself...
|
| "2022 Voyager Digital, LLC. VOYAGER is a trademark of Voyager
| IP, LLC, a wholly owned subsidiary of Voyager Digital Ltd. All
| services provided by Voyager Digital, LLC, a FinCEN registered
| company. Investments are subject to market risk. NMLS ID:
| 1730854"
|
| I also don't see them saying they are a bank, anywhere on their
| about me investor page:
|
| "About Voyager
|
| Voyager Digital Ltd. is a fast-growing, publicly traded
| cryptocurrency platform in the United States founded in 2018 to
| bring choice, transparency, and cost efficiency to the
| marketplace. Voyager offers a secure way to trade over 100
| different crypto assets using its easy-to-use mobile
| application, and earn rewards up to 12 percent annually on more
| than 40 cryptocurrencies. Through its subsidiary Coinify ApS,
| Voyager provides crypto payment solutions for both consumers
| and merchants around the globe."
|
| https://www.investvoyager.com/investorrelations/overview/
|
| But I do see they link up instantly and have their own bank
| account setup under a "real bank"
| https://assets.investvoyager.com/5ykew4idKrAVhJIu
|
| tl;dr don't call a bank, a bank when it never was a bank.
| ansible wrote:
| As /u/thr0wawayf00 mentions, they issued debit cards and
| allowed people to do direct deposits into their accounts. So
| people were using it like a bank for their ordinary day-to-
| day financial transactions.
|
| I, personally, would never have considered it a bank (or had
| any trust for anything crypto-related in general), but other
| people seemed to treat it like a bank.
| clintonb wrote:
| Voyager may have marketed itself as a bank of some form, but it
| was never a bank.
| reaperducer wrote:
| You probably also remember when bank buildings were designed to
| look like historic buildings, in order to foster a sense of
| trust and permanence.
|
| Today, banks look like coffee shops and low-rent cell phone
| stores.
| Animats wrote:
| Or like car dealerships, with all those little glass offices.
| caiomassan wrote:
| i am not even 40 and got my money robbed from the bank by the
| government twice. depends where you live, a bank is not that
| good of a place to keep your savings.
| alangibson wrote:
| We're definitely going to need details on this.
| mh- wrote:
| from the parent comment
|
| _> depends where you live_
|
| I infer they live somewhere without a stable financial
| system and/or government.
| notch656a wrote:
| Nah the IRS has frozen bank accounts multiple times
| merely because people owned cash businesses where they
| made sub-10k deposits on the regular without any
| intention to structure it. It's frighteningly easy to
| lose access to your bank account in the US.
| mh- wrote:
| But that's not at all what happened in the thread we're
| replying to..
| notch656a wrote:
| >But that's not at all what happened in the thread we're
| replying to..
|
| Don't think you have the information to say that.
|
| OP didn't say what happened. I don't think we can say
| anything in particular is exactly what did happen without
| more information. Unless you don't consider the US a
| place with "a stable financial system and/or government"
| -- which may be accurate -- then this very well could
| have taken place in the US. I'm not sure you can infer
| where this took place.
| rootsudo wrote:
| This is a pretty common scenario in South America, e.g.
| Argentina, Colombia, Venezuela and then you can look over
| at some African reasons and even Asia nowadays too - e.g.
| Sri Lanka.
|
| You can also go as far as even the USA does this on money
| it deems "did a crime" or was related, or just in the
| proximity because the law enforcement officer said so.
| civil forfeiture.
| oldgradstudent wrote:
| Could you share a bit more?
| barnbuilder wrote:
| You may feel like your accounts are stable and nothing is
| disappearing but by CPI inflation calculations
| (https://www.bls.gov/data/inflation_calculator.htm), any money
| you had in that account 30 years ago has lost half its buying
| power.
|
| If you want to keep the money that you have worked for over the
| long term, your checking and savings account are not going to
| cut it.
| woodruffw wrote:
| I don't think the GP is saying that the don't do any
| investment whatsoever.
| addcninblue wrote:
| You're saying that the value of your money in real terms is
| depreciating.
|
| OP is saying the nominal value persists.
|
| With banking, people care about nominal value.
| EGreg wrote:
| Half in 30 years? That's pretty good! Ethereum fell by that
| much in a couple weeks. On the way up in a bull market it's
| all roses, but in a bear market, these things can crash hard.
|
| Money losing value gradually -- Demurrage -- makes people
| actually spend money rather than hoard it. If you want the
| money to earn interest, you will have to take some risk.
| Invest in some assets. Usually, stocks or real estate or
| (finally thanks to the JOBS act) new startups.
|
| I don't know why people have "fat bank accounts". Money isn't
| meant to be stored. That's a racket by the banks, along with
| the idea that you have to buy a home instead of renting. If
| you can rent and buy other assets that you understand better
| than real estate, then do that.
|
| This is not magic .. money has to come from somewhere. It
| usually comes from banks themselves -- who lend it to people
| and businesses who believe that they can pay back MORE money
| ! The only way everyone can pay back more money than is in
| existence is if the money supply is increased in the
| meantime. So inflation happens. The only alternative is
| having lots of people default and restructure their loans to
| owe less. This is what Ray Dalio says can be "a beautiful
| deleveraging". I don't buy it...
|
| Learn how it all works:
|
| https://m.youtube.com/watch?v=PHe0bXAIuk0
| MarcoZavala wrote:
| alexjplant wrote:
| Aren't retail and investment banking separate spaces? Aren't
| depository accounts insured to the tune of a quarter of a
| million dollars by the FDIC? Isn't Voyager a crypto exchange?
|
| I tend to keep my money in local credit unions as well, but I'm
| struggling to understand how this discussion is germane to
| Voyager's actions here.
|
| EDIT: See https://www.investvoyager.com/blog/voyager-is-now-
| fdic-insur...
| iskander wrote:
| https://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bl.
| ..
|
| >the Financial Services Modernization Act of 1999...repealed
| part of the Glass-Steagall Act of 1933, removing barriers in
| the market among banking companies, securities companies, and
| insurance companies that prohibited any one institution from
| acting as any combination of an investment bank, a commercial
| bank, and an insurance company
|
| FDIC insurance ends up being the main guarantee of safety,
| especially in the modern era of 0% reserve requirements.
| NovemberWhiskey wrote:
| > _especially in the modern era of 0% reserve
| requirements._
|
| Total red herring; reserve requirements went away but they
| were irrelevant because banks were holding massively in
| excess of the required reserves in any case.
| JumpCrisscross wrote:
| > _especially in the modern era of 0% reserve requirements_
|
| They've been replaced with capital requirements, which make
| a lot more sense in modern finance than reserve
| requirements.
| iskander wrote:
| What's the current state of those capital requirements in
| US banks?
|
| Is this the latest requirement? https://www.federalreserv
| e.gov/newsevents/pressreleases/bcre...
|
| (4.5%)
|
| And how do banks actually measure up to this minimum?
| tick_tock_tick wrote:
| The Fed runs stress tests all the time and currently the
| banks are preforming perfectly during them.
| Jon_Lowtek wrote:
| which means the tests are not stressing. That is a good
| thing as they test for conditions that previously
| resulted in crashes. But it could also be a bad thing if
| the banks adapted to formally pass tests while straining
| their business with schemes that are overlooked
| NovemberWhiskey wrote:
| The 4.5% is the baseline; subject to additional stress
| capital buffer (based on DFAST supervisory stress-test
| results) and systematically-important institution
| weighting.
|
| https://www.federalreserve.gov/publications/large-bank-
| capit...
|
| So JP Morgan is 11.2%; Citigroup is 10.5%; for example.
| thr0wawayf00 wrote:
| Because Voyager has tried to position itself as a crypto-
| based alternative to banking. From the front page:
|
| > Build your wealth
|
| > Earn up to 12% annual rewards. Beat your bank by earning
| top rewards each month on 39 digital assets with no lockups.
|
| They explicitly touted their benefits over using a
| traditional bank before they issued this notice. They also
| issued debit cards that they are now deactivating.
|
| Fundamentally, crypto has staked its future on replacing the
| banking system, citing various issues with the Fed, etc. But
| the regulatory environment in banking (the FDIC) creates a
| much more stable environment in which to transact than these
| platforms do.
| teraflop wrote:
| In particular, the Voyager home page says that "USD" and
| "cash" deposits are FDIC-insured, while the debit card
| landing page talks about how you can earn rewards while
| "spend[ing] USD Coin like cash".
|
| I can easily imagine a naive consumer coming away from this
| with the incorrect impression that USD Coin deposits, being
| equivalent to USD, are insured to the same extent.
| [deleted]
| adrr wrote:
| They can be the same. Voyager looks like they have their
| sweep account as a brokered deposit with an FDIC insured
| bank. This similar to other investment firms. I think Etrade
| lets you have up to $1M for FDIC insurance spread across 4
| banks but you have to set it otherwise it sits in a money
| market or equiv.
|
| Good thing is that voyager shouldn't be able to touch money
| in the sweep accounts.
| captainkrtek wrote:
| Couldn't agree more. Been banking with a not-for-profit credit
| union for over 15 years. Never been charged unreasonable fees,
| great customer service, solid and simple app/website. I don't
| want banking to be "exciting"
| ansible wrote:
| > _I don't want banking to be "exciting"_
|
| Yes, exactly.
|
| My bank makes money off of me every month, even though I have
| the "free" checking account. They offer an historically low
| interest rate on the savings account, and I know they're
| making money off that too.
|
| But I'm OK with all that.
| Animats wrote:
| _Another_ one?
|
| Tether is looking stressed. In the last three months, a lot of
| Tether has been cashed out. Look at the chart for Market Cap ->
| Last 3 months.[1] From US$82 billion to US$66 billion. Today,
| US$200 million was cashed out. Every few days, their market cap
| drops suddenly. At this rate, in a few months we'll find out how
| much backing Tether really has, because it is being paid out.
|
| Stablecoins have two stable values: 1 and 0.
|
| [1] https://coinmarketcap.com/currencies/tether/
| marcell wrote:
| Tether's market cap dropping without a price drop is indication
| that they are liquid and able to handle (to date) almost $20
| billion in withdrawal over a 1 month period. That is impressive
| and a sign of their robustness. They are passing a stress test
| so far.
|
| Their blog counters much of the FUD out there:
| https://tether.to/en/news/
| EwanToo wrote:
| I think this FT article suggests the blog isn't entirely
| comprehensive
|
| Tether's mystery commercial paper exposure -
| https://on.ft.com/3yzXTua via @FT
| oldgradstudent wrote:
| Madoff was able to handle withdrawals until one day he
| wasn't. Only then the Ponzi collapsed.
|
| This is not a very good way to distinguish a fraud from an
| honest business, especially if you're not the one who already
| withdrew.
| kranke155 wrote:
| "FUD" is what all the coiners say it all is until the blog
| post happens and it's all over. It was the same with LUNA.
|
| Any intelligent and comprehensive assessment of the
| information on tether will tell you that it's likely to be
| outright fraud.
| roywiggins wrote:
| It seems like it would be pretty binary. That is, withdrawals
| would be orderly... until they are suddenly _not_. It 's not
| very good evidence for the state of their backing _now_.
| Maybe they 've chewed through all their liquid assets and
| will explode tomorrow, maybe not.
|
| That is, withdrawals wouldn't shake the Tether price at all
| until someone is told "no you can't withdraw today" and
| decides to sell their Tethers on the market at a discount
| instead of withdrawing at par.
| Animats wrote:
| _" The valuation of the assets of the Group have been based
| upon normal trading conditions and do not reflect an
| unexpected large-scale sale of assets, or the case of any key
| custodians or counterparties defaulting or experiencing
| substantial illiquidity, which may result in materially
| different or delayed realisable values. No provision for
| expected credit losses was identified by management at the
| financial reporting date."_
|
| Yesterday, Voyager could have said that.
| adrr wrote:
| Whats the limit on withdraws before they have liquidity
| issues? Easiest way to make investors confident is due a full
| audit with a top 4 auditing firm.
| marcell wrote:
| https://tether.to/en/transparency/#reports
|
| They claim 85% cash/cash equivalents, 15% less liquid
| assets. Cash equivalents is broken down also, 55% is
| Treasury bonds.
| adrr wrote:
| Thats meaningless unless it's an audited by a top 4 firm.
| TedDoesntTalk wrote:
| You mean like Earnst & Young who was just fined $100
| million for overlooking cheating by their employees on
| the ETHICS portion of the CPA exam? I agree something is
| severely broken about Tether, but it's also clear that
| auditing firms can be crooked, too. I would not trust an
| audit to expose Tethers shortcomings. After all, the
| auditors can only report on the documentation provided to
| them ... they specifically do not determine the
| legitimacy or validity of the documents provided (iow,
| false documents are not vetted in any way).
|
| Remember WireCard's fraud? If not:
|
| https://en.m.wikipedia.org/wiki/Wirecard_scandal
|
| E&Y: https://www.msn.com/en-
| us/money/markets/ernst-26-young-cheat...
| propogandist wrote:
| they have committed to being audited by a Top 12
| accounting firm
|
| https://twitter.com/WatcherGuru/status/153881506029806387
| 3
| chaostheory wrote:
| Tether is an inadvertent pump and dump scheme similar to Mt Gox
| that is surprisingly still working.
|
| https://www.theverge.com/22620464/tether-backing-cryptocurre...
| 2OEH8eoCRo0 wrote:
| They just keep launching coins in a desperate attempt to raise
| capital. They are launching a new coin pegged to the British
| pound.
| ploppyploppy wrote:
| This isn't "launching coins in a desperate attempt", it's
| providing stablecoins in the FIAT currency that the market
| would want - in this case one of the world's most popular
| currencies.
| ww520 wrote:
| There's a myth that Voyager is FDIC insured. It's pure marketing.
|
| Voyager has an omnibus account with the Metropolitan Commercial
| Bank where Voyager's customers deposit their money. Voyager acts
| as the money manager of the omnibus account and has absolute
| control over the money.
|
| Metropolitan is a member of FDIC and is FDIC insured. In the case
| of the Metropolitan bank failing, the FDIC insurance kicks in to
| cover any loss of the omnibus account upto 250K. However, Voyager
| is NOT a member of FDIC and is not FDIC insured. In the case of
| Voyager failing, the money is gone.
|
| Voyager customers hoping FDIC coming in to cover their loss are
| going to have a rude awakening.
| Ancalagon wrote:
| I interviewed with Voyager just before the drop in stocks. It was
| a pretty arduous process iirc, glad I didn't make it through.
| Barrera wrote:
| > We are in discussions with various parties regarding additional
| liquidity and the go-forward strategy for the company. While we
| don't have anything else to share today, we are working
| diligently and hope to have more information to share soon.
|
| Translation: we are insolvent. The action we have taken prevents
| a run that will wipe out our working capital. We have been
| running a fractional reserve all along.
|
| This is getting tedious.
|
| Also: Voyager's alleged debtor, 3AC, just filed for Chapter 15
| Bankruptcy:
|
| https://www.bloomberg.com/news/articles/2022-07-01/crypto-he...
___________________________________________________________________
(page generated 2022-07-01 23:00 UTC)