[HN Gopher] It amazes me how many people are blissfully unaware ...
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It amazes me how many people are blissfully unaware of the rampant
tether fraud
It seems all anyone cares about with crypto is how much richer they
get in dollar terms when cryptos go up. And yes, those who were
busy explaining why Ethereum is garbage, **coin, etc, and why only
they know better, would have been 10% richer in just 2 days. If
crypto is supposed to replace other currencies, then you don't get
richer if it is worth more in dollars. The entire point is to not
use dollars. But nothing is priced in crypto. If it was, there
wouldn't be enough supply. Also nobody would ever buy anything with
it, because why spend 100 on something today when 50 will buy it
tomorrow. So crypto has devolved into nothing more than a scheme
to bid up whatever coin of the day becomes a MEME darling and FOMO
kicks in. You don't want to lose out on getting rich, do you?
Don't give me the crap that DeFi everything is around the corner.
It's the same thing as automated driving. It's been right around
the corner for years. Windows 95 hit and the entire world was
online with email and www everything within three years. Crypto is
going on more than a decade with no better use case than day one.
Other than a few thousand whales who got super rich when they got
the masses to bid up the coins. It amazes me how many people are
blissfully unaware of the rampant tether fraud and the effect it
could have on the whole ecosystem. This is a view from a good
friend of mine who is an expert on the subject and well in the
know. Nobody knows where the USD supposedly backing it goes. Most
of it is in "commercial paper" they said, but the investors who
work in that industry say they've never heard of them. This seems
impossible because at their scale, that would make them, like, the
5th largest commercial paper investor on Wall Street. How could
commercial paper investors not heard of them? Unlike Bitcoin, Eth,
and other coins, Tether was always claimed to be backed by
something which ensured its's stable value. Tether the company
claims that their tether coins are each worth $1. There are now
>$60Bn worth of Tether coin issued. With that much money they'd be
a very serious private financial institution, and yet they only
have 13 employee's. They have never been audited by any independent
third party. They have repetitively lied about who owns the company
(the same people who own Binance, the world's largest crypto
exchange own Tether, and yet did not disclose that until it was
found out). They have receptively changed their story on what backs
Tether coin (originally each coin had $1 in a bank account to back
it, now it's majoritively unspecified "commercial paper"). There is
nothing which proves that Tether actually is backed by anything and
the billions in new Tether coin which are minted could very well be
worthless. Institutionalized investors allegedly sending billions
of dollars to Tether, despite tether lying about their reserves,
committing fraud by claiming to be fully backed when they were not,
and reported by Bloomberg to be under DOJ criminal investigation
for bank fraud. There was never anywhere near a trillion dollars
put into the crypto system. The miners created multi-millions of
imaginary tokens without putting any dollars into the system. Those
miner imaginary tokens came out of thin air, not from people
investing dollars into the system. If only 10% of those tokens are
cashed out instead of "hodl", the $50 billion in tethers and few
other dollars would instantly be depleted. The miners have a lot
more than 10% to sell. It is a classic Ponzi. All is fine when
more people are sucked into putting in dollars (to pay the miners
who put in zero dollars). But when people want to cash out, there
is not enough dollars in the entire Ponzi to pay 10% of the
imaginary tokens. The small amount of cash in the Ponzi runs out
and the Ponzi collapses. It is very simple and does not require any
complex conspiracy theory.
Author : JSDevOps
Score : 10 points
Date : 2022-11-12 20:59 UTC (2 hours ago)
| boeingUH60 wrote:
| > the same people who own Binance, the world's largest crypto
| exchange own Tether
|
| Do you have a source for this? Because Binance has its own
| stablecoin (BUSD)...I think the correct exchange is Bitfinex, not
| Binance
| atdrummond wrote:
| Correct. Also, BUSD is run by Paxos.
| propogandist wrote:
| and it's part of the Binance Ponzi;
|
| >Tl;Dr: Paxos issues something called BUSD on Ethereum, which
| is regulated. Binance issues something that's kinda sorta
| related but not really, that's fully unregulated, only usable
| in their private chain, ALSO called BUSD, that is just
| monopoly money. They happen to have the same name, but hey,
| you fell for it!
|
| >Related quote from the link:
|
| >"Paxos issues two US dollar-backed stablecoins - Pax Dollar
| (USDP) and Binance USD (BUSD) - that are overseen by the
| NYDFS. These two tokens are very similar in design and
| reserve operations because they are regulated. Paxos and
| NYDFS agreed to the terms of the token in advance of issuing
| - this includes the stipulation that USDP and BUSD only be
| issued by Paxos on the ethereum blockchain at this time.
|
| >Our marketing partner for BUSD - Binance - issues a token on
| its BNB smart chain called Binance-Peg BUSD ... Note that
| Binance-Peg BUSD is strictly a Binance product; it is not
| issued by Paxos nor regulated by the NYDFS."
|
| > https://paxos.com/2022/04/07/busd-issued-by-paxos-on-
| ethereu...
|
| posted by HN user polygamous_bat:
| https://news.ycombinator.com/item?id=33540628
| spxd wrote:
| Another crap. My friend told me...read first.
|
| Last year, Tether revealed that it held some cash but also bought
| a large amount of commercial paper, which is short-term corporate
| debt. This raised concerns given that Tether does not disclose
| exactly which companies it holds commercial paper from, and where
| those entities are based.
|
| But the company has been reducing the amount of commercial paper
| in its reserves. In the fourth quarter of 2021, commercial paper
| made up just over 30% of Tether's total reserves, down from more
| than 44% in the third quarter.
|
| "Over time we will keep reducing the commercial paper, we aren't
| finished yet with the reduction," Paolo Ardoino, chief technology
| officer of Tether and affiliated cryptocurrency exchange
| Bitfinex, told CNBC on Wednesday at the Paris Blockchain Week
| Summit.
| c7b wrote:
| Bloomberg News once tried to track down Tether's supposed
| commercial paper holdings [0]. It's a small market with just
| over a dozen major players, and Tether's claimed holdings would
| put them in the top 10. Bloomberg called a few of those firms,
| nobody had ever heard of or transacted with them. This smells
| of Maddoff 10 miles against the wind.
|
| [0] https://www.bloomberg.com/news/features/2021-10-07/crypto-
| my...
| Silverback_VII wrote:
| The effect of Tether was to massively inflate the price of crypto
| so as to suck in more dollars(even if they despise fiat
| currency). It's an unbelievable fraud and I'm somewhat surprised
| that it is tolerated considering how strict laws in other areas
| are(gambling for example)
|
| You say that many people are unaware but I would say that many
| are perfectly fine with the imaginary riches these schemes
| provide.
| Psychoshy_bc1q wrote:
| "cRyPTo" is a scam, focus on Bitcoin only.
| throwaway5959 wrote:
| If crypto is a scam, why isn't Bitcoin also a scam? It's the
| same technology right?
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