Showing posts with label tether. Show all posts
Showing posts with label tether. Show all posts

Bitfinex fires back, claims NY Attorney General lying - $850 million not lost, it was wrongfully seized!

The story has been developing over the last 24hrs, and began with a press release and Fortune publishing the NY Attorney General's claims that Bitfinex used "illicit transactions to mask $850 million in missing funds."

Those illicit transactions, they claim, were in the form of their stablecoin 'Tether', and Bitfinex had dipped into reserves and used those funds to fill in the gaps left by the missing $850 million.

Now, Bitfinex has weighed in - clearly angered by the situation, saying the Attorney General's claims are "riddled with false assertions".

Bitfinex asserts the funds aren't missing at all, they're being withheld, stating that "these Crypto Capital amounts are not lost but have been, in fact, seized and safeguarded. We are and have been actively working to exercise our rights and remedies and get those funds released."

But why would the NY Attorney General do this? They say it's because of the recent probe into cryptocurrency exchanges being conducted by the Attorney General's office, which some say overstepped authority by demanding documents without reasonable suspicion. The probe includes all of the top exchanges, Coinbase, Gemini, bitFlyer, Bitstamp, Kraken, Bittrex, Poloniex, Binance, Tidex, Gate.io, itBit, Huobi, and of course, Bitfinex, which apparently did not hand over all of the data requested.

But who is withholding this massive sum of Bitfinex's funds? They won't say, and expressed frustration that they're being targeted instead of assisted in the quest to get them returned, saying "The New York Attorney General’s office should focus its efforts on trying to aid and support our recovery efforts."

They also insist, customers have nothing to fear, promising that "Bitfinex and Tether are financially strong" and that they are "good corporate citizens and strong supporters of law enforcement."

It's hard to predict how this will end, Bitfinex has repeatedly found themselves at the center of accusations that seem to fade away, never concluding with clear proof of their innocence or guilt.

It appears they've structured their business to be deliberately difficult to track from the outside. That's brought about critics who say those are the actions of a company with dark secrets, and defenders who say it's a smart move to prevent funds being seized in the case of sudden government overreach. 

It's common practice for exchanges with international clients to have funds held around the globe, instead if having to trust all of those governments, it can be easier to trust none of them and try to keep things as under-wraps as possible.

But that's why this time is different - their defense isn't 'we don't release that information to protect funds from being seized' - they're saying 'the funds have been seized'.

This time, they can't withhold the specifics - there's no end that doesn't involve releasing the records in question, or the Attorney General's accusations proven.

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Author: Mark Pippen
London News Desk


Following a blow from Binance, Tether swings back saying anyone who wants to exchange Tether for USD can - directly through them.

Binance has replaced the "USDT" symbol on their exchange - it no longer means Tether, but rather a symbol that represents their entire stablecoin market, a collection of multiple stablecoins.

Our readers were the first to see this coming, when an insider within one of the stablecoin projects leaked exclusive information with us regarding the discussions between their leadership and Binance (read that article here).

Well - it all turned out to be true, a new statement from Binance reads:

"Binance has renamed the USDT Market (USDT) to now be a combined Stablecoin Market (USDⓈ). This is to support more trading pairs with different stablecoins offered as a base pair.

We will make a further announcement soon on the exact pairs to be initially moved or added to this market.

Please note that USDⓈ is not a new stablecoin: it is the symbol of Binance's new stablecoin market."

What's interesting here is this at least appears on the surface to be a real jab at Tether, for the simple fact that "USDT" is their symbol, they trade under on every exchange where it's used - and Binance basically just said 'sorry, not anymore'.

But today - Tether just swung back.  Re-opening their "Direct redemption"portal that allows anyone to buy Tether using USD or Euro, and more importantly - exchange Tether for fiat currency.    In a statement Tether says:

"Due to the unexpected rush of new cryptocurrency traders over the last year, Tether grew at an unpredicted rate, quickly making the initial model (enabling direct redemption of Tether to fiat through its native platform) unsustainable. In this environment, it made sense to take the stress off growing pains by flexing the existing model to harness the established infrastructure and security of Bitfinex, which was built to withstand a much larger volume of customers. Those wishing to redeem could do so 1:1 via Bitfinex with whom we had a business to business relationship.

Against this backdrop and with alternative stablecoins entering the market, Tether has maintained its stablecoin market domination, but naturally differentiated, with heavy adoption amongst professional investors.

Now, thanks to stronger banking as a result of our new relationship with Deltec, Tether is able to return to its original vision of having a wallet for creating and redeeming directly on its own platform without having to rely on a third party. This update allows the immediate withdrawal of Tether to fiat (1:1), with the ability to acquire coming soon."

This is Tether saying "we have the money".  But as one person in a telegram channel i'm a member of stated "we'll see" because for many, the mistrust of Tether will continue, adding "they could be offering this knowing not everyone is going to exchange their Tether for USD at once. Smart way to look legit, but we still have no idea what their real USD reserves are".
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Author: Mark Pippen
London News Desk


Tether is officially under investigation... but what if they're totally INNOCENT?

First off - don't even try to imply we're shilling for Tether.  In fact we're one of the first publications to touch the accusations against them - ironically one year ago today exactly (link) and in over 5 follow-up articles on the subject. 

Our stance is - just do the audit and put all this to rest already, and the longer they go without it, the more suspicious they look.  For that reason, Tether has largely brought this upon themselves.

But now with the news today of the the DOJ officially investigating them, and having already covered the accusations against them to death - let's examine another angle.

What if they're innocent?

Whether the accusations turn out to be true or not the fact is it took a year of non-stop bad press before an investigation was even launched.  Frankly, the reason for that is - it just isn't totally clear anything even happened.

On that note, here's a few factors worth considering:

Bitfinex isn't even in the top 3 exchanges that hold the most Tether.

Binance, Huobi, Poloniex, then Bitfinex in 4th place when it comes to who holds the most USDT.

The upside to these exchanges listing a USDT pairing option is obviously the more trades they get people to execute, the more trading fees they get to claim.  But there's no way the profits from these fees justify risking their entire business by working with Tether.

There's no doubt these exchanges looked into Tether as soon as the accusations against it surfaced - yet a year later, they're still using it.

The 'risk VS reward' for these exchanges just doesn't add up.

One of those exchanges is Binance, the world's top exchange.

Binance and specifically it's CEO are known for having very little tolerance for nonsense, and on the topic of Tether, CEO Changpeng Zhao (aka "CZ" in the crypto world) says:

“I haven’t personally seen their bank accounts but from a logical point of view they have so many profits from their regular exchange business, they don’t need to do anything crazy about the Tethering. I think the reason they cannot release their bank account details is because if they release whichever bank they’re using, then the bank account gets shut down” 

Could the explanation really be this simple?

Binance is also known for de-listing coins, and doing it fast - at the first sign of trouble. Yet Tether is still there.

Anonymous accusers.

At the root of the accusations against Tether are tweets and posts on Medium (a blog site anyone can post on) that then went viral.

Why not add validity to the claims by telling everyone who's making them?   There's no fear of legal repercussions against someone making truthful claims.

Did the price of Bitcoin REALLY need to be artificially pumped up?

Think back to when things got crazy beginning late 2017.  Among the people in my life who contacted me to say they just bought, or wanted help buying cryptocurrency were college friends I hadn't talked to in years, a friend of mine who's a radio DJ, another friend who's a professional swimming coach, another one who teaches 2nd grade elementary school - the list goes on.

Point is - everyone actually was buying Bitcoin, that wasn't in our imagination.

So in closing , sure, the accusations very well may be true and i'd even say there's a 'good chance' they are.

But... there's also a 'good chance' they aren't.

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Author: Mark Pippen
London News Desk


Tether's new banking partner ALREADY under fire - accused of accepting illegally laundered funds...

Tether just can't catch a break.  November was one hell of a month for the stablecoin from the creators of the Bitfinex exchange, that had them facing a new wave of accusations, snapping back at their critics, and then we broke the story that the top exchange Binance was actively seeking new Tether alternatives to add to their exchange.

Trying to calm the waters they announced new banking partner Deltec Bank & Trust, to act as an independent holder of the USD funds backing their cryptocurrency, which claims to have $1 in the bank for every 1 Tether token issued.

But today, news coming out of Brazil via the popular "O Globo" newspaper reports that bank is under investigation from Brazilian authorities.

The accusation however doesn't involve Tether, but rather a Brazilian official who is accused of transferring $25 million in laundered funds offshore, to another bank based in Panama, then having it  re-enter Brazil through Deltec Bank & Trust - a transaction that some say should have been immediately flagged.

But here's what all this does call in to question:  Tether's statements earlier this week, stating the high standards the bank has, and how taking Tether on as a client should be seen as a sign that their operation is on the up-and-up.  As Tether said in that statement:

“This included, notably, an analysis of our compliance processes, policies and procedures; a full background check of the shareholders, ultimate beneficiaries and officers of our company; and assessments of our ability to maintain the USD-peg at any moment and our treasury management policies.”

Following this news, Deltec Bank & Trust's endorsement doesn't mean much - and the rumors of Tether not having the funds to back up the $1.7 Billion worth of tokens in circulation continues.

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Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com Twitter:@RossFM
San Francisco News Desk


CoinBase teams up with Circle, adding new stable coin to their platform - as the industry takes another big step away from Tether...

Today Coinbase and Circle announced an alliance under what they're calling the "CENTRE Consortium".  In this arrangement, Coinbase has added the first stable coin to their platform - Circle's "USD Coin" which officially launched in May of this year.

"Starting today, Coinbase customers in supported jurisdictions can buy, sell, send and receive the USD Coin stablecoin (USDC) at Coinbase.com and in the Coinbase iOS and Android apps. US customers outside New York state can buy and sell, and customers around the world can send and receive. More geographies will be available in the future." says CoinBase in a blog post.

Stable coins are intended to always be worth $1 US Dollar, and each one issued backed by $1 sitting in a bank.

The current top stable coin, Tether (USDT) is accused of not having that money in the bank to back up the USDT sitting on cryptocurrency exchanges, and last week these fears lead to a massive dumping of the token that had it trading below the $1 "stable" price.

Circle and Coinbase are encouraging other exchanges to join them in offering USD Coin, between this announcement, and the story I broke last week of Binance looking to add more stable coins to their platform - I believe we're looking at exchanges implementing a smooth transition away from Tether, just in case the worst of the rumors are true.

Now if the criticisms of Tether end up to be true, by the time we find out - it won't matter.  The more cryptocurrency is backed by stable coins that could pass an audit, the less impact bad news from Tether could have. At least I believe that's the plan we're seeing in motion now.

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Author: Adam Lee 
Asia News Desk

Tether is about to take another hit, as top exchange Binance scouts for even more stablecoins to add...

One thing is becoming clear, no matter if you believe in the claims made against Tether or not, the days of it dominating as "the stablecoin" of the market are officially coming to an end.

October has been nothing short of a total disaster for Tether, it all started when the rumors that have been floating around the cryptocurrency world went mainstream - with outlets like Forbes, Bloomberg, and The Washington Post all publishing stories explaining why cryptocurrency traders were concerned.

That was followed by the markets reacting, and Tether losing approximately $800 million in market cap - just in the last 10 days. $610 million of that removed from circulation by the company - a move they've done before, but this is the largest amount to date.

Now, we have confirmed the current top exchange in the world, Binance, is searching for more stablecoins to add to their platform - also worth noting, Binance had to suspend Tether withdraws for a short time on Monday, so many people pulling out caused "network congestion".

Speaking to a contact at one of these other stablecoin projects , he confirmed "our CEO has talked to people from Binance 3 times in the past week now" he asked for his project to remain unnamed for now, but said I could share the news - which made me wonder 'but if I share what you just said, won't they be able to figure out that you're my source?'  in which he replied "nope, because I also know there's several others they're evaluating right now too".

To be fair, Binance had already broken Tether's stablecoin monopoly on their exchange earlier this year when they added TrueUSD and Pax. So it's nearly impossible to prove that adding more is a response to what's been going on with Tether.  But a fair guess would be that all the Tether drama put those efforts into overdrive.

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Author: Adam Lee 
Asia News Desk

Bitfinex goes to war with their critics, claiming they DO have the funds to back up their holdings - but the critics aren't satisfied with their story...

Back in November of last year I published an article titled 'Did Tether FAKE a hack to cover up crimes? We dive into the conspiracy theory.' (Link)

It outlined the theory that Bitfinex, through their stablecoin "Tether" (USDT) had been 'printing money' and the claims some were making that they faked being hacked - as a creative way to balance their books.

Things reached a new level of anger, when a couple days ago an anonymous blog post on Medium claimed to have the inside information - that Bitfinex was in fact committing fraud.

Now - that Medium account is suspended, the post deleted - and Bitfinex is fighting back. Sharing this post to their blog...
"Bitfinex is not insolvent, and a constant stream of Medium articles claiming otherwise is not going to change this. As one of only a very few exchanges operating since 2013, with a small team and low operating costs, we do not entirely understand the arguments that purport to show us to be insolvent without providing any explanation about why." says the company.

They then went as far as sharing their wallet addresses for everyone to audit:


Adding "The wallets represent a small fraction of Bitfinex cryptocurrency holdings and do not take into account fiat holdings of any kind."

This is just the latest move from Bitfinex where they claim they're providing transparency - the critics however want more, and are wondering why they're avoiding conducting a Tether and Bitfinex full-scale audit by an independent outside firm.

"Yes, we’re going to trust someone that flees friendly jurisdictions like Japan that simply want transparency, that they will be transparent." says their most vocal critic, who goes by "Bitfinexe'd" on Twitter.

Until that audit happens, they say they'll remained convinced Bitfinex has something to hide.
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Author: Ross Davis
E-Mail: Ross@GlobalCryptoPress.com Twitter:@RossFM
San Francisco News Desk


A look at 3 other 'stable coins' that could to destroy Tether's market dominance...

The volatility of crypto makes it impractical to use as an everyday transactional currency. Until the markets mature and price levels out, the only hope of mass adoption lies in the foundation of a viable “stable coin”, or a cryptocurreny pegged to a stable asset like the U.S. dollar. Many believe that the emergence of a strong stable crypto will herald an exodus from fiat into the world of internet money.

Currently there are more than 8 coins vying for this position on CoinMarketCap.com. They all have slightly different constitutions and proposed uses. Here are three of the most popular, and what makes them distinct.

1. True USD - An ERC-20 token pegged to USD. TUSD is a product of TrustToken, a platform which will eventually have tokens pegged to other assets like bonds and real estate. TUSD does not currently have many trading pairs, but it can be bought with BTC on Binance, Bittrex, Upbit and others.

2. Dai - From decentralized autonomous organization MakerDao, Dai is pegged to USD but backed by Ethereum. It runs on the ETH blockchain as a smart contract and is therefore public and transparent. Dai is not yet available on major exchanges, but can be found on Bibox and Hitbtc.

3. Havven - (Nomin) Also a decentralized organization, Havven is a blockchain whereby stable coins called Nomin are transacted. Havven is still speculative as it hasn't been tested on exchanges yet. Buy on Kucoin or Gate.io.

For now, coins like Tether and True USD are mainly used are safe-haven during Bitcoin corrections, though it should be noted that trading any crypto this way comes with risks. None of these products are perfect, they all have flaws, questionable origins, or over-complicated whitepapers. In some ways it has become a race for the prize. One thing is certain: any semblance of mainstream adoption relies heavily on the promise of a stable, fast, secure, and available medium.

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Author: Jeffrey Byron
Los Angeles News Desk


The Tether debate - can it crash the market, or not? And my conversation with Charlie Lee on the situation...

Back in November of last year I published an article titled 'Did Tether FAKE a hack to cover up crimes? We dive into the conspiracy theory.' (Link)

It outlined the theory that Tether had been 'printing money' and the claims some were making that they faked being hacked - as a creative way to balance their books.

Today Bloomberg published an article that's being shared everywhere in the cryptocurrency world, 'U.S. Regulators Subpoena Crypto Exchange Bitfinex, Tether' (Link)

What's unclear now is - does a subpoena even matter? Bitfinex banned US customers from their exchange last August, so at least on an official basis - they're not operating in the United States.

Now I want to make one thing clear - I do NOT believe if the worst is true, that it would crash the crypto markets.  What could however crash the markets is fears that it could crash the markets. Sounds silly but it's really that simple.

But, there's a difference between what I think, and Litecoin creator Charlie Lee thinks.  I do believe, that there are valid reasons it could slightly adjust the value of multiple coins, but any drop larger than 10% or so would be people selling out of fear. Charlie Lee however believes a Tether collapse, should only effect Tether itself.

We discussed this earlier today on twitter:



For the record - I like Charlie, just a friendly debate.  But the point I think we cannot forget is - Tether is not just another altcoin, because it doesn't function like one.

Other coins value is based on what people are willing to buy and sell them for on exchanges.  Tether however, is given it's value by believing a USD reserve equal in value to Tether's market cap exists.

If that reserve doesn't exist - the value of anything purchased with Tether is thrown into question.

What do you think? Tweet me @RossFM
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Author: Ross Davis
San Francisco News Desk


Tether/Bitfinex could crash Bitcoin if their numbers don't add up, and Bitfinex lawyers up!


A couple weeks ago, we were really the only news site touching this. Massive claims of alleged fraud being placed on the Bitfinex exchange, and the currency they're closely associated with "Tether" - so if you missed that article - first read "Did Tether FAKE a hack to cover up crimes? We dive into the conspiracy theory..."

Today, there's been two major developments. 

First, this article from Fortune Magazine. In which Fortune outlines how, if the conspiracy we covered earlier turns out to be true, it could be a disaster for Bitcoin.

Secondly, Bitfinex announced they have hired lawyers, ready to go after those spreading the claims against them which they insist are false.  Stating today:

“In recent months, certain parties and their associates have made false and unsubstantiated claims against Bitfinex, engaging in potential market manipulation activity that is dishonest and unlawful.”

Their most vocal critic, who goes by "Bitfinex'ed" on twitter is expecting to be a target and is tweeting for donations to his "legal defense fund".  In interest of full disclosure - even Bitfinex'ed has been accused of being part of a conspiracy as well, spreading misinformation.

We'll be watching for what happens next!
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Author: Ross Davis
San Francisco News Desk


Bitcoin price begins to plummet as Tether hack announced....


As shockwaves go through the cryptocurrency world as Tether announced a major hack, Bitcoin prices are going for a dive.

Down nearly $300 over the last hour, sending it back under the $8000 mark we just began celebrating.

We are awaiting news if Tether's recovery efforts will be a success, which could send the price shooting back up, or even lower.

**UPDATE**
Looks like a quick recovery from the FUD the hack caused.
Bitcoin is back to $8100 just 2 hours later.!

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Author: Mark Pippen
London News Desk


Tether HACKED - Possible $30,000,000+ stolen...

BREAKING: The popular wallet service Tether has been hacked.

In a message just sent out to it's users they state:

 "$30,950,010 USDT was removed from the Tether Treasury wallet on November 19, 2017 and sent to an unauthorized bitcoin address. As Tether is the issuer of the USDT managed asset, we will not redeem any of the stolen tokens, and we are in the process of attempting token recovery to prevent them from entering the broader ecosystem. "


The full message can be read below...


Tether's full statement

We will be following this story for further updates...

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Author: Ross Davis
San Francisco News Desk