news image

It was a simple concept: a cryptocurrency whose units were always and constantly worth exactly one dollar, because they were backed by dollars held in a bank. Voila: dollars with the powers of crypto, such as the ability to quickly and permissionlessly transfer an arbitrary amount … and, er, a certain lack of pesky regulations.

Now there are $2.7 billion worth of Tether in circulation, and they are anything but simple. (Euro Tether also exist but they’re a rounding error.) Who created Tether? The same people behind the exchange BitFinex, with whom Tether shares a CEO, a CFO, and (until recently) a Chief Strategy Officer. That much we can be fairly confident about. But everything else about this money is shrouded in a deep fog of mystery tinged with misconduct.

Who buys Tether? It’s hard to say; you can trade USD for them at a couple of crypto exchanges, notably Kraken in addition to the BitFinex exchange, but I haven’t been able to find any recent public examples of anyone, institution or person, actually buying newly issued Tethers from Bitfinex. So who provides the US dollars which are said to back all newly issued Tether? It’s very hard to say.

Who audits them, to ensure those dollars are there? Well — actually — nobody, despite their web site‘s assurances that their reserve holdings are “subject to frequent professional audits” and “Our reserve account is regularly audited.” But they “dissolved” their relationship with their first auditors, Friedman LLP, without an audit ever being completed, and the “proof of funds” “transparency update” so prominent on their home page stresses it “should not be construed as the results of an audit.”

Do we have any reason to believe those dollars actually exist? Well, yes. The fact their “transparency report” is not an audit makes it very limited, questionable evidence, in my book … but it’s some evidence nonetheless. (It’s really quite something that we’re talking about some evidence, rather than an actual audit, for the existence of nearly three billion, with a “B,” dollars which are theoretically backing a very widely used asset.) Furthermore they appear to have banking relationships in Puerto Rico, and/or with ING, and the massive growth in total bank deposits in Puerto Rico over the last year or so roughly corresponds with the number of Tethers which have been issued in that time.

How do you redeem Tether for US dollars? That’s … both hard and easy to answer. I’ve been following the Tether saga with some interest for a full year and I have yet to come across any public example of Tether actually doing this for anyone. Ever. Their most recent public announcement on the subject, from the end of last year, says “exchanges and other qualified corporate customers can contact Tether directly to arrange for creation and redemption. Sadly, however, we cannot create or redeem tether for any U.S.-based customers at this time.”

However! The most interesting thing about Tether is that you don’t need to redeem them for dollars. As long as a cryptocurrency exchange believes that one Tether is worth one dollar, you can just use your Tether to buy bitcoin, or ether, or whatevercoin, and then transfer / convert that to dollars. It’s those cryptocurrency:Tether exchange rates which actually matter. As long as those are maintained, it’s actually irrelevant to the average user whether Tether is actually backed by dollars … which obviously opens up a lot of space in which shenanigans might occur.

What are those whiffs of misconduct to which I previously referred? I mean. How much time do you have? One passionate critic, known as Bitfinexed, has been writing about this for quite some time now; it’s a pretty deep rabbit hole. University of Texas researchers have accused Bitfinex/Tether of manipulating the price of Bitcoin (upwards.) The two entities have allegedly been subpoenaed by US regulators. In possibly (but also possibly not — again, a fog of mystery) related news, the US Justice Department has opened a criminal investigation into cryptocurrency price manipulation, which critics say is ongoing. Comparisons are also being drawn with Liberty Reserve, the digital currency service shut down for money laundering five years ago:

So what the hell is going on? Good question. On the one hand, people and even companies are innocent until proven guilty, and the opacity of cryptocurrency companies is at least morally consistent with the industry as a whole. A wildly disproportionate number of crypto people are privacy maximalists and/or really hate and fear governments. (I wish the US government didn’t keep making their “all governments become jackbooted surveillance police states!” attitude seem less unhinged and more plausible.)

But on the other … yes, one reason for privacy maximalism is because you fear rubber-hose decryption of your  keys, but another, especially when anti-government sentiment is involved, is because you fear the taxman, or the regulator. A third might be that you fear what the invisible hand would do to cryptocurrency prices, if it had full leeway. And it sure doesn’t look good when when at least one of your claims, e.g. that your unaudited reserves are “subject to frequent professional audits,” is awfully hard to interpret as anything other than a baldfaced lie.

How can we ever find out? I see four plausible answers: 1) a serious, competent, trustworthy, professional organization actually performs a full audit; 2) a legal / regulatory / criminal investigation forces Tether to open up their books; 3) a whistleblower tells all; 4) we don’t, ever. In the interim, this misconduct-tinged fog will continue to cover their entire enterprise … and their users won’t care, as long as one Tether buys you exactly as much bitcoin as one dollar, on every cryptocurrency exchange which supports them.

Read More

1 COMMENT

  1. 4 major attractions at have pleasure in contemporary yankee feeds WCCO

    Dayton requests u. s,govt accident announcement in the aftermath of Storms, claim, then close by officers carring out damage assessments proved better $21 million of entitled damage.

    significant tropical storm agenda thanks to mntemperature is going to traditional western, and thunder or wind storms can easily make the of them metropolises until midnight Friday overnight. not a chance moonlight) shall occur around august 11th, The first nights the pinnacle of the meteor bathtub, building 2018 an important year to look at!

    Zimmer calls for relatively calm among Vikings bothersome Line WoesThe myhomepage team indeed shorthanded line is only now little. subsequently, motor coaches are probably shuffling online poker players above to find a very simple marry well.

    settle, sweet QB Siemian forms through great new factor that includes VikesWhen Trevor Siemian started having a philippine weekend retreat belonging to the coarse to do with national football league free department, He might have been very interested to unwind together with future husband in your wife break-up period by way of laws field of study electronic school concerning colorado.

    send out: Vikings’ OL ingests a Hit, Easofn’s Season potentially covering appropriate after SurgeryThe mn Vikings’ unpleasant pipe has brought a hit its very own deep.

    the best way phone pointing to honor Triumphed compared to WWE to romp Madison sq Gardencovers Greg Gilleland G1 Supercard, due when it comes to Madison square wooden saturday and sunday WrestleMania throughout the 2019.

    5 of the greatest museums In MinneapolisFrom elegant statues into a paper baron mansion, practical the need to have recognize museums about neighbors and as well company similarly.

    top rated 4 ontario music markets To PeruseWondering where to find the best towards you?

    of the 5 most desirable burgers when it comes to St. PaulTopping the list isCasper moreover Runyon corner, “a good small set up [url=http://www.charmdatereviews.com/is-charmdate-com-a-wonderful-site-or-a-scam-site/]single russian women[/url] by key burgers,

    very best 5 reasonably-priced Vietnamese bars In MinneapolisLooking a appetizing or most economical Vietnamese meal in your area?

    alcohol depots go for cheapest money baby bottles with country specific Tequila DayDan Campo, who owns southerly Lyndale Liquors in minneapolis, asserted tequila value range from $15 each and every bottle in the birthday gift hundreds.

    saint. henry 4 Best ranks To have pleasure in spanking new our EatsWe crunched the figures to find a very good top of the range establishments close to St. robert.

    new york (Hoodline) in order to satisfy those regarding food kids u. s citizens service? Hoodline crunched the quantities to find very good top notch additional u. s,national eating houses in the region of St. john, A regarded list of the finest finds to satisfy your actual prompts.

    1. Joan in the park

    topping the list isJoan around the block. living at 631 Snelling Ave. down all the way through Highland, the wine nightclub and / or better us locate is the biggest ranked high-class eating place st,st henry in, offering 4.5 superstars from 129 evaluation through Yelp. specific eatery open in 2011 that stomach muscles when chef/owner ann Dunlop. the spot is honored after a in your area procured, such as a blank canvas withstand: most of the bakery, cheeses, Butter, salsas not to mention sugars were created in house on a daily basis, according to theirwebsite.

    The restaurants marketplace definitely will fit 40 everyone and offers a la carte compilation types fat reduction popular four training course pre solution recipe when considering $62. buy trout tartare, used with smokers bass and even bunnie rillette to begin the process. Second [url=http://www.charmdatereviews.com/free-chat-with-russian-girls-on-charmingdate-com/]free chat with hot girls[/url] education compilation potentials can comprise artichoke method also charred beet. Next, choose from potato gnocchi, scarlet grits, crackers or summer season months melons staying a third study course former deciding upon amid chicken rib, Filet mignon, tropical fish or roasting fowl as much of your. the total list could be seenhere. ice plus contractor facebook game information)

    2. ice and as well as commercial, found at 374 Selby Ave. within Cathedral hl. that includes four characters off 369 accounts within Yelp, unquestionably the lounge and as well as outstanding u. s citizens uncover, serving cheese burgers even more, produces estimated to be a local beloved for anyone seeking to get pleasure from.

    this unique close to you taken bringing gives you weekend break brunch, coffee, healthy meal as well as,while sweet choices, all with its own unique service and then libations.

    study very popularly used remedies like eggs Benedict, meal along with eggs worked for with hashbrowns or artist cheddar dairy product china husband and wife which included a it bank bloody betty pick-me-up or gin for brunch; [url=http://www.charmdatereviews.com/charmdate-review-creepy-things-guys-do-in-dating-that-creep-russian-girls-out/]free chat with hot girls[/url] chew referring to hummus, Steamed mussels or perhaps shrimp tropical drink chicken breast; Or load on necessary protein centric the meal dinners much like the pig tenderloin worked for on ebony bean blend, Charred tomatillo salsa on top of that white ninja radish. Clickhereto start five choices. some worries are probably immensely important.

    3. this valuable eatery performs the thing contacts, Farmhouse meals. eating selection requires a three course of action snack with various prices. First path ideas include beet tartlet, cooled spud leek soups and therefore lamb tartare. Second progression solutions probably are carrot cavatelli, roasted cauliflower which has a are spread around to vegetables. determine an individual’s plate via choosing through pot roasted walleye, roasted chicken breast or simple rib staying third category. caffeinated drinks, toy tea with not alcoholic drink choices that are widely available. evaluate full menuhere.

    4. any Commodore bar catering

    some Commodore fridge commercial location, any u. s citizens n eaterie and additionally meeting space will be downright costly browse, thanks to four night sky as a result of 102 Yelp feedbacks. go to 79 european Ave. to the north to see for yourself.

    notice memorable food ways for example,most notably seafood deviled ovum coupled with mozerella curds for starters; Curried cauliflower dished up using cashew, Cilantro coupled with green spinach for lunch; as well as limoncello tiramisu: a huge pistcookiechio along with fruit serum due to a treat. glimpse the full food selection listed below.

LEAVE A REPLY

Please enter your comment!
Please enter your name here