
Bitfinex fails to perform promised audits - wslh
https://medium.com/@bitfinexed/bitfinex-fails-to-perform-promised-audits-instead-they-have-a-shareholder-tell-everyone-its-all-965ae7037b5d
======
tlrobinson
USDT/USD dipping below $1.00 for the first time in awhile:
[https://coinmarketcap.com/currencies/tether/#charts](https://coinmarketcap.com/currencies/tether/#charts)

~~~
granaldo
Not first time, click all-time chart or check max timeline here
[https://www.coingecko.com/en/price_charts/tether/usd](https://www.coingecko.com/en/price_charts/tether/usd)
and you will see occasional dips. Its been +/\- from $1

~~~
joosters
The last time seems to have been in May 2017, when there were 'only' $60
million tethers floating around, compared to the $2.2 billion in existence
now...

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dillondoyle
If there really is such a strong need for this 1:1 USD type service why not
create a legit, fully transparent, US based company to compete. Use the float
to generate income. Even 1 or 2% on 100s of millions adds up.

~~~
bufferoverflow
Because you need a bank that would agree to something like that. And that's
what Tether has a problem with - all the banks dropped them.

~~~
JumpCrisscross
> _Because you need a bank that would agree to something like that_

And since the pitch is “we want anonymous international depositors to open and
close accounts with you,” with extra steps added, no bank will agree.

~~~
cesarb
Does it even need that? ETFs can keep their price stable with as few as five
or ten entities being allowed to trade the underlying basket of assets for the
ETF. Those who aren't allowed to directly exchange the assets for the ETF can
instead trade with those who are allowed, or trade with someone who can trade
with them. There's no need for everyone to be able to deal directly with the
ETF issuer, and the same should apply to USDT.

~~~
JumpCrisscross
> _There 's no need for everyone to be able to deal directly with the ETF
> issuer_

But there is the need for everyone to trust the ETF manager. Authorised
participants (APs) must trust they can redeem ETF units for a basket of the
underlying shares and vice versa. Other market participants, in turn, must
trust that process to manage tracking risk.

ETF managers earn that trust by contractually guaranteeing APs'
creation/redemption rights, being regularly audited like normal companies,
being regulated like securities companies, and having their holdings vouched
for by other market participants, _e.g._ banks, clearing and settlement
services, _et cetera_. Literally none of the preceding apply to Bitfinex nor
Tether.

More broadly, a structure like Tether is inherently incompatible with anti-
money laundering. No jurisdiction will let a bank say "these $2 billion are
held by unknown beneficial owners." If we wanted that, we'd just re-authorise
numbered, _i.e._ anonymous, bank accounts.

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Animats
If Bitfinex was publicly held, they'd have to file an "auditor changed"
statement with the SEC, and the auditor also has to file a statement about
what happened. That's to prevent companies from switching auditors when they
don't like the audit findings. But Bitfinex is private, and the SEC is about
protecting shareholders, which Tether holders are not.

Tether will probably collapse in the next big downturn. That's when Bitfinex
has to spend real money to buy Tether units back to prop up the price. Tether,
like a Ponzi scheme, seems to work as long as net inflow of money exceeds net
outflow. When it doesn't...

~~~
ThrustVectoring
The point of Tether, afaict, is to make a bunch of people bagholders while the
folks running it walk away with both the cryptocurrencies and whatever bank
account balances they managed to acquire.

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aviv
Never ever keep coins at an exchange. You have been warned. It's insane to let
them hold it.

~~~
BadassFractal
What is the best practice then? Mind sharing?

~~~
yla92
I am not sure about the "best". One way is getting a hardware wallet like
Leger Nano S[0]. It doesn't support "all" coins but popular coins like BTC,
ETH, BCH, XLM, LTC, NEO etc are supported.[1]. I use it and it's convenient,
so far.

[0]: [https://www.ledgerwallet.com/products/ledger-
nano-s](https://www.ledgerwallet.com/products/ledger-nano-s)

[1]:
[https://www.ledgerwallet.com/cryptocurrencies](https://www.ledgerwallet.com/cryptocurrencies)

~~~
Fnoord
Or a Trezor [1].

Funny how the price of both products has gone up. I purchased a Ledger Nano S
(unused as of now) for about 70 EUR. Now its 95 EUR, with "Shipping is
scheduled from March 26". This chart on Amazon (regarding Trezor) is also
telling [2]. I guess people wanna join the hype bandwagon. On the official
website the Trezor is 89 EUR "without VAT". Which is illegal to advertise in
NL unless you're specifically targeting businesses (who prefer to not have VAT
mentioned).

A disadvantage of the Ledger Nano S is that in order to use it, it requires
Chrome [3]. I'm not sure that's true for Trezor. It also has a Chrome
extension but iI seems it can function with just the "bridge" [4]

[1] [https://trezor.io](https://trezor.io)

[2] [https://www.amazon.com/Trezor-bitcoin-wallet-
Black/dp/B00R6M...](https://www.amazon.com/Trezor-bitcoin-wallet-
Black/dp/B00R6MKDDE)

[3]
[https://www.ledgerwallet.com/apps/manager](https://www.ledgerwallet.com/apps/manager)

[4] [https://wallet.trezor.io/#/](https://wallet.trezor.io/#/)

~~~
erentz
I was a bit put off by the Chrome Apps too, but it hasn't been a problem in my
actual use. Also they're writing non-Chrome apps now because of Google end of
life-ing Chrome Apps. I'd love to get a Trezor as well but they want me to pay
an extra 20 EUR to get one or wait until after February.

Also for the hardware hackers there is the Coldcard being developed by these
guys with a pre-order now: [http://blog.opendime.com/coldcard-
annoucement/](http://blog.opendime.com/coldcard-annoucement/)

------
ajaimk
Considering the reactionary nature of most casual traders, how much of this
dip is caused due to panic based on blogposts such as these? There is no
reliable source of truth here and just random blog posts which mostly read as
opinion pieces.

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douglashyde
Really unsure about bitfinex, I feel like it's got no real value, just
piggybacking of the tech of ether - its like creating value out of thin air,
something like these -
[https://www.starregister.org](https://www.starregister.org) (not real
obviously)

------
BadassFractal
What do people think of Binance? More likely to stand the test of time?

~~~
aviv
Once a huge exchanger like Bitfinex fails, there will be a run on exchangers.
Nowhere is safe. Never keep coins with an exchange, even if your uncle is the
CEO.

~~~
cperciva
Serious question (I wasn't paying attention at the time): What happened to
other exchanges after MtGox collapsed? Did they also see "bank runs"?

~~~
hisabness
Depends on your perspective. Prices dropped significantly because people
started to prefer dollars to some extent. Several of the large exchanges that
existed back then are still around, however, and others were acquired.
Examples of those still around: Coinbase, Bitstamp, Bitfinex, Kraken. Sure I'm
missing others.

I mention the above only to say it didn't feel like a true bank run to me at
the time. People were still able to get in and out, but prices were certainly
depressed. And several of the exchanges survived.

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roh26it
Which is a safe and friendly exchange according you people?

~~~
dom96
The only exchange I've been able to get verified on successfully (and I've
tried Coinbase, Gemini, Kraken, Bitstamp and probably others that I am
forgetting) was Luno[1].

While it was relatively easy to get verified on Luno, their "instant sale"
prices are quite high and I see no way to place bid/ask orders directly.

I'm also interested in other recommendations.

1 - [https://www.luno.com/invite/XHBQ6](https://www.luno.com/invite/XHBQ6)
(Note, there is an invite code in this URL, feel free to remove).

~~~
irond13
At the moment you can only trade (place bids/asks) on Luno with the following
currency pairs: BTC/IDR, BTC/MYR, BTC/NGN, BTC/ZAR (largest volume) and
ETH/BTC.

I think they started out as a South African only exchange a few years back.

------
naveen99
If bitfinex doesn't have dollars to give for usdt, all they have to do is give
an equivalent amount of bitcoin based on a bitcoin index like the one cme,
cboe, and bitmex use. I just wish binance, kraken, poloniex would support
bitusd also. Two of them support bitshares already, so atleast there is a path
to bitusd. unfortunately bitusd float is nowhere as big as usdt.

Edit: disclaimer: own some bitshares.

Edit2: would be interesting if bitmex converted or pegged some of their swap
products into decentralized currencies that you could trade on other
exchanges.

~~~
goldenkey
That is beyond silly. They used the fake tethers (USDT) to buy up bitcoins
increasing the price. And you think that it is okay for them to pay their
debts in the very currency they manipulated?

~~~
naveen99
Silly maybe, but its reality on bitmex.

[https://www.bitmex.com/app/perpetualContractsGuideExamples](https://www.bitmex.com/app/perpetualContractsGuideExamples)

~~~
goldenkey
Ah, the lovely world of yesteryear, reminiscent of 2008s synthetic
instruments. At least this time these people are actually greedy POS looking
for money in a zero sum game. With 2008 ordinary people got hurt badly for
just having 401ks. Here you simply have greed overpowering logic. Oh my.

~~~
naveen99
> greed overpowering logic

Isn't that the best kind of greed ? Greedy logical people make more money than
illogical non greedy people.

~~~
goldenkey
Greed is anticorrelated with logic as it is usually a vice that causes poor
decisions made by overweighing possible gains and minimizing possible losses.
It is a non rational mode of human weakness, and can even be correlated with
evil ie. Nestle and formula / water fiasco, Microchip companies hushing fab
workers with birth abnormalities/ health issues

~~~
naveen99
There are greedy algorithms in computing that make sense sometimes.

~~~
goldenkey
We are referring to monetary greed here. Depending on what the resource's
value is (cheap CPU cycles), yes, greed can make sense.

