๐จ๐จ๐จ BREAKING NEWS: Tether blows up ๐จ๐จ๐จ US govt. subpoenas Bitfinex
Breaking news! The Tether rumor/scandal seems to be blowing up! The US Commodity Futures Trading Commission sent a subpoena to Bitfinex and Tether and will be investigating the Tether situation. This is reported by Bloomberg. Crypto prices, in particular Bitcoin, are taking a bad hit as the Tether FUD takes hold.
6 DEC
Although this news is hot off the press, the subpoenas were actually sent on December 6th. The Bloomberg article doesn't list where this news came from and why it took so long to actually be news. Bitfinex offers little in the form of an explanation to this:โWe routinely receive legal process from law enforcement agents and regulators conducting investigations,โ Bitfinex and Tether said Tuesday in an emailed statement. โIt is our policy not to comment on any such requests.โ
POTENTIAL DISASTER
The subpoena obviously has to do with the rumors going around that Tether/Bitfinex does not actually have the capital to back up the billions of dollars worth of USDT that have hit the market in the last year. Since USDT is practically the default currency on many exchanges and many people rely on it for trading, it would have a terrible effect if it turned out that these dollar-backed coins are not in fact backed by dollars.People have speculated that as much as 80% of the Bitcoin price could be built up due to non-backed Tether purchases, which could potentially have a devastating effect as it would mean as much as 80% of the Bitcoin price could be over-inflated. Furthermore, should Tether (or trust therein) disappear it would have a significant impact on the amount of liquidity in the cryptocurrency markets, as there are only a few true fiat gateways in the world. Most exchanges use Tether, and this could mean that a large portion of cryptocurrency trading could simply disappear overnight.
Smart investors have been warning about Tether for months now and will likely not have touched it. I myself have stayed far away from Tether as well, it's part of the reason why I trade only in BTC or ETH. But if Tether goes down, it is likely to drag a lot of the entire market down with it - there is no good place to hide except in true fiat.
MAYBE THEY HAVE IT
The question is, of course: Do they have the money??If Bitfinex/Tether actually have all those billion dollars with which they are supposedly backing USDT then this could all end well after all. But there's no guarantee that they do. Of course they themselves claim that their finances are in order, but Friedman LLP who has done a 'sort of' private audit and claimed last year that Bitfinex's finances were in order, is now no longer working with Bitfinex and has in fact distances themselves from them.
This does not bode well. Could this finally be the black swan event people have been talking about?
It's going to be an uncertain time until Bitfinex/Tether finally shed light on the situation in front of a US court. Bitcoin is already dipping below $10K, and it's likely to go down further from the looks of it (in my humble opinion).
Tetherpocalypse now? :(
>> Read the article on Bloomberg here! <<
If Friedman decided to bail on the audit, you can bet your nutsack there is something fishy going on. I'm starting to think that the major Bitfinex hack never happened, and that the whole Tether fiasco is an elaborate money laundering scheme by insiders to clean the "hacked" money.
The Friedman situation worries me too. It's like they felt something fishy was going on and didn't want anything to do with it :S
Or they got wind of the subpoena we're just today finding out about, and they just decided the risk to their reputation is just too great to keep going with the audit.
What will this mean in terms of bitfinex? If tether will go down.. and I have some crypto at bitfinex I will lose it all?!
Also Iโm starting to think it will be best if they do turn out to be a scam and we will have hard times but it list after that there will be no huge scams anymore and the crypto world will have the opportunity to get the trust and security we need. If that makes any sense at all....
There is no need for panic over this, the subpoena was issued all the way back in december and is likely routine. Not saying i think Tetherโs operation is entirely legitimate, but i donโt think this will effect it in the end.
There was an article that they have money.
I hope this is correct!!
Btw, here is the video that explains that it is an old news
https://steemit.com/cryptocurrency/@foodnature/tether-fud-explained-in-2min
Hope is all we have. ๐
Phew, that is good info.
I hope the above information is correct! If they have $3b things should be okay
So, just a blip?
Yes, that's true but the news that it happened is new. The market is definitely reacting to it IMO and it's going to be an uncertain time until the actual courtdate (which is unknown to me still).
In the long run we will be fine.. it won't kill crypto, but it could still be a big dip
Btc pricedrop in 3.......2........1........
Price drop was pretty much instant! Let's hope it doesn't drop further...
Everything dropped
This is an extremely interesting thing to follow. On the event I attended today Tether was also discussed...and not in a positive way.
We'll find out how expensive this cleanup is for the market, if they actually turn out to have 0 USD (or at least not equal to the amount of Tethers).
Up above somebody posted a report which says Tether has about $3 billion, so we may still be safe.
But.. it's all uncertain now. Glad I don't hold USDT!
Depending on the next months events following this, this could cause a bear market for quite awhile.
I agree it could be bad!
I wonder how many companies and investors are holding their good news while waiting for a last drop in the market, I would use that the higher the decline the greater the mooning! lol
and this type of news fits them like a glove, so there is no harm that does not come well.
Oh yes, long term this shouldn't hurt crypto. Only the short term. For some it may be good news so we can buy more, for the long term.
Personally.. beforel ast year I suffered a 3 year long bear market and I am not looking forward to a second term!
Wow. crazy day in crypto. The markets were hit pretty hard today probably because of this news. People have been talking about issues with tether for some time now and i guess some of them are coming to fruition. i haven't really been following all that because i don't use tether. But its good to know this sort of information nonetheless. I'm sure it will blow over eventually. Probably just another - good time to buy more of your favorite token. That's how I see it at least.
Yup.. I'm hodling on and waiting this out. I'm not in USDT so long term I should still be fine. Who knows, if we drop far enough I may buy more..
This comes as no surprise to me. I never even thought of going into Tether. If things sound to good to be true.... I canยดt believe, this "80% of BTC is funded by Tether" though. If people now start to distrust Tether, they would go into other cryptocurrencies to get rid of it, right? Thatยดs not what we are seeing...
I don't know.. 80% seems a lot but some calculations show that only a couple billion USD total went into crypto to get it to the market cap it is at now.
Other crypto's don't offer much refuge.. People are used with crypto's being tied to Bitcoin, so when Bitcoin drops people pull out all their crypto at the same time causing a domino effect. There's only a handful coins that are less affected by bitcoin dips and even they are only 'less' affected.. still affected
Well, I was just discussing on another thread the option of bitUSD, but with these low volumes and real trades only happening every 10 minutes or so on the bitShares DEX, itยดs no real option for fast decisions :(
I don't see it that way! If tether can't be converted to USD. People will convert it to crypto right? Where else will they go in exchanges that only support usdt. It goes to crypto if people can't do anything else with it. I think crypto will actually benefit. If bitttrex announces tomorrow we can't use tether anymore. It will get dumped to crypto. Now U.S really can't do much other than block U.S exchanges from using usdt.
Actually, you may be right. If people can't 'flee' crypto into Tether, and there are only a limited amount of fiat gateways there may be a situation where people can't get their money out and it will stay in crypto!