Bitfinex Under Investigation For Pulling Off the Same Scam That Most/All Mainstream Banks Pull Off Every Day?
On December 6th 2017 Subpoenas were issued by the U.S. Commodity Futures Trading Commission to the crypto exchange 'bitfinex' to investigate whether they actually have a US Dollar equivalent available to cover the amount of their US Dollar pseudo-crypto token 'tether'.
Even though this news is weeks old, I only just learned about it and quickly moved my tokens from Bitfinex elsewhere. I like Bitfinex's method of 'Trailing Stop' trading which helps you protect yourself against big losses by auto-selling if your tokens drop by an amount you specify. Other than that though I don't have any particular desire/need to use Bitfinex as compared to other sites beyond that they provide USD Tether as a way to store your funds there.
You can get regular updates on this topic from this very active twitter account: https://twitter.com/Bitfinexed
USD Tether
Having something like Tether on an exchange is useful in that there are often times when almost every crypto token goes down in value and it makes sense in those periods to temporarily convert your coins into Tether to avoid the price drop.
The flipside to this is that claiming to hold USD means you actually have to have the USD equivalent available somewhere, whether in a bank account or in a physical location. The data from Bitfinex has had many claiming that Bitfinex has simply created over $1B worth of Tether without actually having that amount of USD available and hence the US government is investigating.
Given that the Tether terms document states the following, there is clearly some grounds for both confusion and concern:
“PURCHASE AND REDEMPTION OF TETHERS: The Site is an environment for the purchase and redemption of Tethers. Once you have Tethers, you can trade them, keep them, or use them to pay persons that will accept your Tethers. However, Tethers are not money and are not monetary instruments. They are also not stored value or currency.
There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers.”
Traditional Banks Do the Same Every Day?
Those who have seen the many documentaries about money creation which show how banks typically just make money out of thin air LEGALLY may find the situation here to be much the same as occurs daily offline. It is somewhat ironic that the investigators choose to target online exchanges while ignoring/ denying that the federal reserve is basically doing the same thing as part of it's business model - but maybe ironic isn't the right word since technically it is simply more evidence of a giant, institutionalised crime gang dressed up in sharp suits and claiming 'authority'.
For more on this you can check out this documentary and many others:
The point here is that a 'run on the bank' can be created if everyone decides to withdraw their money together, since the bank actually doesn't have enough to cover that kind of payout - in effect, the banks extend themselves credit at the expense of their customers, while the customers are tricked into thinking it's the other way around!
I'll stop here as I can go on about this for days - hehe.. But suffice it to say that I recommend using a different exchange to Bitfinex for now!
Wishing you well,
Ura Soul
View My Witness Application Here
The whole crypto-regulation-FUD-craziness right now is almost definitely something whipped up by bankers because they don't like the idea of crypto ousting them from their position of being able to do what they want, when they want, to whatever end, while getting paid $$$$$$$ for it. For them crypto spells the end of traditional abuse of power.
Don't worry, Binance have stop-limit option too + low fees. Bittrex is way too expensive and sometimes your deposited money is nowhere. And you have to wait till it miraculously appears after days/weeks. So I wouldn't recommend it.
The whole Tether/Bitfinex thing is shady for sure but it's quite annoying how the media presents the story. Leaving out exact dates and casually adding it after other newspapers copy-pasted it and people are freaked out. For sure they would like to cause a bigger panic here.
Oh, I meant 'Trailing Stop', not 'Stop Limit' (I corrected the post).. It's a form I haven't seen on any other sites yet.
Ha! That's a good point about banks doing the same exact thing. But just because they do it doesn't mean Crypto should do it.
For sure, in a world based on integrity no-one would do do it!
If a loophole exists, someone, somewhere will make profit from that loophole.
am hoping and praying that bitfinex does not turn out to be another bitconnect debacle , this will hurt the coin market
It would serve us all to pay more attention to the way the mainstream banks operate, since they basically do the same thing and yet I have never seen this seriously addressed in a major way.
That is true but let's not have that in crypto @ura-soul
The irony eh!?
One law for the banks and one for every one else.
Sighs
Exactly what I was looking for!
Upvoted, resteemed and following!
Fully agreed, as long as the FED monopoly since 1913 is left out of the debate, any criticizing bitfinex and tether is hot air.
Which is where I largely see the problem - here we are in Crypto world with so many people on their toes... but these basic facts that trump every detail-debate by far are either completely neglected or simply undiscovered.
I have no evidence yet, but I don't believe the FED and tether are entirely different projects. Their handwriting is too similar, and I would not put it beyond those people to establish a "hip" crypto version of the same slavery shackles that have existed for more than a century with most people not having noticed at all.
The whole debate is essentially redundant, because most of the dollars have no backing anyway. Only pseudo legitimacy through the corp. known as the US and all their media bamboozlement influence.
Hmm...good heads up. Fortunately, I have all my stuff in bittrex and binance. For now, they are ok.
Would it not makes sense to allow and facilitate existing users to delegate a portion of their steem power to make good for pending users?