Bitcoin Drops 7 Percent On Allegations of $850 Million Fraud By Bitfinex By New York Attorney General (theregister.co.uk) 63
An anonymous reader quotes a report from The Register: The price of Bitcoin has dropped seven per cent after New York's Attorney General accused leading exchange Bitfinex of trying to hide $850 million in missing funds. The accusation came in a legal filing [PDF] on Thursday that claims Bitfinex raided the reserves of Tether -- a digital currency that is kept at parity with the U.S. dollar in order to allow traders to switch easily between real and virtual currencies -- in order to make up the massive shortfall. Both Tether and Bitfinex are headquartered in the tax haven of the British Virgin Islands and, according to the NY Attorney General, are owned and run by the same group of executives and staff.
Tether is a so-called "stablecoin" and the company claims that every Tether virtual coin is backed by a dollar held in reserves, the idea being that people can be assured of its stability. But last month, on March 4, the NY Attorney General notes that Tether changed that assurance to note that "every Tether is always 100 per cent backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties." [...] As part of that investigation, the OAG uncovered documents that purportedly show that in mid-2018 Bitfinex didn't have sufficient real-world currency deposits to meet customer demand.
Tether is a so-called "stablecoin" and the company claims that every Tether virtual coin is backed by a dollar held in reserves, the idea being that people can be assured of its stability. But last month, on March 4, the NY Attorney General notes that Tether changed that assurance to note that "every Tether is always 100 per cent backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties." [...] As part of that investigation, the OAG uncovered documents that purportedly show that in mid-2018 Bitfinex didn't have sufficient real-world currency deposits to meet customer demand.
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unlikely, the architecture is too bottlenecked. that failure of liquidity is one of a few reasons bitcoin isn't money.
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"When the processing power needed to run transactions increases over time"
It doesn't, false premise.
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it does since the transaction rate has increased and the algorithm doesn't scale. hence days delays at times to clear a transaction.
reality trumps whatever hypothesis you are imagining, bitcoin doesn't scale
Wait a second, something seems wrong..... (Score:1)
Someone actually believed that Tether was anything other than bullshit?
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You can easily make money by just parking dollar reserves for a dollar tied coin in short term US bonds and money market funds. Just as Bitfinex can easily make money on the margins of trading. There is no reason for these companies to speculate on crypto coins with their customers money, they already make money hand over fist.
The reason to distrust Tether is not on principle, the reason to distrust it is because security at crypto exchanges is a joke. If they lost 850 Million dollar it's almost certainly f
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In principal, tether's value is pegged to the dollar. Except the dollar is regulated and protected against fraud. Tether is not.
There's every reason to distrust Tether on principle.
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The dollar and FDIC are protected by a state with a printing press and an army. That's obviously better protection than mere regulation.
But fraud is still a crime, so equally obviously regulations apply to Tether. It just takes a while for the long arm of the law to catch up to fraud.
I think Bitfinex has had massive losses from a hack, then they wrote a worthless non marked to market loan from Tether to Bitfinex to cover it up and changed the terms of service for Tether to try to cover their asses. Which wi
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A lot of cryptocurrency exchanges have claimed to be "hacked", when what was really going on was an exit scam, mismanagement, or spending the customer's money to live the good life.
In before (Score:1)
Hur dur tulip comments. I made a nice profit on Binance coin.
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Social security is pay as you go with the trust fund serving as a small buffer.
The trust fund is meant to cover short/medium term funding gaps, because making changes to social security tax/checks are extremely politically painful ... so it can take a decade or more to make adjustments where they need to be made.
There's a word for that (Score:3)
> Social security is pay as you go
Yes and no. By law, your social security contributions must be invested, so the money you put is available to pay you back when you retire. In fact, it's "invested" in an IOU - spent.
There is a word for when you tell people that you are investing their money, but you're actually using incoming "investment" to pay out the pay out to the people who invested earlier. Are you by chance familiar with the word?
> with the trust fund serving as a small buffer
Three trillion do
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They in fact WERE calculated 25 years ago (Score:2)
The baby boomer problem WAS in fact calculated 25 years ago. It was a major political issue during the Reagan years. 25 years ago, we knew how many 30-year-olds we'd have, because we knew how many five-year-olds we had. Again, people have an odd tendency to get a year older every year.
During the Reagan years there was enough political will to make changes sufficient to halfway fix the problem, and we knew at the time it was a half-measure, sufficient to kick the can just a little further down the road. S
Aaaaaand it's gone! (Score:2)
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BTC moves 10% at a time for no apparent reason all the time. This headline is just co-incidence.
More to this (Score:2)
https://cointelegraph.com/news/unconfirmed-polish-prosecutors-seize-400-mln-amid-allegations-bitfinex-is-implicated-in-fraud
Basically Crypto Capital, the "bank" behind several exchanges, went insolvent because of government seizures over alleged cartel connections. One of the largest problems with crypto right now is finding banks to deal with it. This is slowly going away though as more and more companies enter or startup their own banks to fill the need. One theory is Crypto Capital runs Bitfinex/Tether.
They weren't satisified just creating fake money (Score:2)
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Tether is the principal soap used for wash trades with Bitcoin and all the other shitcoins.
They're all going down together.
Which is why they haven't fallen just yet. The money is being skated back and forth from exchange to exchange and token to token. If this market were regulated and audited, it would have crashed a long time ago.
Tulips... (Score:2)
...get yer TULIPS....
Fractional Reserve Banking (Score:2)
How is this different from brick and mortar banks?
https://en.wikipedia.org/wiki/... [wikipedia.org]
All you Bitcoin suckers... (Score:2)
What's seven per cent of... (Score:2)
Nothing?
Nothin' from nothin' leave nothin'. You gotta have somethin' if you wanna be with me.
But it's up like 20% over the last few months... (Score:2)
Only the small drops seem to ever get reported.
The fact that it's been going up like crazy for the last couple of months, goes unannounced. But, a frankly small drop, that is recovering quickly, gets reported like it's the end of the world.
So much bias against Bitcoin.
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This website is for older techies, who have aged to the "get off my lawn" point. All new technology or changes in their environment are taken with scorn, and they love to naysay and schadenfreude when they can.
20 years after the internet existed, and still hadnt changed the world yet, early adopter clifford stoll lashed out https://thenextweb.com/shareab... [thenextweb.com]
Bitcoin is here to stay, and its going to change their world whether they like it or not.
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That's totally unfair to Slasdot I think.
Public and media perception is just very anti-bitcoin.
I'd say that the perception is mainly fueled by big players who have a lot to lose, like banks, companies, stock markets and brokers, etc. The thing is, people tend to listen to those people even when they are wrong.
Yet still the fanbois ... (Score:2)
The fanbois here are still scraping the barrel for lame excuses to defend it in vain hope they can squeeze a few more bucks out of the gullible.
please fix the grammar, thanks. (Score:1)