USDT analysis

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Praetorian

Mentor Group Light (Private use!)
Red flags to consider regarding Tether and Bitfinex's history:

1.
They fired their auditor after promising to provide a full on audit, after they realized that their books were a mess.

2. DOJ documents show chats between Bitfinex staff literally admitting they have to print 800 million USDT to prevent the exchange and Tether itself from collapsing.

3. They struggle to keep bank accounts open for both Tether and Bitfinex, HSBC kicked them out, UBS too, Wells Fargo as well. This got so bad at some point they had to resort to using an unlicensed bank in the Bahamas to prevent liquidity problems. They resorted to opening shell companies with fake business plans in order to access bank accounts, often lying to the banks about their business activities. They even asked their customers making cash withdrawals to not communicate to their bank about the company being a crypto exchange by fear of having their accounts closed. Anyone who operates a business this way is a fraudster. This was exposed a few years back but no one bothered to care, most crypto actors shrugged it off fearing that throwing oil at the fire would only contribute to killing the market faster.

4. The ownership of those companies is very obscure and the people you see in public are mostly pawns and employees. To this day the company has so many entities across the globe that identifying a UBO is still a challenge even for the regulators.

5. They used the same shady panamanian payment processor several crypto scams used in the past, from QuadrigaCX (Owned "died" in india 2 weeks after writing his will and 265m CAD vanished before the market went parabolic) to several european based crypto ventures that went bust.

6. The only bank that "attested" reserves for Tether was Noble Bank in Puerto Rico, CEO had a history of forgery and cooking books and the bank went under so without a real audit this claim is dubious at best.

7. They represent such a systemic risk that even Binance CEO CZ had to intervene in 2018 to reassure people and delay the runs we see today on exchanges. He claimed he met with in the background with Tether and verified himself that USDT was fully backed although he never provided proof. He was seeking to control the backlash more than showing the truth because most chinese exchanges run exclusively on Tether, without it they're insolvent. This is why CZ spent the next 4 years heavily investing in his BNB ecosystem (Even breaking several laws in the process to make it a success), to provide a counter balance to the exchange's dependency on Tether.
 

beachftss

New member
Someone understands. People think that at this point Tether needs to be involved in shady business to stay afloat when in fact they are more profitable that many of the exchanges in the top 10.
This argument was used for FTX as well. We don't know what happens behind the scenes (hacks, embezzlement, gambling with user funds).
 

JackAlabama

Entrepreneur
This argument was used for FTX as well. We don't know what happens behind the scenes (hacks, embezzlement, gambling with user funds).
But for FTX it made 0 sense as they were newbies in the crowded exchange space (est in 2019). Also sbf background story did not seem plausible, but that is a side note.
There were so many exchanges around working well for years.
Binance, Kraken, Coinbase, Bitfinex, Bistamp, Bitpanda (which is quite bad tho, but nevertheless).

Same can be said for circle usdc. They are new and need to catch up and close the big gap to the first mover. It seems quite risky.

All companies where you are not day to day sitting in them are blackboxes and no proof whatsoever is good, neither audit nor prospectus nor xyz.
Only reliable metrics are passing of market tests under duress and adversity. But at the end of the day one deals with black boxes and should act accordingly (e.g. bankroll management).
 

OffshoreMonero

Silver Member
This got so bad at some point they had to resort to using an unlicensed bank in the Bahamas to prevent liquidity problems.

That was Deltec, correct?

They resorted to opening shell companies with fake business plans in order to access bank accounts, often lying to the banks about their business activities.

Mt. Gox was caught doing that too, I believe.

They even asked their customers making cash withdrawals to not communicate to their bank about the company being a crypto exchange by fear of having their accounts closed. Anyone who operates a business this way is a fraudster.

I'm not making excuses for this shady behaviour, but a lot of banks are hostile to crypto, and most banks back in the day didn't want to assume any risk.

I remember back in the late 90s/early 00s if you said you "ran an e-commerce site" to any bank they wouldn't open an account. They saw the entire internet as too risky. haha

5. They used the same shady panamanian payment processor several crypto scams used in the past

(STEAL YOUR) CRYPTO CAPITAL CORP

6. The only bank that "attested" reserves for Tether was Noble Bank in Puerto Rico, CEO had a history of forgery and cooking books and the bank went under so without a real audit this claim is dubious at best.

Omg.. I didn't know that part. Unreal.

7. They represent such a systemic risk that even Binance CEO CZ had to intervene in 2018 to reassure people and delay the runs we see today on exchanges. He claimed he met with in the background with Tether and verified himself that USDT was fully backed although he never provided proof.

Typical CZ. Your funds are SAFU!

We are still waiting for Monero proof of reserves. We know they've been selling fake paper for years. Probably slowly stealing from customers and hiding their loot in Monero.

When that thing is about to collapse he will resign and pull a "it was working fine when I left guys" move like the CFO from Enron did.
 

JackAlabama

Entrepreneur
That was Deltec, correct?



Mt. Gox was caught doing that too, I believe.



I'm not making excuses for this shady behaviour, but a lot of banks are hostile to crypto, and most banks back in the day didn't want to assume any risk.

I remember back in the late 90s/early 00s if you said you "ran an e-commerce site" to any bank they wouldn't open an account. They saw the entire internet as too risky. haha



(STEAL YOUR) CRYPTO CAPITAL CORP



Omg.. I didn't know that part. Unreal.



Typical CZ. Your funds are SAFU!

We are still waiting for Monero proof of reserves. We know they've been selling fake paper for years. Probably slowly stealing from customers and hiding their loot in Monero.

When that thing is about to collapse he will resign and pull a "it was working fine when I left guys" move like the CFO from Enron did.
How can you audit the supply in Monero?
 

OffshoreMonero

Silver Member

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
Guess this is the point for all stable coins. I mean if you can make 4% risk free in one year. That also means that you could make something like nearly 10 % just in two years.
So it is a gold mine, if you have at least let's say 90% of the capital you could survive. Maybe get a loan. I mean at 4% interest rate you are getting 20% of the 65 billions just in 5 years. That is a solid cashflow - if you can execute. The interesting part would be how much reserve they will have next year. So it should be much more than the token dollar value.

This is completely wrong...lol.

If you make for example 4% yield on a bond but lose 20% of the capital value of the bond due to Fed hikes you have a net lose of 16%. on your holding :rolleyes:. You have not factored in devaluation of the treasuries since Fed hikes. See my previous example.

This all matters because if you want to claim a 1:1 peg then you cannot allow devaluation on your balance sheet. See my previous posts...lol.
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
It seems clear to me that some people who invested in USDT have no idea what they invested in or how a basic portfolio of none cash assets works.

I genuinely think there are people who think you can put $60bn into a portfolio of bonds, gold, T bills etc and the value of that portfolio and its underlying assets does not move from $60bn...lol :confused:. They think the price of gold, bonds and T-Bills stays static :rolleyes:.

P.S Lets hope the markets move in favour of Tethers portfolio and they can pick right time to do an audit ;).
 

JohnnyDoe

Schrödinger's guy
Mentor Group Gold
It seems clear to me that some people who invested in USDT have no idea what they invested in or how a basic portfolio of none cash assets works.
you don’t “invest” in USDT, unless you are buying it for EUR, as an equivalent to a fiat EUR/USD speculation. USDT is just a tool, the crypto equivalent of worthless fiat USD, which is to avoid like any other fiat currency.
 

Martin Everson

Offshore Retiree
Staff member
Mentor Group Gold
Elite Member
I rest my case ;).
 

Praetorian

Mentor Group Light (Private use!)
The supply is 100% auditable, and there have been independent 3rd party audits. The link below explains it more.

/XMR/ Monero General Info-Dump


Ok.. well does anyone know the name of the unlicensed bank that Praetorian was referring to?
It was another entity called Deltec, they were flagged for masquerading as another licensed entity with the same name but accepted any and all deposits for a time. It was basically an attempt at Euro Pacific Bank 2.0 but in the Bahamas.

Tether tried to pull a quick one here to make people think they were using a legit bank lol.

I recall people uncovered the two entities and that they didn't operate accounts at the legit one for long. I could be wrong on that one though as its been a while i didn't catch up on that mess lmao
 
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