Tether/Stablecoins are the hot air inside the Bitcoin bubble...their regulation will burst it

[tecate]

Tether/USDT is two or three guys with a laptop in the Virgin Islands 'printing/minting' Tether coins digitally and releasing them into the crytpo closed loop universe......feeding liquidity and manufactured digital dollars as they please with bizarre conflicted relationships with various exchanges & cypto brokers where they've admitted to providing loans to these same affliates using customer deposits in the past. Lets be real here....these are all the same people.....in the real world they would be deemed related parties..tether/bitfinex/binance/bithumb

The 'three guys with a laptop' is the narrative you want to believe. However, it is wayward vs. the reality. Stablecoins generally have added 2x the entire market cap of Paypal over the past 6 months. As it stands today, Tether has a market cap of $63 billion dollars. Regardless of whats going on at Tether, they couldn't possibly lack the required human capital to run it.

As regards your other claim i.e. Tether prints as it pleases - here's Lyn's tweet:

https://twitter.com/x/status/1426287505792507911

In the absence of actual evidence, claims made should not be passed off as fact. I'm quite happy for anyone to suggest that there could be shenanigans going on at Tether. Passing unsubstantiated claims off as fact isn't in any way helpful.

 

[letitroll]

@tecate lets look at facts:

Tether claims it has $63 BILLION dollars of equity......for reference AIB & BOI have combined 24bn euro's of shareholder equity....so Tether is 2.2x the size of Ireland's largest two banks.

Tether claims $63bn of 'assets'.....broken down by their own addmision into cash/commercial paper/bonds/loans......the size/scope of the operation would have literally 1,000's of counter-parties to this paper....defaults/recoveries would be common across such a vast asset book requiring daily management across many departments - risk, recovery etc.

Whats supporting $63bn in assets?

https://www.linkedin.com/company/tether/people/

https://www.linkedin.com/company/tether/people/
Tether.to has 21 employees listed on Linkedin - most are kind of associate hogs claiming to be advisors to Tether while they 17 other roles listed running at the same time etc. I didnt make up the number 3. I can only find three employees who's full time non concurrent role is working for Tether.....lets say 50% of tether employees dont have a linkedin account (very unlikely given Tether would skew younger).....lets 2x 3 employees....we get to 6 employees

6 Employees running a $63bn what is in essense a credit fund just given their own disclosed asset mix

Ok doesnt sound good but might be legit........so who's looking out for the $63bn of assets that have been given to these folks to look after......who's the dark knight checking and re-checking accounts, making sure the money is there.

These guys - Moore Cayman - are their accountants & auditors - https://www.linkedin.com/company/moorecayman/

FOUR employee global organization nobody has ever heard off in the Cayman Islands, auditing a SIX person organization that is holding customer assets totalling $63bn across a portfolio of cash/bonds/commerical paper/loans.

Even Bernie Madoff kept a team of 30 people around & managed to get E&Y to sign off on things.....and he only 'managed' ~$4bn

 

[tecate]

@tecate lets look at facts:

Tether claims it has $63 BILLION dollars of equity......for reference AIB & BOI have combined 24bn euro's of shareholder equity....so Tether is 2.2x the size of Ireland's largest two banks.

Tether claims $63bn of 'assets'.....broken down by their own addmision into cash/commercial paper/bonds/loans......the size/scope of the operation would have literally 1,000's of counter-parties to this paper....defaults/recoveries would be common across such a vast asset book requiring daily management across many departments - risk, recovery etc.

Whats supporting $63bn in assets?

Tether.to has 21 employees listed on Linkedin - most are kind of associate hogs claiming to be advisors to Tether while they 17 other roles listed running at the same time etc. I didnt make up the number 3. I can only find three employees who's full time non concurrent role is working for Tether.....lets say 50% of tether employees dont have a linkedin account (very unlikely given Tether would skew younger).....lets 2x 3 employees....we get to 6 employees

6 Employees running a $63bn what is in essense a credit fund just given their own disclosed asset mix

You've claimed 'facts' again. Pulling up a LinkedIn profile is not 'facts'! You're making assumptions - and again, you're painting the worst of narratives with your '3 guys and a laptop'! How do you know that the company don't have a no LinkedIn profiles policy as part of OpSec? There's absolutely nothing definitive in pulling up a LinkedIn profile.

Secondly, the whole point of blockchain is removal of intermediaries. With that, crypto companies don't tend to have a need to employ anywhere near as many people as TradFi entities. Third, you made a comparison with AIB & BOI - in line with the previous point, the needs here are entirely different and so any such comparison is wayward. In any event, how do you know what their requirement is in terms of staffing to run this type of business?

Lastly - and most importantly, are you seriously telling me that as a company it's going out of it's way to save a few salaries whilst running a $60 billion dollar company? Are you claiming that they're self sabotaging themselves and not providing themselves with the day to day resources to run the company? It would make no sense for them to do that.
Tether may very well have been started by three guys and a laptop - I could well believe that. Brian Armstrong started Coinbase with $100k - it has a market cap of $68 billion today. However, its highly unlikely that the resources of Tethers current incarnation (with a market cap of $63 billion) is limited to '3 guys and a laptop'.

Ok doesnt sound good but might be legit..

Hang on - you were pulled up on the 'facts' claim and then came back with another 'facts' claim which it seems is underpinned with a 'doesn't sound good'. In other words, you don't have firm evidence. You could express concern re. stuff that leads to a 'doesn't sound good' conclusion and suggest that more scrutiny/regulation is required. That's reasonable. What's not reasonable is jumping straight to baseless conclusions without evidence - which is what Tether Truthers have been (and are) doing. What doesn't in any way help their credibility is the fact that these people started out from the viewpoint that they hated everything to do with decentralised crypto/blockchain.

@tecate lets look at facts:
FOUR employee global organization nobody has ever heard off in the Cayman Islands, auditing a SIX person organization that is holding customer assets totalling $63bn across a portfolio of cash/bonds/commerical paper/loans.

Anyone credible in the crypto space is looking for more transparency where Tether is concerned. At the end of the day, entities that are centralised - be they exchanges or stablecoin issuers - should be regulated on that basis. I've long since said that I don't trust any centralised entity - but equally, there's all sorts of shenanigans at play in the regulatory and political sphere relative to crypto.
Lack of a full audit will continue to leave everyone second guessing. However, that's what it is - second guessing. There is no confirmation from either side. So someone can quite rightly express concern but declaring Tether to be issuing USDT without backing as part of a strategy to drive up the crypto market is not fact as it stands today.
In the meantime, I refer you back to Lyn Alden's tweet via my last post. If you claim that USDT is being magic'ed up to drive the bitcoin price, can you explain why issuance of USDT has been flat over recent months whilst the bitcoin price has moved from $29k to $47k?

Other than that, you claimed that if USDT falls apart, then bitcoin is done for. That in no way is my thesis. Whilst we don't have the evidence, I'm open to the possibility of Tether running a sham of an operation. Even if that's our final destination, bitcoin will survive and continue to progress.

 

[Duke of Marmalade]

@tecate lets look at facts:

Tether claims it has $63 BILLION dollars of equity......for reference AIB & BOI have combined 24bn euro's of shareholder equity....so Tether is 2.2x the size of Ireland's largest two banks.

Tether claims $63bn of 'assets'.....broken down by their own addmision into cash/commercial paper/bonds/loans......the size/scope of the operation would have literally 1,000's of counter-parties to this paper....defaults/recoveries would be common across such a vast asset book requiring daily management across many departments - risk, recovery etc.

Whats supporting $63bn in assets?

https://www.linkedin.com/company/tether/people/
View attachment 5759
https://www.linkedin.com/company/tether/people/
Tether.to has 21 employees listed on Linkedin - most are kind of associate hogs claiming to be advisors to Tether while they 17 other roles listed running at the same time etc. I didnt make up the number 3. I can only find three employees who's full time non concurrent role is working for Tether.....lets say 50% of tether employees dont have a linkedin account (very unlikely given Tether would skew younger).....lets 2x 3 employees....we get to 6 employees

6 Employees running a $63bn what is in essense a credit fund just given their own disclosed asset mix

Ok doesnt sound good but might be legit........so who's looking out for the $63bn of assets that have been given to these folks to look after......who's the dark knight checking and re-checking accounts, making sure the money is there.

These guys - Moore Cayman - are their accountants & auditors - https://www.linkedin.com/company/moorecayman/

View attachment 5760

FOUR employee global organization nobody has ever heard off in the Cayman Islands, auditing a SIX person organization that is holding customer assets totalling $63bn across a portfolio of cash/bonds/commerical paper/loans.

Even Bernie Madoff kept a team of 30 people around & managed to get E&Y to sign off on things.....and he only 'managed' ~$4bn

I checked AIB it has 9,421 employees on LinkedIn!!
This Tether thing stinks to high heaven. But why is it surviving? I note @tecate is preparing his escape route for if and when Tether does implode.
Maybe he is right, bitcoin can survive that, I am gobsmacked at its resilience so far.

 

[ArthurMcB]

You've claimed 'facts' again. Pulling up a LinkedIn profile is not 'facts'! You're making assumptions - and again, you're painting the worst of narratives with your '3 guys and a laptop'! How do you know that the company don't have a no LinkedIn profiles policy as part of OpSec? There's absolutely nothing definitive in pulling up a LinkedIn profile.

I think what letitroll has done here is reasonable and shows that Tether probably has few employees unless someone can reasonably demonstrate otherwise.

 

[tecate]

I checked AIB it has 9,421 employees on LinkedIn!!

I can't say that I'm familiar with the intricacies of the stablecoin business but I highly doubt making a comparison with the staffing of a retail bank is in any way helpful. Tell me Duke, what is the correct staffing level for the issuer of a stablecoin? Follow up question: You have a $63 billion dollar business and decide to penny pinch a few million on salaries such that the business can't be run effectively on a day to day basis? Is that what we're really talking about here?

I note @tecate is preparing his escape route for if and when Tether does implode.

Yeah, an incredibly crafty move on my part given that I was the first in these parts to express concern about tether back in January 2018. Anyone credible in the crypto space wants more transparency where Tether is concerned. That's transparency - NOT people that so very badly want crypto to fail making claims that they cannot back up.

 

[WolfeTone]

I think what letitroll has done here is reasonable and shows that Tether probably has few employees unless someone can reasonably demonstrate otherwise.

True. And according to this site it has 19 employees across 3 locations.

https://craft.co/tether-holdings (Tether employees)

What is not reasonable, imo, is this persistent inference that bitcoin price is dependent or pumped by the issuance of Tether. There is little, or no, real substance to this. It is speculation that has persisted for so long now that if there were any real substance to it, it would be widely exposed by now and not limited to FUD threads on sites like AAM.

That is just my observation, I don't think it's unreasonable.

 

[Duke of Marmalade]

Follow up question: You have a $63 billion dollar business and decide to penny pinch a few million on salaries such that the business can't be run effectively on a day to day basis?

Indeed that is the question. Is it a $63bn business with a LinkedIn presence 1 in 2,000 of AIB or is it Fred in the Shed having a good laugh, and cleaning up on the bitcoin manipulation.
Anticipating your riposte, I admit that I do not know. But the huge anomalies that @letitroll has highlighted and your own call for greater transparency not to mention the wise words of Prof Roubini means I won't be keeping my dollars (if I had any) in Tether.

 

[tecate]

Indeed that is the question. Is it a $63bn business with a LinkedIn presence 1 in 2,000 of AIB or is it Fred in the Shed having a good laugh, and cleaning up on the bitcoin manipulation.

Tether could be cooking the books but no-where have I seen the suggestion that they can't/won't staff their operation to facilitate day to day activity. Many startups do originate with 'Fred in the Shed' - but they hardly have to make do with too few people - having built a business with a market cap of $63 billion.

But the huge anomalies that @letitroll has highlighted and your own call for greater transparency not to mention the wise words of Prof Roubini means I won't be keeping my dollars (if I had any) in Tether.

My own view is that the potential is always there - as they're a centralised entity. The problem with the nutty professor is that he wants so badly for crypto to fail so he will latch on to anything. Because he has quadrupled down - having originally declared bitcoin dead back when it was $13/bitcoin, there's no way out for him now. If bitcoin continues on its path, then the reputational damage for him is far greater than fax machine guy's internet screw up. His is not a pragmatic view - if it was, then he'd simply be calling for appropriate regulation. He (and the rest of the merry band of Tether Truthers) aren't doing that - they're throwing fuel on the fire and hoping that it will blow up. In actual fact, it's not unreasonable to imagine a scenario where Tether haven't done much wrong but the FUD becomes a self fulfilling prophesy - which could lead to panic selling and USDT losing its USD peg. It's happened on a number of occasions already - but who's to say that it doesn't get out of hand.

 

[letitroll]

Terra’s stablecoin does its own 2008 crisis — UST crashes and takes Bitcoin with it​

Terra’s stablecoin does its own 2008 crisis — UST crashes and takes Bitcoin with it

A store of inflation, a hedge against value.

davidgerard.co.uk

 

[Brendan Burgess]

What is a dollar, anyway?​

It’s important to remember that very little of this has anything to do with actual money. We’re talking about a token priced in other tokens, which are priced in other tokens, which might be tradeable for actual money at some point.

DeFi means a lot of utterly illiquid rubbish can be claimed to have a “price.” This doesn’t mean you can get that many actual dollars for it, or that they even exist in the system.

Hardly anything in the UST system touches an actual dollar at any point. The closest are the parts that touch BTC or ETH, which at least have actual-dollar prices.

There was never anything like $18 billion in actual dollars backing UST. The massive numbers you see in headlines about crypto are a lie.

 

[tecate]

We might as well have gotten Letitroll / Duke / Brendan to do that write up - as the author - in his blog!! - is vehemently and diametrically opposed to decentralised crypto.

I'm off to call interpol and have them call off the search - welcome back letitroll.

 

[Brendan Burgess]

is vehemently and diametrically opposed to decentralised crypto.

Hi tecate

I presume that this bias of his means that there was no UST crash or Bitcoin crash and that he was making it all up?

Brendan

 

[tecate]

Hi tecate

I presume that this bias of his means that there was no UST crash or Bitcoin crash and that he was making it all up?

Brendan

What his bias means Brendan is that he has zero credibility. Given the stuff that he has come out with over the years, I couldn't even have a grain of confidence in anything that he comes out with. That doesn't in any way mean that there are not issues to be resolved within crypto projects or related to the crypto ecosystem or digital asset infrastructure, regulation, etc. etc. He may well start off with genuine grievances re. defective items relative to bitcoin, tether, terra/luna, etc - but given where his bias is at, I can in no way take his word on the step he has persistently gone with in claiming things that he can't substantiate.

If all someone is predisposed to do is to seize on anything they can grasp at to give it a dressing down and run it into the ground, that might provide validation to your position on the subject but that's as far as it goes.

I'm well aware of the issue with UST/Luna and it's something that interests me. It's a subject that's being discussed extensively within digital assets circles (and was a topic before it even happened - as algorithmic stablecoins have had technical difficulties in maintaining their USD pegs). It's an incredibly difficult thing to put together but that's innovation for you. One thing is for certain is that both bitcoin and the digital assets space generally will benefit from this short term difficulty.

Bear in mind also that although it has some bearing on Bitcoin insofar as the Luna Foundation Guard put about $1 billion worth of bitcoin on its balance sheet, you'll appreciate that if we go down this rabbit hole, then we're going into the intriacies of another project entirely.

 

[Brendan Burgess]

What his bias means Brendan is that he has zero credibility. Given the stuff that he has come out with over the years, I couldn't even have a grain of confidence in anything that he comes out with.

I am still confused. Are you saying that his report that UST and Bitcoin crashed is made up?

Brendan

 

[tecate]

I am still confused. Are you saying that his report that UST and Bitcoin crashed is made up?

I'm very clear in what I'm saying ->

He may well start off with genuine grievances re. defective items relative to bitcoin, tether, terra/luna, etc - but given where his bias is at, I can in no way take his word on the step he has persistently gone with in claiming things that he can't substantiate.

If all someone is predisposed to do is to seize on anything they can grasp at to give it a dressing down and run it into the ground, that might provide validation to your position on the subject but that's as far as it goes.

If there is anything in the above that you don't understand, come back to me. However, just so that we're clear, I have not seen anyone suggest that UST didn't lose its USD peg or that this saga (based on the LFG having taken a significant position in BTC) hasn't had a knock-on effect on Bitcoin's unit price.

 

[DazedInPontoon]

If tether fails I bet you'll basically see articles almost word for word like this one except with Tether in place of Mt Gox:

Bitcoin Sees the Grim Reaper

Mt. Gox trapping customers’ money could be the last straw for the virtual currency.

nymag.com

I held coins through that, I was of course unaffected directly since I self-custody. In the ecosystem/price it was short term chaos, but long-term irrelevance for those who had not kept coins on Gox.

... and now we're at that point I suppose but in a twist Tether wasn't the first stable coin to experience a loss of peg afterall. This twitter thread is apparently a *good* description of the UST/Luna situation https://twitter.com/jonwu_/status/1523793482850050048 though there seems to be a lot to unpack there and I don't think I care enough to spend more time really understanding it in depth.

I'm not worried about bitcoin, this is just another example of why not requiring backing in order to function is better than backing and why I never touch stable coins.

 

[tecate]

I'm not worried about bitcoin, this is just another example of why not requiring backing in order to function is better than backing and why I never touch stable coins.

This is the point. The likes of Gerard have always claimed that a Tether collapse would spell the end for Bitcoin. Here we have an algorithic stablecoin of significant market cap. (and vested in bitcoin as a collateral asset) losing its peg and Bitcoin is still alive and kicking (albeit with a short term hit on unit price).

 

[Brendan Burgess]

If there is anything in the above that you don't understand, come back to me.

Why do you have to make it so complicated?

I asked a simple question and you could have confirmed that he was correct in his report of the facts.

That is all I was trying to establish without having to read and parse a long essay on his history.

Brendan

 

[tecate]

Why do you have to make it so complicated?

I'm not seeing anything complicated in my answer although I'd wager there's a smattering of the rhetorical at play here.

I asked a simple question and you could have confirmed that he was correct in his report of the facts.

I am not stating that he was and is correct 'in his report of the facts'. I'm stating that nobody has disputed that UST lost its USD peg and that there was some short term impact on Bitcoin unit price. I'm also stating that Gerard's past record is to go beyond facts to make allegations he has been unable to substantiate.

That is all I was trying to establish without having to read and parse a long essay on his history.

I'm sorry if you find my responses tedious but respectfully, if I was to respond a second time, I wouldn't respond any other way - it's necessary in order to respond with some degree of context, nuance & accuracy.