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    • Hold on to your hats: Tether under investigation

    • Noticed the crypto markets plunging? Well, if this report is true, then the real bloodbath is yet to come.

      https://www.bloomberg.com/news/articles/2018-11-20/bitcoin-rigging-criminal-probe-is-said-to-focus-on-tie-to-tetherwww.bloomberg.com

      It's somewhat of a open secret that Tether was used to manipulate crypto markets. Whenever BTC price started to go down, suddenly there would appear a large infusion of Tethers (a 'stablecoin', whose value is pegged to dollar - 1USD = 1Tether), immediately used to buy BTC and the markets would recover. Just in the January of this year, there was close to $2 billion Tethers printed. By design that would mean that someone deposited $2 billion of actual, fiat, US Dollars somewhere and got equal amount of Tethers in exchange. Except the Tether issuers never showed any bank accounts, passed an audit, or proved that they have the funds in any other (credible) way. So, yeah, my bet is that it was a scam, either dirty money or outright fraud (maybe combination of both).

      The trouble is that if Tether goes away, crypto market will probably tank, and hard, as there doesn't appear that there is true liquidity in the market. In other words, it's "sorry for your loss" time.

      Full disclosure: I do hold some cryptos (mostly Ether), but liquidated most of it, and now regard it as Monopoly money and fully expect to lose whatever's left. I believe cryptocurrencies are a great idea, but currently available implementations are lacking (in both tech and governance).

    • It's about time!

      Realizing how sketchy Tether is and how vital it is to propping up cryptocurrency markets was one of the reasons I liquidated too. It's really hard for me to imagine any scenario where Tether isn't a massive scam.

    • I have to say, jpop and yaypie, it's very reassuring to hear how you think about this. I have many friends and engineers I respect who are long on Bitcoin, so I often wonder what I'm missing. However, the idea of a few big players propping up Bitcoin via Tether sounded like it could be true.

      I guess this is no longer a good topic for Thanksgiving?

    • Forbes recently had an article illustrating the scammy nature of the companies and individuals trying to make a quick buck:

      Without identifying anybody in particular, suffice it to say that a goodly number of Bitcoin prognosticators are simply shilling and attempting to pump the price of Bitcoin up because they themselves are invested in cryptocurrency companies. This is where the scam comes in. Very simply, cryptocurrency investors are being actively mislead — Jamie Dimon’s fraud — into investing in something that doesn’t have a realistic chance of yielding the promised results. In the old days of securities regulation, this was known as selling “blue sky” and resulted in state securities laws of the same name.

      The Blockchain itself is a good technology but people often lump it in with Bitcoin.

      Here is the article:

      The Great Cryptocurrency ScamAs cryptocurrencies collapse it is long past time for regulators to step in.www.forbes.com

    • My guess is that this Thanksgiving the relatives will bring it up, mostly to heap blame on those who convinced them to invest during the last Thanksgiving. :-)

    • Yep, crypto markets seem to be destined to repeat every type of scam and fraud that brought about all the different forms of regulation that exists in the traditional financial markets. It will take some time to play out, so patience is required.

      In the meantime, I just look out for solid tech and teams that build the foundations that solve important problems.

    • The article itself is taking a pretty limited view (financial one) in coming to conclusions. I do believe most of the market today exists to fleece the not-so-savvy investors (the old maxim: when dentists and schoolteachers start to invest - it's time to exit the market), but the tech itself will survive and I'm pretty confident it will have significant impact on how finances and money works, worldwide. It's just important to realise that we're in the early days of the paradigm shift, and most of the big players and early leaders will disappear and go bust before we get to see the actual, non-speculative, real-world adoption of this technology.

      We're in the era of Gopher, UseNet and telnet right now. Real applications are yet to appear, truly transformative technologies have not been invented yet. No crypto Google, Amazon or PayPal exist yet. But they are coming.

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