Basically, tethers are printed out of thin air and poured into BTC and other cryptos to inflate prices and prevent them from crashing. Each tether is supposed to be backed by a USD, so that printing millions of them and pouring them into bitcoin = real money, but in reality, every indication is that tethers are fraudulent and NOT backed by $$.

The clear implication seems to be that shady groups are pumping in counterfeit money (tethers) into crypto in order to induce legitimate money to buy in. Then, the fraudsters sell their stuff, leaving the newer people holding the bag when the fraud gets uncovered.

Here's what I mean:

https://www.newsbtc.com/2017/09/05/yet-another-25-million-tethers-created-blue/

https://cryptovest.com/news/bitcoin-at-11000-still-propped-by-usdt/

If I'm missing something, feel free to correct me. But this really doesn't seem good.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35104112)

And what you are saying is kind of what I'm getting at. At some point, the regulators will crack down on this stuff, and when they uncover the apparent fact that a good portion of the rise was fueled by literal counterfeiting/fraud, that could be the catalyst that sends it all crashing down.

I'm not an authority or anything; this is just how it seems to me. I'm curious how others feel about this. Just google tethers and the whole thing seems shady as fuck. For example, this is the very first result for "tethers and bitcoin."

http://fortune.com/2017/12/05/bitcoin-btc-price-usd-tether-limited-bitfinex/

But no one is talking about this.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35104155)

why is necessarily important for them to clearly show that each individual tether is backed by usd dollar for dollar? it’s not like insurance companies have to have enough money to cover every claim at all times. or banks have to have every dollar deposited on hand at all times . I Do agree that the issues you point out are issues, but i don’t think usd tethers are per se bad or anything

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35104186)

https://seekingalpha.com/article/4131159-regulators-must-investigate-bitcoin-tether

"Numerous indications of fraud (failure to produce an audit, opaque banking relationships, strong correlation between Tether’s supply, and the price of Bitcoin, among other things) led me to believe that Tether Limited was issuing fraudulent Tethers (i.e not backed by USD) and funneling them into other exchanges through Bitfinex to buy Bitcoin, rapidly increasing its price in the process. Today, I present additional indications of fraud that confirm my hypothesis regarding the flow of funds (i.e. from Tether Limited to other exchanges via Bitfinex)."

There are a million other articles like this if you Google.

USD tethers are not per se bad if they are actually backed up by $$$. But I made this thread because all the signs are present that the tether company is lying, and if so, couldn't prices PLUMMET once the regulators eventually uncover this?

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35104206)

It's hard to see how it's a systemic risk, unless I'm missing something.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35104267)

Since literally tens of millions of these tethers have been printed and then pumped into BTC to increase its price, you don't see how this could be a systemic risk once this fraud is realized? I would think the same risk is why companies can't just print tens of millions $$$ of fake money and use that to pump up their share price.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35104474)

tethers = artificial liquidity, even more important than their trading volume would suggest given it always gives an "easy" way to cash out even if exchanges which connect to banks get clogged. this allows peace of mind to someone flipping altcoins. tethers go poof, liquidity crisis: people freak out (just a fraction) and want their hard money, price drops, exchanges lock up (they're already bogged down as it is), price drops more, etc.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35104512)

Traders use it as a safe haven to avoid large losses, not with the intent of using it to cash out. I don't believe a significant number of people actually believe that's a route they can use to easily cash out.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35104687)

My gut says that tethers itself isn't integrated into the ecosystem in a way to make everything crash. But perhaps it could be the catalyst that would do it, I wouldn't deny that. However, any number of bad events could cause a run to the banks.

For example, I think Coinbase is running a Ponzi scheme. If they are exposed, that would cause the ecosystem to collapse, IMO.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35104640)

b) just do FDIC insured--ah, fuck

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35181093)

https://mobile.twitter.com/tetherprinter?lang=en

That makes $200 million in 20 hours. Nope, nothing to see here!

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35183137)

https://tonyarcieri.com/the-tether-conundrum

Guess this guy read my thread and decided it was time to discuss this issue, while many on XO keep their head in the sand.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35190722)

It’s ironic because I’m heavily invested in the market, but I’m aware of this big risk.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35190865)

Does this end tether? What is the broader impact?

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35191078)

Certainly, people would be unable to withdraw their tether into cash. Other cryptos may stop accepting tether, making existing tether worthless (if there are no reserves). It could also trigger a panic.

So while no one knows for sure, my gut tells me it will not end well overall.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35192052)

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35191094)

http://www.forexlive.com/news/!/bitfinex-and-tether-said-to-be-subpoenaed-by-cftc-20180130

Yet again, I was way ahead of the curve, yet many people here didn’t take it seriously, at least initially.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35277598)

Looking at BLP and the mostly comma pumo up above.

So I disagree that the whole market knows that tethers are a fraud.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35277972)

i don’t disagree that this may be devastating for a while to the market - the effect may be the same whether it is or isn’t proven fraud

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35277997)

Date: January 30th, 2018 2:12 PM

Author: Darsint

do you really think that the market cap is 500B? if you enter a buy or sell order of 10M it will pump/tank any coin by a massive amount.

now imagine buy orders of 800M in fake money that has been printed over the past month. how much do they inflate the price?

wait they've alreay done this study:

"Tether printing moves the market appreciably; 48.8% of BTC’s price rise in the period studied occurred in the two-hour periods following the arrival of 91 different Tether grants to the Bitfinex wallet."

http://www.tetherreport.com/

tether is about 15% of ETH trading volume, and 12% of BTC trading volume.

it's one thing to say you don't believe tether is fake, but you have to be really dumb or willfully blind if you think that it IS fake but wont have a massive impact on the market

(http://www.autoadmit.com/thread.php?thread_id=3876130&forum_id=7#35278083)

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35278240)

I’m a bit annoyed that I completely nailed this tether fraud issue yet didn’t sell myself.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35303188)

Now that the fraudulent tethers aren't around to prop up crypto prices, TIMBER!!!!

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35333978)

I'm down a bunch right now but I don't even really care. Yet, when I had sellcucked and missed crypto soaring, I was infuriated. Whenever I was unhappy, I'd think about how I could have been a crypto millionaire if only I held on, and wanted to hang myself. So even though I think the end of the tether fraud = prices are fucked, I prob won't sellcuck any time soon.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#35334258)

https://mobile.nytimes.com/2018/06/13/technology/bitcoin-price-manipulation.html

SAN FRANCISCO — A concentrated campaign of price manipulation may have accounted for at least half of the increase in the price of Bitcoin and other big cryptocurrencies last year, according to a paper released on Wednesday by an academic with a history of spotting fraud in financial markets.

The paper by John Griffin, a finance professor at the University of Texas, and Amin Shams, a graduate student, is likely to stoke a debate about how much of Bitcoin’s skyrocketing gain last year was caused by the covert actions of a few big players, rather than real demand from investors.

Many industry players expressed concern at the time that the prices were being pushed up at least partly by activity at Bitfinex, one of the largest and least regulated exchanges in the industry. The exchange, which is registered in the Caribbean with offices in Asia, was subpoenaed by American regulators shortly after articles about the concerns appeared in The New York Times and other publications.

Mr. Griffin looked at the flow of digital tokens going in and out of Bitfinex and identified several distinct patterns that suggest that someone or some people at the exchange successfully worked to push up prices when they sagged at other exchanges. To do that, the person or people used a secondary virtual currency, known as Tether, which was created and sold by the owners of Bitfinex, to buy up those other cryptocurrencies.

“There were obviously tremendous price increases last year, and this paper indicates that manipulation played a large part in those price increases,” Mr. Griffin said.

Bitfinex executives have denied in the past that the exchange was involved in any manipulation. The company did not respond to a request for comment this week.

The authors of the new 66-page paper do not have emails or documents that prove that Bitfinex knew about or was responsible for price manipulation. The researchers relied on the millions of transaction records that are captured on the public ledgers of all virtual currency transactions, known as the blockchain, to spot patterns. This method is not conclusive, but it has helped government authorities and academics spot suspicious activity in the past.

In particular, Mr. Griffin and Mr. Shams examined the flow of Tether, a token that is supposed to be tied to the value of the dollar and that is issued exclusively by Bitfinex in large batches. They found that half of the increase in Bitcoin’s price in 2017 could be traced to the hours immediately after Tether flowed to a handful of other exchanges, generally when the price was declining.

Other large virtual currencies that can be purchased with Tether, such as Ether and Zcash, rose even more quickly than Bitcoin in those periods. The prices rose much more quickly on exchanges that accepted Tether than they did on those that did not, and the pattern ceased when Bitfinex stopped issuing new Tether this year, the authors found.

Sarah Meiklejohn, a professor at the University College London who pioneered this sort of pattern spotting, said the analysis in the new paper “seems sound” after reviewing it this week.

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Philip Gradwell, the chief economist at Chainalysis, a firm that analyses blockchain data, also said the study “seems credible.” He cautioned that a full understanding of the patterns would require more analysis.

Mr. Griffin previously wrote research pointing to fraudulent behavior in several other financial markets. He drew attention for a 2016 paper that suggested that a popular financial contract tied to the volatility in financial markets, known as the VIX, was being manipulated. A whistle-blower later came forward to confirm those suspicions, and now several active lawsuits are focused on the allegations.

Beyond his work at the University of Texas, Mr. Griffin has a consulting firm that works on financial fraud cases, including some in the virtual currency industry.

“The relationship between Tether and the price of Bitcoin has been flagged for months within the community,” said Christian Catalini, a professor at the Massachusetts Institute of Technology who specializes in blockchain research. “It is great to see academic work trying to causally assess if market manipulation is taking place.”

The new paper is not the first academic work to identify manipulation in the virtual currency markets. A paper published last year by a team of Israeli and American researchers said much of Bitcoin’s big price increase in 2013 was caused by a campaign of price manipulation at what was then the biggest exchange, Mt. Gox.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#36238020)

Plenty of know nothing, arrogant fools ITT, while I am proven right yet again.

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#37253038)

Unless they are getting help in pepetuating the fraud, we know they have had in bank accounts roughly what they are supposed to

This thread was wonderfully timed with the bubble popping though and anyone that sold back then because of this poast should be thanking you

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#37254062)

(btc moons over exact same period)

(printer turned off again)

(btc lands)

Haha nothing to see here move along haha

Tether accounts for 1/3 of all crypto volume in a market where shitcoins are dead btw very natural

(http://www.autoadmit.com/thread.php?thread_id=3852449&forum_id=7",#38735769)