If DOJ can show evidence of cartels, terrorist cells, and other unsavory entities laundering their money through bitcoin, ICOs, ethereum, altcoins and tether, then anyone who has ever taken crypto to work on a project, anyone who handled the influx of cash to exchange it for crypto by selling Tether (which is all of the major exchanges), are headed for a storm of hurt.
We are no longer in SEC turf and DOJ has a conviction rate of 93% as of 2012, a trend which has been increasing. It's one thing to argue against Howey Test or hide money from the Taxman. It's a whole new level of shit storm to be accused of laundering money for terrorists and drug cartels.
> If DOJ can show evidence of cartels, terrorist cells, and other unsavory entities laundering their money through bitcoin, ICOs, ethereum, altcoins and tether, then anyone who has ever taken crypto to work on a project, anyone who handled the influx of cash to exchange it for crypto by selling Tether (which is all of the major exchanges), are headed for a storm of hurt.
Oh no, the cartels and terrorist cells would have to go back to conducting all their illegal activities in physical US dollars.
> We are no longer in SEC turf and DOJ has a conviction rate of 93% as of 2012
DOJ has such a high conviction rate because they only prosecute cases they expect to win.
> then anyone who has ever taken crypto to work on a project, anyone who handled the influx of cash to exchange it for crypto by selling Tether (which is all of the major exchanges), are headed for a storm of hurt.
Why would all cryptocurrency transactions be tainted by this? Or are you saying that the value (relative to real money) would plummet?
Well not fine from a business perspective. The fines were larger than the money made from such activities. If HSBC were primarily a front for the cartels, it would have gone bankrupt.
You definitely see them prosecuting people who accept cash from cartels and terrorist cells or engineering financial entities explicitly to do so. Tether looks a whole whole lot like one of those.
Wait, isn't that basically the basis for civil forfeiture? "We don't know why you would have this much cash, so prove it isn't related to drugs/laundering"?
In fairness, if I set up a bank which, by accident or by design, made it exceedingly easy to launder millions in cash relatively quickly, you can bet the DOJ would have a problem with that.
Transporting millions in cash is risky (either you trust the courier with that and risk their life, or you do it yourself and risk yours), and doing so internationally is extremely challenging and/or expensive. By contrast, doing it digitally is quite easy and fast.
It feels a bit disingenuous to insist the two are the same.
Public companies tend not to get punished because it ultimately punishes the shareholders. Chickenshit club book talks about all the reasons why the DOJ doesn't go after the big public companies with criminal prosecution.
There's no trail (or not an easy trail of evidence) to know for sure where cash payments went from and to, whereas blockchain provides that trail - you just need to figure out who owns or has claimed to own the wallet etc; having that as a resource would make conviction much easier, and magnitudes easier to find people involved. I don't know how pleading ignorance would hold up depending on the role you played in any illegal activities.
Isn't traceability a positive aspect for cryptocurrency in this case? You've got nothing to worry about if you're an honest investor, and frankly, this is one of the benefits of a pseudoanonymous crypto.
Along with Civil Asset forfeiture mentioned by others, there are also:
* Know Your Customer laws,
* mandatory Suspicious Action Reports of all transactions over a certain value,
* anti-Smurfing or anti-Structuring laws that against structuring deposits to be under the threshold of SAR reports,
* a whole host of foreign transaction laws
* and plenty more...
So yes, prosecution of use of cash is very alive and healthy with people getting prosecuted for all of these crimes related to use of cash. And this is before any prosecutions that establish direct use for terrorism or drug cartels.
I've used cash for over 20 years to buy things, I have not been prosecuted for it. Neither have any family, friends, coworkers, neighbors, etc that I know. Note that I said "everyone", since the comment I replied to basically said everyone who used some shitcoin service would be open to prosecution.
OOOOOOOOOOOOHHHHHHHHHHHHHHHHHH SHHHHHHHHHHHHHHHIIIIIIIIIIIIIIIIIITTTTTTTTTTTTTTTTTTTTT - watch out for your US Dollars y'all, I heard at least one physical paper $20 bill was used to buy an 8th of reefer in Rhode Island this one time... the Fed is winding up its operations as we speak...
Bitcoin has never been anything but a money laundering scheme for drug dealers and tax cheats and various other criminals. It’s literally the only valid use case for it.
Price fluctuations are normal for markets. No one expects the exchange rate between food and oil to be constant, why expect it to be constant between a money and food?
If you need down-side risk insurance, by a put option. When letting a government have a monopoly of the risk management of a money, you are essentially buying a collar (long stock + long put + short call) trade which is expensive for people who don't need that exposure.
> why expect it to be constant between a money and food?
Because sometimes all I want to do is buy a bigmac with some cash and not worry about put options or hedging risk in currency fluctuations?
Why expect the government to keep a predictable exchange rate between money and food? Because then I don't have to worry about that and neither does anybody else. That adds incredible value to an economy.
>all I want to do is buy a bigmac with some cash and not worry about put options or hedging risk in currency fluctuations
Who says you have to perform the hedge? Just contract with a firm to provide that service. Having the state grant a monopoly to banks to perform that service makes about as much economic sense as saying the management of any good should be given a monopoly by the state.
>I don't have to worry about that and neither does anybody else.
If you don't factor in inflation to your economic calculations, you'll go out of business. It's not an option. People who run companies or manage substantial finances have to constantly be taxed by hedging inflation. Price inflation of housing is a perfect example.
Eric Holder neutered the DOJ because he was too afraid to lose cases.
The only reason their conviction rate is so high is because they don't bother to prosecute the majority of crimes anymore. These days if you can pay an arbitrary fine, you can get away with pretty much any financial crime.. (laundering money for drug cartels, etc.)
People have used USD to fund crimes, but it would be ridiculous to say that unrelated restaurant owners would get in trouble for the mere act of accepting USD.
The US has already given guidance on this. They have already stated that BTC and other cryptos are a commodity, and legal.
The SEC itself disagrees with your absurd notion that anyone who even accept crypto as payment could be in trouble.
Duped? I use gitcoin now to build software projects. Is that use case a figment of my imagination?
And nice concern troll. I think there are two types of people in crypto. Some like me, who are building things and see the huge potential in decentralized infrastructure, and then speculators that will dump money into anything as long as they see a positive return. Do you really feel that bad for the speculators? No ones forcing them to invest in shitty ICO's with tons of red flags.
I think crypto is very manipulated, but people aren't being duped because of that manipulation. (aside from a few situations like Paycoin where the "founder" Josh Garza promised a price floor; he has been since prosecuted)
Losses in cryptocurrencies like Bitcoin and ICOs are the result of individuals hyping each other up and smoking hopium. Opportunities have to at least pass a smell test before you can claim you've been "duped".
Yes, the underlying idea has always been sound enough to attract large investment without manipulation. Even if the legal and ethical true price is under $1000, that's still more natural growth than, say, an additional 20x added on by manipulation.
There's no compelling reason to conclude that any of the bubbles have been caused by fraud. I certainly agree that it's possible, perhaps probable, but Gox/Willy and Tether are mostly compelling narratives; when you dig down into the specifics, it's hard to connect them to price action.
These stories fit peoples' expectations for fraud in Bitcoin, they lust for scams and intrigue.
The null hypotheses is boring but also quite plausible: bitcoin sees bubbles because price has been steadily rising and this eventually triggers positive-feedback cycles that cause the boom and bust. The insensitivity of Bitcoin price to news/events supports this hypothesis: price is the news.
The fraud narratives are more tea-leaf reading than actual analysis. Just dive into the Willy bot oeuvre if you'd like a sense of that.
There's a decentralized peg to USD called DAI which is backed by ETH as collateral. It's maintained the 1$ USD peg throughout the entire crypto bear market. MakerDAO is quite impressive, and I hope to see it absorb the liquidity away from tether.
How do you define "1$ USD peg"? As of right now, the price of DAI is $0.98, 2% off its "peg". Asking as a serious question, since I see this statement a lot.
That's just due to liquidity. The peg is maintained through arbitrage, so of course if you have low liquidity you're going to have fluctuations around the peg.
Dai is not really a traditional peg, as in the sense that there is someone who always trades on the market to maintain the peg (a liquidity provider like in USDT). It's more of an example of a system that has carefully balanced economic incentives. The fun part is that anybody can mint or destroy DAI, and take advantage of arbitrage opportunities.
For example, if I ever see DAI trading at, say, $1.02 then I would quickly mint some new DAI and sell for USD. Likewise, if DAI is at $0.98 then I would buy it back, then burn what I've minted, collecting a profit.
Well, pegs with a defined fluctuation boundary aren't that uncommon, for example, Danish Krona currently is pegged to Euro in such a manner - where it's pegged to within +/- 2.25% of a specific rate.
In essence, if you declare a plausible intent of keeping a rate near 1$ by accepting limitless orders to buy it at 0.98$ and sell it at 1.02$, and can keep that promise, then that's a decent peg.
I’d argue that by virtue of being totally decentralized and permissionless, an unregulated secondary market is impossible to prevent and therefore an inherent feature / flaw of cryptocurrency. It’s not a necessary step to adoption, it’s just impossible to stop. It’s also what makes cryptocurrency very difficult to use for anything.
USD isn't decentralized or permissionless so regulation should be possible on that side. And the fact that you can't redeem USDT shows that it's kind of working.
The problem with that market is that you're just handing off USDT to another sucker. There's no official way to take USDT out of circulation when demand goes down.
It's a flaw in all current cryptocurrencies that they suffer from an opaque, trust-based exchange infrastructure.
I'd argue that it's inherent in the sense that none of them factored that into their model. As such, I'd argue that the models are inherently flawed because a trustless core is fundamentally compromised if you only have a trustful interface to the rest of the world.
To that end, I agree with your basic point: you need an interface to the outside word that has similar properties to the core model. At least, trustless, transparent, auditable. Probably anonymous as well.
> To that end, I agree with your basic point: you need an interface to the outside word that has similar properties to the core model. At least, trustless, transparent, auditable. Probably anonymous as well.
Which is impossible because at some point the entire thing needs to interface with humans and human processes -- neither of which is infallible. The entire premise of Bitcoin, Ethereum and "Code Is Law" is broken at the core. They all try to get rid of "trust" by replacing it with computer code but at some point you need to interact with meatspace and meatspace is not logical, and not at all trustful.
In other words, trying to make everything trustless is futile because at the end of the day, you eventually have to trust other people.
Wait, what's entirely unregulated about it, if there's a criminal probe? There aren't criminal probes on something that's unregulated; well, at least anything that deals in USD has to deal with U.S. law, regardless of tax haven locale in the world. And Tether claimed to be a USD peg, which means they claimed to own USD, and as an institution that deals in USD they're subject to laws.
Oh, gosh. The infantile methodology of purposely misreading something so it's literal and thus nonsensical (or comical). I obviously meant financial institutions - which Bitfinex is.
A good point, but perhaps we can agree that the mechanisms of the BTC(etc.)-USD exchanges are much less regulated than those of traditional equities/commodities/futures, etc. markets.
For sure. I think this Tether thing will be a poster child to reverse that disparity. And having watched the Tether thing hitting the fan for the past 12 months, including when everyone knew something was up and their suspicious transactions were being posted, I'm disappointed the Law didn't crack down sooner.
Out of curiosity, is that actually true? I mean Bitfinex is doing business in the US. I thought that was the link to being able to apply US laws on them. Does creating a USD backed security in another country automatically put you under US law? I'm asking because I literally don't understand how that could work.
I'm glad you asked because I had to do a bit of research to come up with some evidence - stuff that got lost in the back of my mind when I read about it a while back. Essentially the US has jurisdiction if it's cleared with USD - and how can it be cleared with USD if there's not some US institution in one place or another. Someone with legal expertise should chime in and correct my primitive babblings. But how about:
> how can it be cleared with USD if there's not some US institution in one place or another
Anybody can setup a little hut where they take in physical US dollars and give out virtual dollars which can be transferred over the internet, ala Tether.
If you operated such a hut outside the jurisdiction of the US, it doesn't matter what laws the US has, they don't apply to you.
This is the point I was trying to make that you dismissed as "infantile": just because you hold US dollars doesn't mean US laws apply to you.
If you operated such a hut outside the jurisdiction of the US, it doesn't matter what laws the US has, they don't apply to you.
I don't know what a 'hut' is in this context, but if it's connected to the USD payment system, not only can the long arm of the U.S. try to apply itself, but the said hut can be cut off via pressure on the international banking system. For the former, see the links I sent, which includes a case about New York State applying laws to an overseas entity; for the former, consider Iran and sanctions.
If your hut consists of a person shuffling US currency around with thumbs and rubber bands, well, that's a different story.
Whether this is a flaw or not depends on whether tethers are backed 1:1 by USD deposits as advertised. If so there's not much wrong apart from maybe money laundering. If not it's fraud in most people's books.
> This doesn't seem like an inherent flaw in crypocurrencies
Unregulated financial markets don’t work. You’re selling something intangible whose benefits are inherently only realisable after an indeterminable amount of time. That encourages fraud. This is a core and fundamental failure of cryptocurrencies.
No, it isn't. Cryptocurrencies in this aspect are the same as the fiat money you and I use today.
The problem was everyone deciding to brand Bitcoin as an investment vehicle instead of as a currency.
Cryptocurrencies are money. The benefits are immediately realizable. If I gave you $5 in exchange for a service worth more than $10, promising that due to market forces that $5 would soon have the buying power of $10, you would laugh in my face and demand the $10 immediately, not later. Yet somehow we decided this was OK to do with crypto.
It has to do with a lack of knowledge, partially due to world governments initially being hostile towards crypto and then indifferent.
Were this technology correctly introduced to society by trusted parties with regulated information, we wouldn't be having this conversation about whether or not cryptocurrency is flawed due to an inherent volatility that comes with low market adoption.
I wonder if you are actually disagreeing. One of the biggest problems with BTC, in particular, is that it is inherently deflationary. This encourages the thinking that its value will inevitably rise. BTC was originally popular with people who also thought that it was a good idea to buy up and hold gold and silver.
BTC solved an actual financial problem, though. There was a desire to make distributed financial transactions. The most obvious application was to make purchases where moving the money through central, regulated banks was undesirable (e.g. buying drugs or money laundering).
However, there were other applications as well. For my part, although I've never actually spent any BTC (I have a small amount that I actually mined with my CPU, if you can believe it!), the attraction was the possibility to make payments online because as non-permanent resident foreigner, every credit card company refused my business. It's slightly easier to get a credit card now, but I still don't have one.
In other places in the world, the banks are corrupt. My friend's wife had her employer pay her with BTC because she would be sure to actually receive payment. In some places, depending on who you are it is literally impossible to get a bank account. This is a form of marginalisation and discrimination. BTC (or something like it) can solve this problem, presuming you can find a way to convert it to fiat currency.
But the problem here is that despite the potential (or even because of it) the field is littered with fraud. The banks do not want a distributed payment processing system. They want to be in control. Especially in countries where they are abusing the customers, or actively marginalising parts of the population -- it's not an accident. They don't want to fix the "problem".
So the existing regulated industry wants no part of cryptocurrency (at least from the perspective of an actual decentralised payment processing system that removes control from them). This creates the vacuum that attracts the fraud. It also makes the adoption for beneficial transactions (e.g. not drugs and money laundering) very difficult because legitimate vendors have to adhere to the regulated system and cryptocurrency does nothing to make that easier. At best it doesn't make it harder. As many cryptocurrency nouveau-riche can identify with, figuring out how to pay your taxes with the capital gains/losses from FOREX is not trivial.
While I'm hopeful that a distributed payment solution will eventually arise, I think the OP's point that the pains we are experiencing are pretty much inevitable is correct. Though we could make our lives a lot easier if we used an inflationary cryptocurrency (because then you'd be forced to spend it quickly).
This is a valid point were it not for the fact that being structurally designed to thwart regulation (by obscuring the link between account and account holder) is the main difference between cryptocurrency and ordinary digital cash, and is a major - if not the principal value proposition of the technology.
IOTA is moving towards an open source coordinator (released today on github), and eventually coordicide (which is what it sounds like). It's been the goal of the project from day one. Bitcoin had checkpoints when it started; the coordinator is analogous to checkpoints. Wouldn't touch XRP with a ten foot pole, though.
Checkpoints prevents the chain from being reorganized after a large number of confirmations have already passed. This is to prevent several days of transactions from being reversed.
IOTA's coordinator in contrast defines when a transaction can be considered confirmed.
Right. Perhaps comparing the coo to checkpoints isn't an apt analogy. However, the intent is the same. Without a coo, transactions would be probabilistic and confirmed once they went above a cumulative weight threshold, but the transaction volume is still too low to prevent a Sybil attack, hence the coo. It's still an open question whether or not the tangle can function coo-less, but it makes for an interesting experiment.
In a world where I get to unilaterally set the rules, the line would be when one person or company is the only entity that can officially bless the mechanism that is tasked with approving and verifying transactions. As far as I know Ripple Inc, a for profit company, owns, runs, and controls all the nodes that approve XRP transactions.
I dont really see how XRP is really any different than Paypal. If they can ban me, stop me from sending my tokens to whoever I want, or reverse my transaction I don't feel as though im getting any of crypto's benefits.
Not sure if thats general thinking, but it is at least mine.
Ripple Inc only controlled all validating nodes until stable third party nodes were established. Each node decides which other nodes to trust. There is a default Unique Node List (trusted nodes) provided by Ripple. But, the UNL is not a list of all validating nodes.
At this time Ripple only controls 39% of nodes on the default UNL. If Ripple Inc turned to dust the XRP network would continue on.
No entity, not even Ripple Inc., can freeze XRP or prevent you from sending it. Assets can be frozen by the issuing entity but XRP cannot ever be frozen.
Yes, if you can't recognize XRP as the shitcoin it is, you really should get out of crypto. Maybe you can get lucky trading it, but it doesn't offer anything useful.
I don't think stablecoins are true cryptocurrencies no. Ripple is absolutely not.
IOTA has said you should consider a transaction confirmed if their centrally controlled coordinator has accepted it. So no it's not a cryptocurrency as they should be decentralized.
Hilarious, on the bubble chart "Why did the government let this happen", we are now at this point "pls g-men step in and dont let this disaster happen" and "put those responsible behind bars" etc.
So Tether seems to have been hanging out at about 0.97 lately ... isn't that a massive problem? If anyone really believe they were worth 1.00 USD we'd be vacuuming up those 3 pennies.
Nothing... they can also print them at will too, there's no true proof of funds. The site is a joke, I've been watching it since it launched and you can never create an account.
Only way to obtain USDT is second hand on exchanges.
The ledger doesn’t report the dollar price at which Tethers were bought and sold. The ledger could remain intact while Bitfinex falsifiés the prices of trades.
133 comments
[ 2.6 ms ] story [ 195 ms ] threadWe are no longer in SEC turf and DOJ has a conviction rate of 93% as of 2012, a trend which has been increasing. It's one thing to argue against Howey Test or hide money from the Taxman. It's a whole new level of shit storm to be accused of laundering money for terrorists and drug cartels.
https://medium.com/@justsomeperson/uncovering-the-real-carte...
Oh no, the cartels and terrorist cells would have to go back to conducting all their illegal activities in physical US dollars.
> We are no longer in SEC turf and DOJ has a conviction rate of 93% as of 2012
DOJ has such a high conviction rate because they only prosecute cases they expect to win.
Things like kingpin laws (continuing criminal enterprise) and RICO probably help the conviction rate.
Why would all cryptocurrency transactions be tainted by this? Or are you saying that the value (relative to real money) would plummet?
https://www.reuters.com/article/us-hsbc-probe/hsbc-became-ba...
https://www.bloomberg.com/news/articles/2018-11-16/gett-is-s...
The government has already made its stance clear. Crime is OK if it's done in a complex way.
They just need to formalize it into a law that way citizens are aware of the complexity threshold that is required for a crime to be legal.
Transporting millions in cash is risky (either you trust the courier with that and risk their life, or you do it yourself and risk yours), and doing so internationally is extremely challenging and/or expensive. By contrast, doing it digitally is quite easy and fast.
It feels a bit disingenuous to insist the two are the same.
https://en.m.wikipedia.org/wiki/HSBC_Mexico#Money_laundering
Not if you have to hire a lawyer to show the Bitcoins which left a violent criminal’s wallet were transferred to you legitimately.
Along with Civil Asset forfeiture mentioned by others, there are also:
* Know Your Customer laws,
* mandatory Suspicious Action Reports of all transactions over a certain value,
* anti-Smurfing or anti-Structuring laws that against structuring deposits to be under the threshold of SAR reports,
* a whole host of foreign transaction laws
* and plenty more...
So yes, prosecution of use of cash is very alive and healthy with people getting prosecuted for all of these crimes related to use of cash. And this is before any prosecutions that establish direct use for terrorism or drug cartels.
>f. People/exchanges/entities rarely use shell companies for legitimate purposes. And by rarely, I mean almost never.
Use case: a currency with better inflation characteristics than even gold.
If you need down-side risk insurance, by a put option. When letting a government have a monopoly of the risk management of a money, you are essentially buying a collar (long stock + long put + short call) trade which is expensive for people who don't need that exposure.
Because sometimes all I want to do is buy a bigmac with some cash and not worry about put options or hedging risk in currency fluctuations?
Why expect the government to keep a predictable exchange rate between money and food? Because then I don't have to worry about that and neither does anybody else. That adds incredible value to an economy.
Who says you have to perform the hedge? Just contract with a firm to provide that service. Having the state grant a monopoly to banks to perform that service makes about as much economic sense as saying the management of any good should be given a monopoly by the state.
>I don't have to worry about that and neither does anybody else. If you don't factor in inflation to your economic calculations, you'll go out of business. It's not an option. People who run companies or manage substantial finances have to constantly be taxed by hedging inflation. Price inflation of housing is a perfect example.
https://news.ycombinator.com/newsguidelines.html
The only reason their conviction rate is so high is because they don't bother to prosecute the majority of crimes anymore. These days if you can pay an arbitrary fine, you can get away with pretty much any financial crime.. (laundering money for drug cartels, etc.)
They didnt need bitcoin to do it.
The US has already given guidance on this. They have already stated that BTC and other cryptos are a commodity, and legal.
The SEC itself disagrees with your absurd notion that anyone who even accept crypto as payment could be in trouble.
And nice concern troll. I think there are two types of people in crypto. Some like me, who are building things and see the huge potential in decentralized infrastructure, and then speculators that will dump money into anything as long as they see a positive return. Do you really feel that bad for the speculators? No ones forcing them to invest in shitty ICO's with tons of red flags.
Losses in cryptocurrencies like Bitcoin and ICOs are the result of individuals hyping each other up and smoking hopium. Opportunities have to at least pass a smell test before you can claim you've been "duped".
These stories fit peoples' expectations for fraud in Bitcoin, they lust for scams and intrigue.
The null hypotheses is boring but also quite plausible: bitcoin sees bubbles because price has been steadily rising and this eventually triggers positive-feedback cycles that cause the boom and bust. The insensitivity of Bitcoin price to news/events supports this hypothesis: price is the news.
The fraud narratives are more tea-leaf reading than actual analysis. Just dive into the Willy bot oeuvre if you'd like a sense of that.
better than the electricity tax angle anyway
Obvious counterpoint: a viable secondary market is a necessary step to adoption of a cryptocurrency.
For example, if I ever see DAI trading at, say, $1.02 then I would quickly mint some new DAI and sell for USD. Likewise, if DAI is at $0.98 then I would buy it back, then burn what I've minted, collecting a profit.
Also note that with traditional USD pegs, they are not always on parity and hover a few cents from time to time. For example the HKD. https://en.m.wikipedia.org/wiki/Hong_Kong_dollar
In essence, if you declare a plausible intent of keeping a rate near 1$ by accepting limitless orders to buy it at 0.98$ and sell it at 1.02$, and can keep that promise, then that's a decent peg.
The market cap for tether went down 750 million recently so there appears to be some way to take it out of circulation.
https://coinmarketcap.com/currencies/tether/
Demand drops and the value of 1.00 USDT drops below $1.00, redeem the USDT yourself and profit on the spread.
I'd argue that it's inherent in the sense that none of them factored that into their model. As such, I'd argue that the models are inherently flawed because a trustless core is fundamentally compromised if you only have a trustful interface to the rest of the world.
To that end, I agree with your basic point: you need an interface to the outside word that has similar properties to the core model. At least, trustless, transparent, auditable. Probably anonymous as well.
Not really but they're clearly making an attempt in that direction.
Which is impossible because at some point the entire thing needs to interface with humans and human processes -- neither of which is infallible. The entire premise of Bitcoin, Ethereum and "Code Is Law" is broken at the core. They all try to get rid of "trust" by replacing it with computer code but at some point you need to interact with meatspace and meatspace is not logical, and not at all trustful.
In other words, trying to make everything trustless is futile because at the end of the day, you eventually have to trust other people.
The act of holding a US dollar bill in your hand doesn't bring you under the jurisdiction of the US government.
https://www.crowell.com/NewsEvents/AlertsNewsletters/all/For...
(NYS has jurisdiction over a foreign entity by virtue of a tie with a bank in the state.)
https://cblr.columbia.edu/the-u-s-jurisdiction-over-transfer...
(An article about jurisdiction of USD transfers.)
https://news.ycombinator.com/item?id=16267428
(Another recent HN discussion on this topic.)
Anybody can setup a little hut where they take in physical US dollars and give out virtual dollars which can be transferred over the internet, ala Tether.
If you operated such a hut outside the jurisdiction of the US, it doesn't matter what laws the US has, they don't apply to you.
This is the point I was trying to make that you dismissed as "infantile": just because you hold US dollars doesn't mean US laws apply to you.
I don't know what a 'hut' is in this context, but if it's connected to the USD payment system, not only can the long arm of the U.S. try to apply itself, but the said hut can be cut off via pressure on the international banking system. For the former, see the links I sent, which includes a case about New York State applying laws to an overseas entity; for the former, consider Iran and sanctions.
If your hut consists of a person shuffling US currency around with thumbs and rubber bands, well, that's a different story.
Bitcoin to USD exchanges are incredibly regulated. AML/KYC/SAR are all required by many governments.
Unregulated financial markets don’t work. You’re selling something intangible whose benefits are inherently only realisable after an indeterminable amount of time. That encourages fraud. This is a core and fundamental failure of cryptocurrencies.
The problem was everyone deciding to brand Bitcoin as an investment vehicle instead of as a currency.
Cryptocurrencies are money. The benefits are immediately realizable. If I gave you $5 in exchange for a service worth more than $10, promising that due to market forces that $5 would soon have the buying power of $10, you would laugh in my face and demand the $10 immediately, not later. Yet somehow we decided this was OK to do with crypto.
It has to do with a lack of knowledge, partially due to world governments initially being hostile towards crypto and then indifferent.
Were this technology correctly introduced to society by trusted parties with regulated information, we wouldn't be having this conversation about whether or not cryptocurrency is flawed due to an inherent volatility that comes with low market adoption.
...it would be fundamentally outperformed by said trusted party producing a database.
BTC solved an actual financial problem, though. There was a desire to make distributed financial transactions. The most obvious application was to make purchases where moving the money through central, regulated banks was undesirable (e.g. buying drugs or money laundering).
However, there were other applications as well. For my part, although I've never actually spent any BTC (I have a small amount that I actually mined with my CPU, if you can believe it!), the attraction was the possibility to make payments online because as non-permanent resident foreigner, every credit card company refused my business. It's slightly easier to get a credit card now, but I still don't have one.
In other places in the world, the banks are corrupt. My friend's wife had her employer pay her with BTC because she would be sure to actually receive payment. In some places, depending on who you are it is literally impossible to get a bank account. This is a form of marginalisation and discrimination. BTC (or something like it) can solve this problem, presuming you can find a way to convert it to fiat currency.
But the problem here is that despite the potential (or even because of it) the field is littered with fraud. The banks do not want a distributed payment processing system. They want to be in control. Especially in countries where they are abusing the customers, or actively marginalising parts of the population -- it's not an accident. They don't want to fix the "problem".
So the existing regulated industry wants no part of cryptocurrency (at least from the perspective of an actual decentralised payment processing system that removes control from them). This creates the vacuum that attracts the fraud. It also makes the adoption for beneficial transactions (e.g. not drugs and money laundering) very difficult because legitimate vendors have to adhere to the regulated system and cryptocurrency does nothing to make that easier. At best it doesn't make it harder. As many cryptocurrency nouveau-riche can identify with, figuring out how to pay your taxes with the capital gains/losses from FOREX is not trivial.
While I'm hopeful that a distributed payment solution will eventually arise, I think the OP's point that the pains we are experiencing are pretty much inevitable is correct. Though we could make our lives a lot easier if we used an inflationary cryptocurrency (because then you'd be forced to spend it quickly).
IOTA's coordinator in contrast defines when a transaction can be considered confirmed.
They are nothing alike.
I dont really see how XRP is really any different than Paypal. If they can ban me, stop me from sending my tokens to whoever I want, or reverse my transaction I don't feel as though im getting any of crypto's benefits.
Not sure if thats general thinking, but it is at least mine.
Ripple Inc only controlled all validating nodes until stable third party nodes were established. Each node decides which other nodes to trust. There is a default Unique Node List (trusted nodes) provided by Ripple. But, the UNL is not a list of all validating nodes.
At this time Ripple only controls 39% of nodes on the default UNL. If Ripple Inc turned to dust the XRP network would continue on.
https://minivalist.cinn.app/
No entity, not even Ripple Inc., can freeze XRP or prevent you from sending it. Assets can be frozen by the issuing entity but XRP cannot ever be frozen.
99% of coins are bewilderingly shitty.
IOTA has said you should consider a transaction confirmed if their centrally controlled coordinator has accepted it. So no it's not a cryptocurrency as they should be decentralized.
(This is of course assuming Tether is not an actual fraud, when all the evidence points that way)
There are lots and lots of stories about individuals losing money in bitcoin and tether, this is one way they do it.
Possibly they’re using their fiat dollars to redeem tethers at a discount? (Or to try and enforce the peg)?
Doesn’t Coinmarketcap use exchanges’ self-reported data? What prevents Bitfinex from wash trading at $1?
Only way to obtain USDT is second hand on exchanges.
I dunno if Tether’s ledger is public or not. I would assume it would have to be for anyone to know how many are in existence.
The ledger doesn’t report the dollar price at which Tethers were bought and sold. The ledger could remain intact while Bitfinex falsifiés the prices of trades.
If you want the price, you need to aggregate the USDT trades across all pairs to get the price.
https://blockmodo.com/quotes/USDT
It moves up and down but it largely comes back to a dollar.