A Testament of Hope -
The Essential Writings and Speeches of Martin Luther King, Jr.
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Friday, 26 April 2019
quote [ Yesterday evening, the Office of the Attorney General of New York State announced an absolutely bananas lawsuit against Bitfinex and Tether. Bitfinex is a cryptocurrency exchange, and Tether, “which is owned by the same small group of insiders that own and operate Bitfinex,” is the issuer of a cryptocurrency also called Tether (or USDT). That cryptocurrency is a “stablecoin,” meaning that one Tether is supposed to be worth exactly one U.S. dollar, a ratio that is maintained, Tether claims, by keeping one dollar in a bank account for each Tether that it issues. ]
A "wow, that's bananas!" story even if you aren't into crypto stuff.
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Comments
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mechavolt said @ 10:58pm GMT on 26th Apr
[Score:1 Informative]
tl;dr
Crypto currency exchange keeps US dollars in their bank to back their currency. Payment processing company stops processing payments, leaving $625 million unaccounted for. Exchange transfers $625 million from the exchange bank to their holding company, then transfers $625 from the payment processing account to the exchange to cover the loss. AG is charging that the transfer was fraudulent since the exchange knew the payment processor was not going to honor the transfer. |
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5th Earth said @ 4:06am GMT on 27th Apr
[Score:1 Informative]
Addendum: This all started because the crypto exchange (at least at first) appears to have been doing the best it could to operate honestly, but it couldn't get legitimate banks to handle its finances. So, it had to rely on a shady payment processor instead.
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