The Shadow Dollar That's Fueling the Financial Underworld (msn.com) 84
An anonymous reader shares a report: A giant unregulated currency is undermining America's fight against arms dealers, sanctions busters and scammers. Almost as much money flowed through its network last year as through Visa cards. And it has recently minted more profit than BlackRock, with a tiny fraction of the workforce. Its name: tether. The cryptocurrency has grown into an important cog in the global financial system, with as much as $190 billion changing hands daily. In essence, tether is a digital U.S. dollar -- though one privately controlled in the British Virgin Islands by a secretive crew of owners, with its activities largely hidden from governments.
Known as a stablecoin for its 1:1 peg to the dollar, tether gained early use among crypto aficionados. But it has spread deep into the financial underworld, enabling a parallel economy that operates beyond the reach of U.S. law enforcement. Wherever the U.S. government has restricted access to the dollar financial system -- Iran, Venezuela, Russia -- tether thrives as a sort of incognito dollar used to move money across borders. Russian oligarchs and weapons dealers shuttle tether abroad to buy property and pay suppliers for sanctioned goods. Venezuela's sanctioned state oil firm takes payment in tether for cargoes. Drug cartels, fraud rings and terrorist groups such as Hamas use it to launder income.
Yet in dysfunctional economies such as Argentina and Turkey, beset by hyperinflation and a shortage of hard currency, tether is also a lifeline for people who use it for quotidian payments and as a way to protect their savings. Tether is arguably the first successful real-world product to emerge from the cryptocurrency revolution that began over a decade ago. It has made its owners immensely rich. Tether has $120 billion in assets, mostly risk-free U.S. Treasury bills, along with positions in bitcoin and gold. Last year it generated $6.2 billion in profit, outearning BlackRock, the world's largest asset manager, by $700 million.
Known as a stablecoin for its 1:1 peg to the dollar, tether gained early use among crypto aficionados. But it has spread deep into the financial underworld, enabling a parallel economy that operates beyond the reach of U.S. law enforcement. Wherever the U.S. government has restricted access to the dollar financial system -- Iran, Venezuela, Russia -- tether thrives as a sort of incognito dollar used to move money across borders. Russian oligarchs and weapons dealers shuttle tether abroad to buy property and pay suppliers for sanctioned goods. Venezuela's sanctioned state oil firm takes payment in tether for cargoes. Drug cartels, fraud rings and terrorist groups such as Hamas use it to launder income.
Yet in dysfunctional economies such as Argentina and Turkey, beset by hyperinflation and a shortage of hard currency, tether is also a lifeline for people who use it for quotidian payments and as a way to protect their savings. Tether is arguably the first successful real-world product to emerge from the cryptocurrency revolution that began over a decade ago. It has made its owners immensely rich. Tether has $120 billion in assets, mostly risk-free U.S. Treasury bills, along with positions in bitcoin and gold. Last year it generated $6.2 billion in profit, outearning BlackRock, the world's largest asset manager, by $700 million.
Yeah, we're totally (Score:5, Interesting)
But tether is definitely one of those things where the US government is thinking "we could shut this down, but the info is so damn useful......."
And, for anyone who actually thinks that Tether is "untraceable", I've got a bridge to sell you, some Trump crypto for you to invest in, and a Nigerian bank account just begging to be transferred to you.
Re:Yeah, we're totally (Score:5, Interesting)
Pretty much. One thing governments care about is control. Another is money. Controlling money is pretty high on their list...
If it were seen as a problem by the USA, a SEAL team would roll in and remove those in control, and a CIA task force would replace them. Or, this being the British Virgin Islands, perhaps the SAS would do the dirty work, and Special Branch would take over after.
Don't believe that "they" don't know all your secrets. You are just too small for "them" to care.
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It's similar to Telegram. Telegram facilitated this same activity all the time. They weren't really that secure, it was the fact that they flouted overt government intrusion that drew those bad people to the system, but it absolutely could be hacked. However, Telegram is on it's way down now that Pavel Duro
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tracking that and making use of the info. You know how Russia and Iran can't seem to do anything without Uncle Sam somehow knowing about it in advance? What a mystery..... not that Tether is the only source of info, of course.
But tether is definitely one of those things where the US government is thinking "we could shut this down, but the info is so damn useful......."
And, for anyone who actually thinks that Tether is "untraceable", I've got a bridge to sell you, some Trump crypto for you to invest in, and a Nigerian bank account just begging to be transferred to you.
Putting the narrative that drug dealers, criminals, pedos, Russians/Iran/North Korea uses crypto is the first step to banning it.
It's not like its impossible to transfer "money" things other than with crypto. Crypto has its own advantages/disadvantages. If crypto is banned, they will find some thing else to transfer money around.
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Really? (Score:4, Interesting)
Tether is arguably the first successful real-world product to emerge from the cryptocurrency revolution that began over a decade ago.
Russian oligarchs and weapons dealers shuttle tether abroad to buy property and pay suppliers for sanctioned goods. Venezuela's sanctioned state oil firm takes payment in tether for cargoes. Drug cartels, fraud rings and terrorist groups such as Hamas use it to launder income.
I don't understand how crypto people do not see the irony in this. And yes I cribbed parts of the summary, but it doesn't change the fact that it's success is predicated on A) a well managed stable US Dollar, and B) enabling the funding of immoral and unethical human rights abuses. I'm sure the "secretive crew of owners operating from the British Islands" believe they're making the world a better place.
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I'm sure the "secretive crew of owners operating from the British Islands" believe they're making the world a better place.
Hmm. I'm definitely not sure, but I'm less inclined to believe such people need to delude themselves into thinking their heroes, when they could probably satisfy themselves with thinking they're clever, morally neutral at worst, and (most importantly) super rich.
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Don't forget C) the Tether owners actually having enough cash reserves to pay out in US dollars if requested.
And (related) D) it is not a huge scam like with some other crypto bros.
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Can I interest you in 5000 shares in the Brooklyn Bridge? I need to raise funds, so they are priced for quick sale! PM Me!
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Don't forget C) the Tether owners actually having enough cash reserves to pay out in US dollars if requested.
C) what does that have to do with the price of oranges in Sri Lanka? Your point is irrelevant. Cash reserves are irrelevant. It's pegged to the dollar, which means it is de facto dollars. However it moves outside of traditional banking systems, which means it's dollars for illegal goods and services. it doesn't matter if it's a stable coin or it can't implode because there's dollars behind it.
You first claim "cash reserves are irrelevant," then conclude that "it can't implode because there's dollars behind it."
GP is right that it only stays 'pegged' if there's enough reserves to cover all withdrawals. If it turns out that they faked some of those reserves, or if the volume outgrows the reserves, then the value won't stay pegged to the dollar and tether will crash.
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Time to find that "secretive crew of owners" (Score:1, Flamebait)
People who are doing legitimate things, people who are even trying to do legitimate things, don't
Good (Score:1, Troll)
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I cannot tell whether this is satire or utterly deranged.
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I don't perceive that comment as THAT deranged.
There are, of course, certain things that governments have a morally justifiable reason to restrict the trade of: weapons, people (human trafficking) and goods or services that either offer to infringe upon the rights of others (killing or injuring people for hire) or that necessitates the infringing of the rights of others in order to produce or distribute (revenge porn, child sexual exploitation etc.).
These goods & services, while potentially representing
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I don't perceive that comment as THAT deranged.
There are, of course, certain things that governments have a morally justifiable reason to restrict the trade of: weapons, people (human trafficking) and goods or services that either offer to infringe upon the rights of others (killing or injuring people for hire) or that necessitates the infringing of the rights of others in order to produce or distribute (revenge porn, child sexual exploitation etc.).
Step #1: demand irrefutable proof of every suspect activity.
Step #2: go back and actually DO Step #1.
Step #3: NOW you may question why tether was perfectly fine yesterday, and is the worst baby-raping abomination today, according to the competition.. Quite the interesting admittance:
Almost as much money flowed through its network last year as through Visa cards.
Without irrefutable proof, I tend to more see a greedy dominating credit card processor pissed the competition is “stealing” billions from them. Did Visa sponsor this negative press against tether? Ask yourself why
Re: Good (Score:3)
Private untraceable money is the historic norm. There's nothing weird about wanting to use the sort of money humanity has been using for thousands of years.
In fact, I find your viewpoint to be akin to slave mentality.
Pot calling the kettle black (Score:2, Insightful)
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You have citations for that?
What a wonderful world it would be where internet comment sections contained thoughtful discourse supported by facts.
Re: Pot calling the kettle black (Score:2)
Re: Pot calling the kettle black (Score:2)
https://thegivingblock.com/ann... [thegivingblock.com]
How that compares to drugs et al, I'm not sure, but most analysts put illicit use of Bitcoin at about 1% of volume.
You can look up Bitcoin volumes and run the numbers yourself.
Citations (Score:2)
You have citations for that?
DDG is your friend:
Venezuela Crypto Remittances Skyrocket as Migration Crisis Worsens [bloomberg.com]
Venezuela’s Crypto Rebirth: Interview With Enrique De Los Reyes [forbes.com]
Venezuelan Migrants Are Using Bitcoin for Remittances, But There’s a Catch [yahoo.com]
Alexei Navalny back in court, anti-Kremlin movement gets a bitcoin boost [www.cbc.ca]
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Yeah, suuure.
Re:Pot calling the kettle black (Score:5, Insightful)
There's very few legitimate uses of crypto as a currency (rather than as a speculative investment, which isn't possible for stablecoins), simply because most people don't want to deal with the hassle of obtaining cryptocurrency in the first place. They're also typically not the feel-good things like orphanages or helping the disadvantaged, it's usually more along the lines of adult entertainers, marijuana dispensaries, and political activists who go a bit beyond what most of the mainstream finds acceptable.
Re: Pot calling the kettle black (Score:2)
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There's very few legitimate uses of crypto as a currency (rather than as a speculative investment, which isn't possible for stablecoins), simply because most people don't want to deal with the hassle of obtaining cryptocurrency in the first place. They're also typically not the feel-good things like orphanages or helping the disadvantaged, it's usually more along the lines of adult entertainers, marijuana dispensaries, and political activists who go a bit beyond what most of the mainstream finds acceptable.
The only legitimate use of Crypto I've seen is to get around a block the Visa/MC duopoly puts in place. I.E. an American website discussing prostitution in a non-US country where it's legal will often find their cards blocked and accounts frozen because puritans don't like it. Even when the servers are being hosted in say, the Netherlands. So they rely on Bitcoin to pay for the servers because they can't get an EU bank account as they're not EU residents.
This is an edge case I know and it would be far be
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Governments don't care about individual actions. They care about the flow of money.
If a friend gives you $20 nobody cares. If you buy $20 of rice, nobody cares. If Putin gives you and a million of your friends $20 each to buy rice from Maduro... the government sees that Putin gave $20 million to Maduro. That is something they care about. That is why they monitor these networks.
Re: Pot calling the kettle black (Score:2)
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keep using racist tropes
From the bottom of my cast iron heart, shut the fuck up and learn your damn idioms, moron.
https://en.wikipedia.org/wiki/... [wikipedia.org]
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So if someone writes "every drug dealer or illegal arms purchase" without mentioning color, the use of racist tropes pops up in your mind? Do you, perhaps, associate drug dealers with POC yourself?
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For every drug dealer or illegal arms purchase and other questionable stuff, there's many others that get money for their orphanage or to keep an underground free press going
Bullshit.
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such ignorance. No, non-profits and not for profits are registered and audited. they aren't taking crypto either
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no, those charities arent taking crypto.
Re: Pot calling the kettle black (Score:2)
Important cog? (Score:2)
$190 billion makes you a footnote, not a cog.
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That's not what the quote was implying.
The cryptocurrency has grown into an important cog in the global financial system
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"As much as" (weasel words, admittedly) $190 billion daily volume is comparable to the US stock market daily volume.
Which is smallish compared to daily traded US bond volume.
And smaller still when compared to forex trading, but the vast vast majority of forex trading is speculative trading on leveraged currency pairs.
What's an important cog to you?
Just outright admits its criminal purpose. (Score:3)
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Or you want immediate and irreversible transactions, because you don't want to wait for the bank to process the changes over night or maybe even sit on your money for days.
Re:Just outright admits its criminal purpose. (Score:4, Interesting)
Or just some dork who likes the idea, but that kind of mark will be robbed inevitably.
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The list of them is a cute little roll-call of reprobates, with such upstanding global citizens as Cuba, Eritrea, Turkmenistan, Saudi Arabia, Qatar, and a bunch of tax shelter islands.
Re: Just outright admits its criminal purpose. (Score:2)
You're confusing correlation with causation. Poor or single industry economies have difficulties fighting corruption. Corrupt economies have difficulty managing inflation. So poor or single industry economies like to peg to the dollar so that the corruption does less harm to the overall economy.
Also, setting a dollar peg is easy.
Maintaining it takes some real work.
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They just do it so the government ministers and dynasties can serve themselves at the expense of their people in the most pro
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You're an idiot. How convenient to leave out these:
Belize dollar, the Hong Kong dollar, and the United Arab Emirates dirham. All criminal countries eh?
Hardly an anarchist, you clown. I'm a conservative.
What color is the sky in your world?
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Re: Just outright admits its criminal purpose. (Score:2)
What is a crime in one nation may be legal in another.
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Perhaps you should read the summary.
The people who are using Theater: have no dollars
So they neither can pay with it , nor would the receiver be able to hand out change.
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Yeah, and how do they do that?
Go to the next bank and then say: I would like to change some Lira into 100USD, how much is that?
Oh, never mind.
I do not really know what is wrong in your brain.
Every Turk who wants can easy buy 10$ in Tether. Which is probably split into 100 Tether cents or something. Then he can buy 2 eggs, and a pound of flour and 2 tomatoes for 89 Tether cents. Can not be so hard to grasp. ... as soon as there is enough fluctuating and it is confi
And the Turks do not even need to buy Tether
Unworkable (Score:3)
Nobody earning tether. You can't pay taxes with it, buy groceries with it, etc. Its value is dependent on someone, at some point, settling it in another currency.
What it can do is obfuscate a transaction, but even then it can't do it to such a degree that it is impossible to trace.
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You can pay groceries with it.
It is clearly written in the summary, what people, for example in Turkey, are doing with it.
Tether is how you get Fiat money into crypto (Score:1, Interesting)
It's interesting to see an article about this. It might be an outlier but if you start seeing a bunch of these articles it means that the department of Justice is probably gearing up to crack down on cryptocurrency money laundering.
I've said this for years but if they ever seriously do that the cryptocurrency market
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Citation Needed (Score:5, Insightful)
Tether has $120 billion in assets, mostly risk-free U.S. Treasury bills...
Tether has never been audited, why would the author of this story just repeat Tether's sales pitch?
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You're assuming that tether isn't already controlled covertly by government interests.
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Speaking of audits, (cough) BlackRock (cough)..
Govts find these things very useful (Score:3)
I already knew something like this was going on (Score:2)
Cryptocurrency needs to be abolished and banned.
$100,000 minimum (Score:3)
Looking at their website, the is a 100,000 USD "Minimum Tether Token acquisition or redemption amount". That's a significant hunk of change, and it costs "The greater of $1,000 or 0.1%" to make an acquisition or a redemption. Also a fee of $150 USD just to establish an account. So it's a pretty expensive service, and apparently designed to keep you trading the tokens rather than exchange them back and forth for real money.
Meanwhile they get to keep your real money, and probably earn some tidy investment interest on it that you don't get to have. According to Wikipedia, "Tether Limited continues to refuse to allow an independent audit to verify its claims of full backing".
One of the dumbest things I've seen on crypto (Score:2)
The Feds love Bitcoin and Tether. In some ways, they're literally easier to trace than traditional USD transactions. There is no warrant required to surveil them. They can just feed off of the Bitcoin chain and Ethereum for Tether and watch the money flow. If you want to convert them to cash, the only large scale outlets to do that are incorporated entities.
Oh and Tether has a system baked in for deleting USDT from Ethereum wa
A nice article on shadiness of Tether (Score:2)
There's a nice analysis from Dirty Bubble Media outlining why Tether is particularly suspicious compared to other stablecoins: One of these stablecoins is not like the others... A look at the reserves backing the three largest stablecoins in the crypto-conomy [dirtybubblemedia.com]
The article is nearly two years old, to be fair, but I'd be shocked to learn that Tether has managed to completely clean up their act in the meantime. Highly recommend their other articles if you want to take a deep dive into some of the more notable