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SECURITYWarning: Tether / USDT @ Poloniex / Bitfinex hack (self.ethtrader)

nor_turing が 投稿 - announcement

I just spend some time researching Tether. For those who don't know this crypto is supposed to be pegged to USD, such that 1 tether = 1 USD. This is done by storing a USD amount equal to issued Tether amount on a bank account.

It's hard to find information about the Tether company. I managed to find whom I thought was the current owners. But after checking their linkedin profiles, I found that they are not the owners anymore. Guess who is ... Bitfinex. (see the summary in Reeve Collins profile https://www.linkedin.com/in/reevecollins).

Currently you can't cash out Tether at tether.to. Makes sense now.

This could have very serious implications if Bitfinex ends up bankrupt, depending on the exact ownerstructure.

Currently this information seems unknown to the market since USDT crypto prices at Poloniex are close to USD prices, not factoring in the obvious risk.

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[–]bitcanuck 20ポイント21ポイント  (0子コメント)

Good research. Upvoted.

[–]hodlor 23ポイント24ポイント  (11子コメント)

We need DGX and DAI., we need decentralized exchanges. So many things are almost ready. And Ethereum is making them all happen.

[–]dillon-nyc 2ポイント3ポイント  (2子コメント)

we need decentralized exchanges

We do have etherdelta now.

[–]eze111 1ポイント2ポイント  (0子コメント)

EtherDelta is live and the devs are active here.

[–]twigwam 0ポイント1ポイント  (0子コメント)

One thing a think would be amazing for a decentralized exchange is a CHATBOX (or trollbox as it will eventually become). Reason why is that decentralized exchanges feel so anti-social and barron (perhaps its the low liquidity). Something about centrality makes a user feel as though they are connected with others to the same "mother bee".

Anyway i think a Chatbox in EtherDelta or EtherEx would go a long way in making connections and a vibrant venue.

One caveat there.... MODERATION! This would be tough. Though we are probably on the horizon for decentralized moderation via Ethereum.

[–]WayneNolting 3ポイント4ポイント  (3子コメント)

We have had BitShares decentralized exchange / pegged assets and margin trading / futures for over a year. The problem is volume. People still flock to these exchanges.

[–]hodlor 5ポイント6ポイント  (1子コメント)

What we need is for the decentralized exchanges to be interoperable with each other so that the market depth is not split up.

[–]Ignatius_G_Reilly 1ポイント2ポイント  (0子コメント)

That's too bad, but you have to think about branding, marketing, popularity... Ingress was pretty much Pokemon Go, but it took somebody to slap Pokemon on it for things to really take off. The sad moral of the story is that people don't really care about BitShares. I would say there is probably a branding issue going on here. It takes a lot of talent and luck to get the right mix of factors that makes projects really popular.

[–]kitten888 0ポイント1ポイント  (2子コメント)

What makes a decentralized exchange any different? You trade tokens backed up by the gateways. The funds can be stolen from a gateway.

[–]eze111 0ポイント1ポイント  (0子コメント)

A decentralized exchange would allow traders to participate directly from their account and keep their private keys secure.

But yes, asset backed tokens like USDT would still have the same risks.

[–]hodlor 0ポイント1ポイント  (0子コメント)

There is the potential of a true decentralized exchange handled entirely by smart contract. No gateways.

This will be most useful once we start seeing lots of Ethereum based tokens being traded and dominating the alt coin markets. And I do believe we will see this.

[–]CrystalETH_ 7ポイント8ポイント  (3子コメント)

So shit is about to hit the fan...

[–]nor_turing[S] 5ポイント6ポイント  (2子コメント)

Could be bad for USDT holders, if Bitfinex goes down, and Tether becomes part of their assets. Current reserve balance according to https://wallet.tether.to/transparency is 7.5 million usd.

[–]flyingunicorn222 -1ポイント0ポイント  (0子コメント)

oh man... that su i was thinking about moving some to USDT

[–]cla1067 1ポイント2ポイント  (0子コメント)

In my opinion a business that owns other business is suppose to separate those business to the point that if one goes down it does not have any effect on the other (except maybe PR).

This is why many companies use umbrella companies where their is one company that runs several companies underneath it. This way if their is an issue with a company underneath this one company then it does not effect the others.

Now if they mess up and run business with the company that all the other companies are underneath and get in trouble then that company and all sub companies are in trouble. This is why the main company should not in my opinion conduct business other than owning other companies and should keep things clean as a whistle.

In other words if this is true and they have an effect on Tether.io they really messed up.

[–]ckahr 1ポイント2ポイント  (1子コメント)

just moved all of my eth and btc off of polo because of this.

[–]am6465 0ポイント1ポイント  (0子コメント)

Polo has no business relation to Bitfinix. If what OP is saying is true, then the only risk would be if you owned USDT.

[–]ikilled 1ポイント2ポイント  (1子コメント)

I might found a stronger connection between Bitfinex and Tether:

The Tether White Paper mentions "RenRenBee Limited":

Tether is concluding a principal–agency agreement with RenRenBee Limited (“RenRenBee”). RenRenBee is licensed as a Money Services Operator by the Hong Kong Customs and Excise Department (Licence No. 13­09­01265).

A guy in BitcoinTalk forums mentions same RenRenBee company in [https://bitcointalk.org/index.php?topic=1165622.msg12369341#msg12369341](this topic about Bitfinex):

As you probably know, Bitifinex is operated by a Hong Kong company, Renrenbee Limited, which is in turn owned by a company registered in that hotbed of probity, the British Virgin Islands, iFinex Ltd. Hell would freeze over before you'd get anything out of the BVI system, but Renrenbee Limited is the holder of the licence for Money Services Operation in Hong Kong, number 13-09-01265.

(Don't know where he got this info)

Also this:

Bitfinex operates under a Hong Kong corporation, Renrenbee Limited (holder of the MSO license), which is wholly owned by a BVI corporation, iFinex Ltd. (our holding company).

by user therealjoshrossi

https://np.reddit.com/r/BitcoinMarkets/comments/2dqyng/who_is_bitfinexs_banking_partner/cju1lcy

[–]ikilled 0ポイント1ポイント  (0子コメント)

More:

The Tether White Paper mentions:

Tether Limited currently has accounts with Cathay Bank and Hwatai Bank in Taiwan, both of whom are aware and confident that Tether’s business model is acceptable.

Bitfinex employee said:

What about your banking relationships?

Our primary banking partner, which is in Taiwan, is Cathay United Bank, and they are fully aware of the nature of our business. We have several other banking relationship already established should Cathay become difficult to work with. We are also always looking for other ways to make deposit and withdrawal easier for our customers.

Source: https://np.reddit.com/r/BitcoinMarkets/comments/2dqyng/who_is_bitfinexs_banking_partner/cjtymd1?st=irnxeb53&sh=5cc4dd28

[–]TotesMessenger 0ポイント1ポイント  (0子コメント)

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[–]King_of_Dew 0ポイント1ポイント  (2子コメント)

Does GDAX has the same risks?

[–]solled 0ポイント1ポイント  (0子コメント)

How is this even remotely related to GDAX?

[–]mullonym -3ポイント-2ポイント  (0子コメント)

No. They are an exchange, which does put you at risk. But coinbase is exceptionally secure by my understanding.

[–]Willidungl 0ポイント1ポイント  (0子コメント)

Puh thanks for the info, this does not look good.

[–]madpacket 0ポイント1ポイント  (3子コメント)

Sorry what does this have to do with Poloniex?

[–]Tim01123 0ポイント1ポイント  (2子コメント)

Polo uses tether more than any other exchange.

[–]madpacket 0ポイント1ポイント  (1子コメント)

Thanks, so do you advise pulling out funds from Polo for time being or is this just a small thing given the size of the exchange?

[–]Tim01123 0ポイント1ポイント  (0子コメント)

I wouldn't trust my own advice based on what little information there is, but I sure won't be holding any tether.