It's possible. It's also the second most popular medium of exchange after USD in Argentina. It's popular in a handful of South American & African countries too. I think most transact via the tron blockchain.

It is easy to use, cheap to transact, is pegged to USD, and is very hard for governments to censor. It has a role essentially anywhere with extreme government control over money or hyperinflation of the local currency.

tysker said:

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Yukon Cornelius said:

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Tether is I believe the 15th largest holder of them.

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Tether is a money laundering scheme. I think it's so widely accepted by people in finance and the AML community at this point it almost feels like the product was designed as a honey pot

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How so?

Yukon C said:

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How so?

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Are you asking how it is known, or how tether is being used to launder money?
For the first I'd say use the google machine. For the second, I'm not teaching you how to launder money on behalf of our political enemies using crypto. You're going to have to learn that on your own

MRB10 said:

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It's possible. It's also the second most popular medium of exchange after USD in Argentina. It's popular in a handful of South American & African countries too. I think most transact via the tron blockchain.

It is easy to use, cheap to transact, is pegged to USD, and is very hard for governments to censor. It has a role essentially anywhere with extreme government control over money or hyperinflation of the local currency.

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if you are a Syrian or Lebanese or Iraqi or Sudanese or Ukrainian or any number of countries

you are going to want to have your assets in BTC rather than the local currency for some very good reasons.

imagine if the Jews in Europe had all their assets in Bitcoin in 1936 and could have fled

instead of having to give all their money and assets to the Third Reich?

USDT being a viable medium of exchange doesn't imply BTC is a less good store of value. One can have their savings in BTC but pay for coffee with tether.

There have been articles suggesting that tether is a honeypot since I got into BTC in 2020. There is some good analysis you can find via Google that's pretty compelling.

Grok should be able to summarize it if you want a shortcut.

If it's so widely accepted it's happening explain how it's happening…

Not every jurisdiction has the same CIP/KYC rules and standards as the US.

MRB10 said:

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There have been articles suggesting that tether is a honeypot since I got into BTC in 2020. There is some good analysis you can find via Google that's pretty compelling.

Grok should be able to summarize it if you want a shortcut.

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It's a fraud....just like FTX and thousands of other cryptos. There are good ones with real world applications but for the most part( i.e. 90%) these things are pure speculative garbage.


Obama, Trump and Biden admins completely screwed the pooch on development and implementation of blockchain technology. We could have been the world leaders, but now we are dealing with a market full of **** coins like Hawk Tuah........

If you want to know the truth at this whole market went off the rails, look at what they did to Reggie Middleton and the Veritaseum US and Japan Patents - JP6813477B2, US11196566


The short story......every Defi Token and exchange out there, violates his patent.

Yukon Cornelius said:

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tysker said:

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Yukon Cornelius said:

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Tether is I believe the 15th largest holder of them.

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Tether is a money laundering scheme. I think it's so widely accepted by people in finance and the AML community at this point it almost feels like the product was designed as a honey pot

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How so?

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The people who control tether mint new tether coins, then exchange those new coins for other crypto.

They say tether is backed by dollars, that you can redeem 1 tether for 1 dollar. But there isn't any real transparency what assets back tether or how liquid they are. For all anyone knows they could have zero assets.

If you look at tether supply, there are instances where overnight the supply do tether increases by millions.

It's like tether has its own mint and no one really knows of all tether were redeemed for dollars if the assets actually exist for tether to be redeemed for dollars or if it's just a big fraud.

All of their business and accounts being offshore where there is no way to audit and no transparency. And some of the executives and founders involved had some questionable history.

Ya I get that. Oddly enough they've past more audits the. The DoD. But your point stands. It's sketchy for sure what backs tether. In one instance they buy IS treasuries which is why they are a large holder of it.

But none of that is laundering money which is what I was asking how it is because that's what the other poster said.

been reading tether FUD on this forum since 2017. i'm sure they're going to implode or be taken down any day now.

ac04 said:

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been reading tether FUD on this forum since 2017. i'm sure they're going to implode or be taken down any day now.

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Not sure if we can trust their own audits.

I'd say we just don't know. I think it's a black swan people should be aware of. O wouldn't blindly trust that tether is properly secured and backed by assets. Fraud happens, Enron, FTX, etc.

The idea of a stable coin has merit, but we've seen a major one blow up before and de-peg.

What strikes me as fishy about tether is how the amount in circulation has huge step changes, like they issue a bunch at once, instead of issuing them in exchange for 1 USD as traders demand them.

yeah so many different potential black swans. be careful.

The push for crypto sure seems like a push for a global economic measure. I'll pass.

Buford T. Justice said:

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The push for crypto sure seems like a push for a global economic measure. I'll pass.

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Nah it's just a whale game.... just like everything else before it & everything that will come after it



You can make money off it for sure, just don't get left holding the bag once the whales have moved on to the next thing that all the internet geniuses claim you must have

ac04 said:

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been reading tether FUD on this forum since 2017. i'm sure they're going to implode or be taken down any day now.

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Why would it when government authorities can use it to track illicit activity?

What cases have been brought due to tether use?

You mean other than the probes by the DoJ and NY AG?

Tether is more than happy to assist government agencies to find bad actors that just so happen to be using USDT and tether's network and products over and over again.

As a senior AML compliance officer that works at a firm that is under constant scrutiny from regulators and has direct lines to the SEC, FINRA, and the FBI, I know legal horse trading when I see it.

You said it's a honeypot. So curious which cases have been brought specifically because used tether?

No I did not. I wrote it "feels like the product was designed as a honey pot." I'm not the first person to make the accusation. I suggest you do your own research and come to your own conclusions.

tether holds almost $100B in US treasuries and made more money LY than blackrock. i really hope there's a better talking point tomorrow night.

So there's no evidence it's a honeypot. Just a narrative.

Don't get me wrong there's definitely risks and some sketchy things with tether. But they hold billions of US treasury and that is because of bitcoin. So Bitcoin has strengthened the US in that aspect.


With the right leadership America can cement the US dollar into the digital age via Bitcoin and stable coins and US treasuries.

Bitcoin is not a threat to the US dollars reserve status.
Bitcoin is the US dollars life raft for its reserve status.

Thankfully Trump and his administration and others realize this.

ac04 said:

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tether holds almost $100B in US treasuries and made more money LY than blackrock.

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Seems like you're making my point

ChatGPT:

The claim that Tether (USDT) might function as a "Bitcoin honeypot" is a theory often discussed in the cryptocurrency community. This theory suggests that Tether might be a tool for attracting and monitoring Bitcoin users or even manipulating Bitcoin's price. Here are some arguments often cited in this context:

1. Centralized Issuer in a Decentralized Ecosystem
Argument: Tether is issued by a centralized entity (Tether Limited), which could theoretically be subject to external pressure, regulation, or coercion by governments or other institutions. Bitcoin, by contrast, operates in a decentralized manner, and any dependency on centralized stablecoins like Tether could undermine its ethos and goals.
Implication: Tether might be used as a surveillance tool or a mechanism to gain insight into Bitcoin users' behavior, trading patterns, or holdings.

2. Potential for Market Manipulation
Argument: Critics argue that Tether issuance has been used to pump Bitcoin prices artificially. For example, there have been allegations that Tether is created without sufficient backing and then used to purchase Bitcoin, inflating demand and prices.
Implication: If Tether collapses or is revealed as a tool for manipulation, it could discredit Bitcoin or destabilize the market, potentially benefiting external actors (e.g., governments or competitors to Bitcoin).

3. Lack of Full Transparency
Argument: Tether has faced scrutiny over whether its reserves fully back its issuance. While the company has provided attestations, critics argue that these are not the same as independent audits. This perceived lack of transparency raises suspicions about the true motives or stability of the Tether ecosystem.
Implication: If Tether is a honeypot, the lack of transparency might be a deliberate feature to mask its true purpose and allow it to attract Bitcoin liquidity under a veil of uncertainty.

4. Regulatory Targeting and Legal Scrutiny
Argument: Tether and its sister company, Bitfinex, have faced legal action and investigations from regulators, such as the New York Attorney General's Office. Some argue that regulators might exploit these cases to gather intelligence on Bitcoin users, who often interact with Tether.
Implication: If Tether were a honeypot, regulatory actions could act as a way to destabilize Bitcoin or gather information about its market.

5. Dependency Risk in Bitcoin Ecosystem
Argument: Bitcoin trading pairs heavily rely on Tether across major exchanges, making Tether a critical part of the liquidity ecosystem. If Tether is compromised, it could harm Bitcoin's credibility and utility, benefiting centralized alternatives like central bank digital currencies (CBDCs).
Implication: This dependency might make Bitcoin users vulnerable to any sudden disruptions or revelations about Tether's true nature.

6. Timing of Issuances
Argument: Some researchers have suggested that large issuances of Tether tend to correlate with increases in Bitcoin's price, especially during market downturns. This has fueled speculation that Tether might be used as a mechanism to manipulate Bitcoin's price or gather data on traders' reactions to price movements.
Implication: Such manipulations might be deliberate to lure Bitcoin users or destabilize trust in Bitcoin when the scheme collapses.

7. Strategic Weak Point for Bitcoin
Argument: Critics argue that a large part of Bitcoin's adoption and liquidity depends on exchanges that rely on Tether. If Tether were to fail, Bitcoin could face a significant liquidity crisis, making it easier for governments or other entities to impose regulations or alternatives.
Implication: Tether as a honeypot could serve as a centralized weak point to undermine Bitcoin indirectly.

Counterarguments
1. Market Resilience: Bitcoin has survived past crises, such as the collapse of Mt. Gox and other major exchanges. Even if Tether failed, Bitcoin's decentralized nature and robust community might adapt and survive.
2. No Direct Evidence: While there is circumstantial evidence, no definitive proof exists that Tether is a deliberate honeypot.
3. Audits and Legal Compliance: Tether has made efforts to comply with regulators and provide more transparency, which counters the argument of hidden motives.

The honeypot theory remains speculative and controversial, but it highlights broader concerns about the risks of centralization in a decentralized ecosystem like Bitcoin.

None of that is honeypot though. Just risks of holding tether.

You do know Tether is used to mean both the crypto asset and to collectively reference the two primary holding companies, right?

Yes. I'm not arguing there aren't concerns with tethers business practices or its stability long term or its asset backing etc etc etc. Risks abound. Especially in the crypto space.

However I've not seen evidence that tether is a honeypot. I could be wrong but I haven't seen any cases brought forth due to someone using tether as the means in which they got caught.


I think things like the new IRS rule you have to report gains and losses per wallet indicate they really are lost on tracking so much of the crypto space. So to me it's evidence of the contrary that tether is a honeypot.

I'm just adding discussion fodder. I don't have a strong opinion one way or the other. I've already said it has a role and function regardless.

Here is an example of an actual honey pot by the government in the crypto world.

https://cryptoslate.com/fbis-token-sting-operation-faces-copyright-controversy-over-mit-license-misuse/

You wouldn't see 'evidence' but you'd see fallout. It's not clear the US or any other regulators really have jurisdiction over the BVI or HK holding companies. But they can use USDT as a means to track other actors deemed to be within their legal and physical jurisdictions.

Case in point being something like the SECs recent charges against Cumberland Global

Tracking a public ledger doesn't mean tether was designed as a honeypot. Which was the comment that started this discussion. Whether it is or isn't doesn't really matter as my original point was they are buying a lot of US treasuries.

the mental gymnastics people go through to make sure they don't have to admit to themselves that they ****ed this up are astounding.

ac04 said:

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the mental gymnastics people go through to make sure they don't have to admit to themselves that they ****ed this up are astounding.

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The crazy thing is, they didn't even F it up yet. It's still so early, they could jump in now and prosper, but they're too stupid and stubborn to do it!

ac04 said:

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the mental gymnastics people go through to make sure they don't have to admit to themselves that they ****ed this up are astounding.

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Indeed it's mind boggling how many people who are clearly knowledgeable about crypto are still shilling for ****coins