This mentions the Celsius loan without mentioning that it was overcollateralized and liquidated with no loss to tether (confirmed by tether at the time and by Celsius's lawyers in court filings).
As noted in the article, they announced that the loan was liquidated at a date where the difference in BTC price between when the loan was emitted and the loan was liquidated was greated than the overcollateralization ratio.
As expected, no source on the date, just making up nonsense.
If you'd look at the documents filed in the Celsius bankruptcy, you'd see a sworn affidavit that says Celsius stopped providing additional collateral in May 2022:
>In May and June 2022, Celsius made the difficult decision to forgo providing one of its lenders, Tether, issuer of USDT, a stablecoin, additional collateral and agreed to an orderly liquidation of its loan. During the market crash, Tether issued a margin call to Celsius with regard to an outstanding $841 million USDT loan. Although Celsius had always provided sufficient collateral to support its loan, and had never previously been liquidated by Tether, the Company agreed to an orderly liquidation and settlement of its loan with Tether to preserve the remaining collateral in excess of the value of the loan
Bitcoin dropped around 30% in May-June, so this timeline lines up exactly with the 130% collateralization ratio.
I can give you exact dates, I just didn't bother to look it up. You can see it in this address [1] which is a Celsius-owned payment rail between tether treasury and Celsius trading addresses.
The exact transactions start here [2] (aug 11, 2021). I got the date wrong in my previous post because I didn't remember and was too lazy to check.
As for your misreading of legal documents and misunderstanding of how loans are written:
The loan was not written in May 2022 -- it was written prior to October 2021, when its existence was confirmed. The loan is denominated in BTC at the price at which it was underwritten (early August 2021, BTC price low-mid $40k)
The fact that BTC dropped 30% in may-june 2022 has no relation to the total loan value from Celsius' side. It only changes the amount of collateral tether would be margin calling Celsius for.
Celsius faced a margin call in May 2022 (price 30k) because the loan was written around a BTC value around 30% higher than that (~40k). Note the math checks out here as well.
It took over a month for the margin call to result in liquidation, hence tether's loss of $250-300m at a price of $21k. If tether immediately liquidated in May 2022, they would have skated by without a loss.
It doesn't matter the price when the loan was originated, because as the affidavit says, Celsius had provided additional capital. When you have an overcollateralized loan, as soon as it goes below the required threshold a capital call goes out, and you liquidate if that's not met. You don't wait until it's at bankruptcy to issue a call.
>“If bitcoin drops, they give us a margin call [and then] we have to give them more bitcoin,” Mashinsky told the FT in October. He said the loans were typically 30 per cent overcollateralised.
The price of bitcoin has since dropped by about half to $30,000. The person familiar with the matter said Celsius had indeed posted more collateral as a result of the falling price.
Sure, maybe everyone's lying, including in sworn declarations. Alex has obviously lied a lot leading up to the Celsius bankruptcy, so I'm not going to say that anything he says must be true. But I don't see any particular reason to doubt the claims here that tether's loan was overcollateralized, called, and liquidated with no loss (and in fact they returned excess collateral to Celsius, as per the court document above "preserve the remaining collateral in excess of the value of the loan"). I do think it's unlikely he'd swear to that specific claim under oath if it wasn't true, as he'd have nothing to gain from it?
Sure, Celsius may have topped up collateral in the meantime. But that would imply taking in the loan at a higher initial value. The numbers aren't exact, since we don't know when the loan was signed & negotiated.
The numbers don't need to be exact in any case given the magnitude of the discrepancies.
The core issue is, again, that Celsius stopped providing margin in May 2022 but were liquidated on June 15th.
Tether ate the loss for the difference in price between those two dates. Tether should have liquidated Celsius in May 2022, but didn't.
There's no way the math doesn't check out with tether ending up at a loss.
Similarly for the $190m of Celsius equity Tether bought, which is now worthless in bankruptcy proceedings.
The fact is Tether lost a 9 figure sum on Celsius. The only question is what the X is in a $X00,000,000 figure.
This is again, nonsensical. As I pointed out above, Bitcoin dropped about 30% from May to June. If the loan was overcollateralized by 30% before that 30% drop, then they'd have been able to liquidate without losses.
The equity is a loss, but that's not what I took issue is, which is your evidence free claim that there was a loss on the loan.
> Tornado devs blocked all OFAC addresses from accessing the frontend, which is the only power they had, since the contracts themselves are immutable
Which does nothing in practice. Any AML lawyer would have advised them so. The fact that the service was designed to be incompatible with the law isn’t a get-out-of-jail card.
I read the lawsuit in question. None of the plaintiffs were arrested. Their issue is that OFAC overstepped the bounds of their statutory authority, which none of your arguments address.
I'm also not aware of what US law would have been violated by either
1. Coding and publishing the tornado source code
2. Deploying several instances to the blockchain in 2019.
There's no US prosecutions based on creating or operating tornado. The Dutch one has not charged the person they arrested yet, according to https://www.coindesk.com/policy/2022/08/24/alleged-tornado-d..., so I don't know what unlawful actions they think he's responsible for.
> issue is that OFAC overstepped the bounds of their statutory authority, which none of your arguments address
Plaintiffs' argument relies on Tornado Cash not being "a person, entity, or organization" [1]. The complaint declares OFAC exceeded its statutory authority, but provides no specifics. (The code cited in ¶ 9 [2] gives courts the authority to tell agencies not to do bad things. That isn't an argument for or against OFAC's specific actions in this case.)
In summary, it's a hope-and-a-prayer complaint. Maybe someone at OFAC fucked up the paperwork, thereby giving rise to some modicum of relief.
> What would you say about Signal, designed to be incompatible with the law around lawful subpoenas?
It’s not. Subpoenas require handing over what you have. If you don’t have it there is no obligation to disclose. Signal may run afoul of data-retention laws. But there are no such requirements in America.
I've had issues where every other time I connect my Sony XM5 to Ubuntu 22.04, it decides to use HFP instead of A2DP which has significantly worse audio quality for music. I need to reset Bluetooth to fix it. None of the solutions online for disabling this "helpful" feature work.
This was quite an annoyance for me too. I discovered/noticed two things, but I'm on Manjaro, so YMMV:
Whether A2DP or HFP is used can be controlled by changing the profile (or whatever it's called) of the audio device, in the audio settings. Take a look in the settings where you can change volume per app and all that good stuff, and try to see if there's some dropdown that lets you pick between Headset and Headphone, and all that.
Second thing: The actual default behaviour seems to be to use the profile that was used last time. But for me, whenever MS Teams is running, it decides that the correct thing is to switch it to Headset mode, because Microsoft knows what you want better than you do, and you want the option that produces shitty sound quality, but bidirectional audio.
>For Tenev to actually receive the full compensation, Robinhood stock would need to trade up to $300 per share over the next seven years, the company said in the filing.
It closed today at $9.23, so it's a fair guess that he's not getting anywhere near 800M value.
Very easy to do on FTX or aave for basically as much size as you'd like. Yes, it costs 4-5% a year to short. If it blows up in the next few years you'd make a killing though.
Why do you think that? They treat USDT as any other coin, has no special status in the system. FTX is very well capitalized. Can you show me even napkin math that shows FTX going under if USDT blows up in a realistic scenario? (Going from $1 to $0 instantly isn't realistic.)
Why isn't going from $1 to $0 not realistic? Tether is completely centralized and has the ability to prevent token transfers on all major networks it operates on. They regularly add to their blacklist, much more often than other stablecoins. Were it seized by the DOJ, they could simply freeze all transfers subject to proof of AML/KYC and source of funds analysis. That would nuke the market for them immediately.
I believe FTX has some 10+ billion USDT on hand. That'll put a serious hole in their balance sheet. Not to mention whatever would happen to their futures insurance fund when the collateral evaporates. I'm trying to find my source for their balance sheet size, will follow up.
It's not realistic instantly. Even Madoff's victims got a recovery eventually. From OP we know at least 25% of tether's reserves is in a bank in cash. If it was seized I could see the market heading to 50-75c or so, there will be lots of people that want to gamble on an eventual recovery.
I'm very skeptical that FTX has 10B USDT on the balance sheet. OP here says Sam has billions of tether, which makes sense but is not enough to blow them up, and is likely in Alameda being as he says it's for trading, not in FTX.
(Of course it's possible that FTX has 10B in USDT deposits, but that belongs to their customers who would be very sad if it nuked but doesn't directly hurt FTX.)
Futures insurance fund may be an issue, yes, especially in scenarios where it shifts very rapidly. If you have math on a plausible scenario and total losses across the major markets I'd be interested in seeing it. But you'd have to be looking at several billion in losses or at over 1B directly attributable to FTX for them to go bust - they've raised over a billion and make 350M/year per recent Forbes article, so that's a lot of capital.
Also don't understand what moving the market means in this context. The market is at 1:1 for USDT/USD, if there's selling pressure that would lead USDT to trade under $1, the only way to manipulate that is to buy lots of USDT from everyone who wants to sell, which tends to support the peg. Not even sure why that's called manipulation. If there's a real panic and tether turns off withdrawals there's no way anyone has the money to buy everything up at peg.
FTX in particular has standard coin/USD pairs and also USDT pairs. No reason that USDT collapsing would cause FTX to go bust. Alameda and other market makers might lose a ton if they didn't see it coming.
This just isn't really the case any longer. Crypto has matured a lot in the last few years. And if you're still regurgitating the same FUD from 2016 you're in for a big surprise.
FTX has received nearly 30% of the $48,000,000,000 in tethers that have been "minted" in the last year. You are telling me if tether fails they aren't going to be affected?
That belongs to their customers who will lose a lot if tether fails. Unclear why it would cause FTX directly to lose money - main mechanism is if insurance fund isn't enough to cover liquidations if the price shifts very rapidly but that still doesn't seem enough to blow through their significant capital.
> And if you're still regurgitating the same FUD from 2016 you're in for a big surprise.
I’ve just given up on crypto at this point. I’m a big proponent in “invest in things you can understand”, and crypto is a space where very little people really understand what’s going.
You can call that FUD if you want, but not acknowledging that crypto is a wild, wild west with a lot of shady corners, will set you up for a big reckoning at some point.
> I’m a big proponent in “invest in things you can understand”
How many people understand the US banking system? What a bank is allowed to do with your $, how inter-bank payments are settled; how a bank secures its records; under what circumstances a bank might lose its records; what recourse you have in the case that your bank loses your records or makes what you believe is a mistake… yet everyone gives money to their bank.
2012 Bitcoin was great: it takes all of an hour to understand the entire protocol, the act of building/installing bitcoind shows you the entire surface area, and everyone interacting with it understood as much about it as you did. Contrasted to the substantially more opaque banking system, where most people don’t understand it, but trust it due to the test of time.
2021 crypto is indeed different. Now it’s approaching similar complexity to the existing banking system. But do I still understand it better than banking? For the low-level abstractions: BTC, ETH, etc: absolutely — especially so now that we’ve seen them fork and understand the hypotheticals there better. Higher-layer social protocols like NFTs… maybe not. So I stay away from those. Crypto gives you optionality that existing digital investments completely fail at. So that’s nice from your “invest only in what you understand” perspective, right?
There happens to be a lot of opportunity now, and lots of ponzis / scams / bubbles / etc. You're right that understanding it is needed, I've done deep dives on many projects and am doing quite well overall. Not for the faint of heart.
You can also do this and go long ETH/BTC if you'd prefer.
The same ability is spinning up for sushiswap as well if you don't want have any exposure to other assets blowing up and threatening the collateral you care about.
Doing this on aave would actually be net profitable right now with the "liquidity incentives" they offer, and you can apply leverage (deposit USDC, borrow USDT, swap for USDC, deposit again, ...). The rates aren't fixed, so you'd have to watch it, but it would be an interesting strategy.
