{"id":41404,"date":"2019-05-06T02:36:08","date_gmt":"2019-05-06T00:36:08","guid":{"rendered":"https:\/\/ethereumworldnews.com\/?p=41404"},"modified":"2020-02-19T01:18:34","modified_gmt":"2020-02-18T23:18:34","slug":"bitcoin-manipulation-binance-bitfinex-tether-and-that-1-1-million-btc","status":"publish","type":"post","link":"https:\/\/ethereumworldnews.com\/bitcoin-manipulation-binance-bitfinex-tether-and-that-1-1-million-btc\/","title":{"rendered":"Bitcoin Manipulation, Binance, Bitfinex, Tether, And That 1.1 Million BTC"},"content":{"rendered":"\n

Bitcoin could still yet break $6,000 as momentum holds, but charges of manipulation and calls for Binance to delist<\/a> Tether, the 1.1 million bitcoin at the centre of a long-running Florida court case and a New York State injunction<\/a> threatening to cripple the operations of Bitfinex, are converging to provide market participants with plenty to chew on, if not choke over. At the centre of the angst is the British Virgin Islands registered Bitfinex exchange and the stablecoin operated by its sister company Tether.<\/p>\n\n\n\n

Such is the dominance of the Tether (USDT) stablecoin despite its many competitors, the vortex its woes have set in motion threatens to suck other major crypto players into the storm.<\/p>\n\n\n\n

Ordinary crypto folks are not amused. <\/p>\n\n\n\n

Investors and traders have had to suffer the fun and games from Tether for a while now, from its byzantine corporate structure and relationships, its failure to audit its accounts, to its lack of transparency on issuance and dollar backing. Patience is wearing thin.<\/p>\n\n\n\n

Losing patience with Tether so why doesn\u2019t Binance delist?<\/h2>\n\n\n\n

Are we at a tipping point? There is a rising clamour, as\nevidenced on Reddit and Twitter, for Tether to be removed from exchange trading\npairs. <\/p>\n\n\n\n

That in turn has been greeted with incredulousness bordering on fear from those who beg to differ regarding the stablecoin’s suitability for its task, given the mounting doubts. <\/p>\n\n\n\n

They naturally remind critics of the pivotal role of the currency and the destabilising implications a rapid draining of USDT liquidity from the market would have.<\/p>\n\n\n\n

The ire of those clamouring for action is beginning to focus\non Binance.<\/p>\n\n\n\n

It will be recalled that Binance was relatively quick to\nmake the unprecedented decision to remove a major altcoin when Bitcoin SV was unceremoniously\ndumped. The behaviour of Craig Wright was blamed for forcing that decision.<\/p>\n\n\n\n

In response to Binance\u2019s actions, which were led very\npublicly by chief executive Changpeng Zhao (aka CZ), Wright has labelled the\nexchange a \u201cmoney laundering bucketshop\u201d. That\u2019s a serious charge against arguably\nthe world\u2019s largest crypto exchange.<\/p>\n\n\n\n

A post from Chico Crypto<\/a> on YouTube has got people talking. The YouTube channel claimed that the bitcoin price is being manipulated by whales and right up there leading the way is Binance, apparently. <\/p>\n\n\n\n

Whale manipulation doesn\u2019t add up, but Binance is treating Tether differently<\/h2>\n\n\n\n

The excitable reporter claims that the 780 million Tether at the holding address of the funds had moved to a new address in a series of 10 transactions. But this new address now only has 42 million there. The transfer of funds had been previously telegraphed by CZ  \u2013  he announced in advance that a large amount of USDT would be moving to a cold wallet. <\/p>\n\n\n\n

The Chico YouTube story claims that the funds were dispersed in thousands of small transactions. A Reddit poster who goes by the name DontTrustJack<\/a> lauds the \u201csolid research\u201d by the YouTube channel but the truth of the matter seems to be altogether different to that imparted by the video source.<\/p>\n\n\n\n

But before we come to that, why if you are trying to\nmanipulate the price and \u201cdump on retail investors\u201d would you tell everyone\nthat you\u2019re about to shunt hundreds of millions of dollars\u2019 worth of Tether\ninto a cold wallet? <\/p>\n\n\n\n

And why would you then disperse it to \u201cthousands\u201d of addresses\nfor all to see? And why thousands of addresses? Ok so a bot could co-ordinate\ntheir movements and smaller amounts are less suspicious perhaps to offload \u201cto\ncrash the price\u201d, but \u201cwhale manipulation\u201d has usually been assumed to take\nmore manageable forms.<\/p>\n\n\n\n

However, it turns out that the funds were not spread across thousands of exchanges at all but to one, where the Tether still resides \u2013 the sum of 609,616,768.6018903, with the last transaction made on 1 May. Here\u2019s the explorer link<\/a>. <\/p>\n\n\n\n

599 million Tether was moved on 30 April, the day after CZ\u2019s\nannouncement.<\/p>\n\n\n\n

Ok so forget about the Binance bitcoin price manipulation,\nbut there is a more serious point regarding Tether and Binance. If BSV can be kicked\noff the exchange because Wright is deemed to be behaving badly then why not Tether\nfor far greater apparent misbehaviour.<\/p>\n\n\n\n

Surely it is a very big deal that Tether is not backed 100%\nby cash or cash equivalents?<\/p>\n\n\n\n

Craig Wright, Kleiman and the 1.1 million Bitcoin (BTC)<\/h2>\n\n\n\n

And while we are on the question of whales, why is no one\ntalking about the 1.1 million bitcoin at the centre of the Florida court case, in\nwhich the Kleiman estate accuses Wright of effectively relieving Dave Kleiman\nof BTC ownership through an opaque partnership structure and a blind trust whose\nother trustees and beneficiaries are not known. <\/p>\n\n\n\n

Kleiman lawyers are now seeking full discovery of all those\nassociated with the blind trust.<\/p>\n\n\n\n

The lawyers have also successfully demanded that Wright provide\nan exhaustive list of bitcoins owned in 2013 (when Kleiman died) and the data\npertaining to transfer to the blind trust. He has until 15 May to comply.<\/p>\n\n\n\n

Although the Wright haters don\u2019t like to confront the possibility,\nit could turn out that Wright was involved with bitcoin fairly early on, if not\nat the beginning as he claims. Up until now he has told the court that the\nbitcoin records at issue are not available to him because the blind trust has control.\nIf he furnishes the court with proof of ownership then that means there are\ntruly 1.1 million extremely tightly held bitcoins out there.<\/p>\n\n\n\n

Then again, the haters could be right and Wright was not in at ground floor, not even the fifth \u2013 in which case there isn\u2019t a stash of 1.1 million BTC to be unloaded when the court case concludes. <\/p>\n\n\n\n

If that turns out to be the case it would be bullish, as a huge chunk of hitherto assumed \u201cmissing\u201d bitcoin would no longer hang over the market. Less supply, all things being equal, should mean a firmer price going forward.<\/p>\n\n\n\n

Bitfinex, the Paradise Papers, the NYAG and a risky IEO<\/h2>\n\n\n\n

Back with Bitfinex, things are hotting up. As we know, The New York Attorney General (NYAG) accuses Bitfinex of trying to hide its resort to Tether funds to fill a gapping whole in its finances. <\/p>\n\n\n\n

The void in the balance sheet is as a result of payment\nprocessing firm Crypto Capital of Panama refusing to hand over $850 million of Bitfinex\nmoney. The NYAG is seeking an injunction to prevent the extension of further\nloans  from Tether to Bitfinex.<\/p>\n\n\n\n

Bitfinex for its part says the state prosecutors are trying to kill the company and that the previous advance of funds and line of credit from Tether was arranged by an independent third party. <\/p>\n\n\n\n

That’s not very convincing given that the Paradise Papers data leak revealed that Giancarlo Devasini and Philip Potter set up Tether in 2014 . Giancarlo Devasini is the chief executive of Bitfinex.<\/p>\n\n\n\n

However, that third party that was at the centre of the supposed “hands off” loan deal has not been disclosed and the NYAG is understandably seeking more information and is challenging what it claims are \u201cdiscrepancies\u201d in Bitfinex\u2019s account.<\/p>\n\n\n\n

All this is going on while Bitfinex is trying to land its\nInitial Exchange Offering (IEO) of its LEO coin, and pre-orders are reported to\nhave started.<\/p>\n\n\n\n

Bitfinex is looking to raise $1,000 billion and it is\nsurprising to say the least that it is still going ahead.<\/p>\n\n\n\n

The cynics, or realists depending on your point of view, might\nsay it has no choice. <\/p>\n\n\n\n

The Bitfinex\/Tether story is one that never seems to end,\nalthough finality may be arriving sooner rather than later.<\/p>\n\n\n\n

We should hear more from the New York court early week, but\nwhatever the outcome regarding the loan and credit line, investors toying with\ntaking a look at the IEO will need to be very brave. <\/p>\n\n\n\n

And LEO is a utility coin for the exchange and nothing more.\nThere is no claim to any profits that Bitfinex might generate, just cheaper\ntrading fees.<\/p>\n\n\n\n

You get the feeling that Bitfinex could be arriving late to\nthe party with this IEO thing. Binance has already eaten the pie. <\/p>\n\n\n\n

Bitfinex, like the rest of us, clearly noticed that BNB is the\nonly major coin to have reached an all-time high and to have achieved that feat\nin the midst of the dark crypto winter. <\/p>\n\n\n\n

But Binance has a lot more going for it at this juncture\nthan Bitfinex. It has two fiat-to-crypto operations, its Launchpad ICO\nbusiness, its own blockchain and DEX and pole position in the crypto-to-crypto\nexchange world.<\/p>\n\n\n\n

Tron\u2019s Tether swap risk<\/h2>\n\n\n\n

And before the Bitfinex\/Tether vortex is done, let\u2019s mention\nTron. It has sensibly decided to stall indefinitely the start of its reward\nprogramme intended to encourage people to start using its homegrown version of\nTether. <\/p>\n\n\n\n

However, Tron boss Justin Sun is still letting holders of Tether swap it 1:1 for the Tron version. <\/p>\n\n\n\n

That opens Tron up to what you might call Tether default\nrisk. Tether of course isn\u2019t a credit instrument but it is not backed 1:1 by\ndollars. <\/p>\n\n\n\n

In fact a quarter of that value is missing as tether\nadmitted in court to 74% backing not 100%. <\/p>\n\n\n\n

That doesn\u2019t become matter as long the majority of holders\ndo not attempt to redeem. <\/p>\n\n\n\n

But if a stampede happens down the line, and assuming that\nTron gets substantial inflows from Tether holders before then, then the Tron\ntreasury could be left holding an asset of vanishing value.<\/p>\n\n\n\n

All these storm clouds could be dissipated if the market had\na stablecoin it could trust. <\/p>\n\n\n\n

Well, USD Coin (developed by Coinbase and Circle), as\nCoinbase chief Brian Armstrong has reminded us all, is regulated.<\/p>\n\n\n\n

Also, unlike Bitfinex at this juncture, Coinbase and Circle\ncould get their hands on the funds to issue enough collateralised USDC to\nreplace USDT and do the market a big favour.<\/p>\n\n\n\n

Bitfinex is still trading at a substantial premium to the\nprice fiat exchanges, at around $300: on Coinbase BTC is priced at $5,734 while\non Bitfinex BTC sells for $6,053.<\/p>\n","protected":false},"excerpt":{"rendered":"

Bitcoin could still yet break $6,000 as momentum holds, but charges of manipulation and calls for Binance to delist Tether, the 1.1 million bitcoin at the centre of a long-running Florida court case and a New York State injunction threatening to cripple the operations of Bitfinex, are converging to provide market participants with plenty to chew on, if not choke over. At the centre of the angst is the British Virgin Islands registered Bitfinex exchange and the stablecoin operated by […]<\/p>\n","protected":false},"author":17,"featured_media":40434,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[800],"tags":[1119,1233,353,4059,5126,2471],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/41404"}],"collection":[{"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/comments?post=41404"}],"version-history":[{"count":0,"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/41404\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/media\/40434"}],"wp:attachment":[{"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/media?parent=41404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/categories?post=41404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ethereumworldnews.com\/wp-json\/wp\/v2\/tags?post=41404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}