BREAKDOWN: The Most Conservative Regulator in America Just Settled Its Case Against Tether – Can We Move On Now?
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 23 February 2021
⏱️ 16 minutes
🧾️ Download transcript
Summary
The case showed Tether and Bitfinex’s track record of misleading statements and dubious practices, but gave no credence to claims that tethers were printed to manipulate markets.
This episode is sponsored by Nexo.io.
On today’s episode, NLW breaks down the final settlement of the New York Attorney General’s case against Tether. He argues that the outcome is extremely positive for the industry, discussing:
- Why Tether risk became a major source of FUD in 2021
- How conspiracy theories overtook legitimate concerns
- The history of the NYAG’s case against Tether
- Specific findings of the NYAG’s case around two times that Tether was not backed 1-to-1 by U.S. dollars held in Tether bank accounts
- Why there was never any accusation of Tether printing USDT out of thin air to manipulate markets
- The specifics of the settlement
- Why this conclusion clears risk from institutional investors
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Transcript
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| 0:00.0 | You have, on the one hand, clear articulation of specific issues and general malpractice |
| 0:05.8 | on the part of Tether and Bitfinex. You simultaneously have no accusation that USDT was printed |
| 0:12.4 | out of thin air to manipulate prices. And finally, as a cherry on top, we get quarterly disclosures |
| 0:19.5 | of the reserve asset backing for at least the next two years. |
| 0:23.8 | This is a win for the industry. |
| 0:27.6 | Welcome back to The Breakdown with me, NLW. |
| 0:31.8 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:38.5 | The breakdown is sponsored by nexo.io and produced and distributed by CoinDesk. |
| 0:45.2 | What's going on, guys? It is Tuesday, February 23rd, and today we are talking about the New York |
| 0:52.9 | Attorney General's settlement with Tether. To do this story |
| 0:57.6 | justice, we have to put it in the context of 2021's FUD cycle. I've described a couple |
| 1:04.4 | times on this show the concept of a wall of worry. A wall of worry refers to a set of fud or a specific concern that people have to push |
| 1:14.7 | through before they can allow the market to fully take hold. I've said a couple of times that I see |
| 1:20.0 | a few different fuds competing to be this cycle's wall of worry. There's a little bit of |
| 1:25.4 | resurgent boiling the oceans, environmental concerns, particularly |
| 1:28.8 | post-Elon. There's the government shutdown concern, which seems a little bit relevant in the context |
| 1:34.3 | of things going on in India and Nigeria. And then there's tether. Now, I've done fudge shows with |
| 1:40.4 | Dan Held and Travis Kling to discuss all of these different concerns, what might be legitimate, |
| 1:46.6 | what the proper critiques are. With Travis in particular, I went deep on a different way to think |
| 1:51.7 | about these risks. Basically, his argument is that you should be adjusting return profiles for |
| 1:57.8 | that risk, but not throwing the baby out with the bathwater because of it. |
| 2:01.9 | Travis's primary frustration with the critiques we've seen over the last few weeks is that they've |
... |
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