news New York Court Approves Investigation Into $10 Billion Cryptocurrency Created By A Presidential Candidate

[kyoukage01 3181]

So someone recently announced that he will become another candidate for the U.S. presidency, and he is a creator of a popular altcoin, no less.

 

But what makes Brock Pierce, the creator of Tether, all the more popular in the eyes of the U.S. financial industry, are the controversies surrounding his creation. And most people behind the industry are not liking it. (More information about Tether can be found in this wiki link.)

 

For one thing, Tether itself has no solid proof of what it claims to be. As stated in the article I gave in the link below, there are already many attempts to audit the altcoin but failed, creating a feeling of uncertainty; that if something in it ever manifested itself in a negative way during Pierce's presidency should he ever get elected, there will be dire consequences.

 

Still another concern is what will happen if Pierce becomes president. Cryptocurrencies will certainly gain a boost to its widespread acceptance in the U.S., but maybe for the Federal Reserve, this can threaten the supremacy of the U.S. dollar, and conflicts may arise which ramifications may not be at a good time for today's global situation.

 

For these, and probably many other reasons, the New York appeals court approved investigation into Tether, apparently Pierce running as president serving as a stimulus for its increased priority. Should the U.S. government uncover any anomalies and act accordingly, this will not bode well for crypto users who have Tether (USDT) in their possession and for Bitfinex as well since they are also included in the investigation.

 

Spoiler

New York Court Approves Investigation Into $10 Billion Cryptocurrency Created By A Presidential Candidate

Michael del Castillo

 

 

A New York appeals court today unleashed the state’s attorney general to investigate a number of businesses behind the tether cryptocurrency. While there are no formal accusations of fraud or other wrongdoing, the opinion, from an appellate division of New York’s Supreme Court, gives teeth to subpoenas filed by the attorney general. The respondents, including both Tether Holdings Limited and the Bitfinex cryptocurrency exchange, had unsuccessfully fought the subpoenas at the trial level, before appealing.

 

The news comes at an awkward time for Brock Pierce, 39, the creator of the cryptocurrency, who this week announced he was running for President of the United States. A representative of the New York State Attorney General says he “cannot confirm or deny that the investigation” includes Pierce.

 

In 2014, Pierce, who is running as an independent on a pro-technology platform, created the tether currency as a way for cryptocurrency investors to quickly enter and exit a position. Unlike bitcoin and other cryptocurrencies, tether was meant to have a stable price, backed one-to-one by real U.S. dollars. But unlike traditional dollars, it can be moved instantly, while actually cashing out a crypto-asset using banks can take days, and many banks won’t support the service at all. 

 

By November 2018 questions about whether or not the cryptocurrency was actually backed dollar-for-dollar started to circulate and a predecessor of the state attorney general of New York, Letitia James, officially began the investigation. After turning up some promising leads however, Tether and Bitfinex filed an appeal resulting in a temporary halt of the investigation.

 

With the opinion order dated today, that investigation can resume. The result of what state attorney general James uncovers could impact any of countless owners of the tether cryptocurrency, with a total market value of $10 billion, and depending on whether or not what is found is good or bad for tether, pave the way for a flock of new, regulated, competitors.

 

“Today's decision validates our office's ability to use its broad and comprehensive investigative powers to protect New Yorkers,” said James in a statement provided to Forbes. “Not even virtual currencies are above the law. We are pleased with the court's decision, and will continue to protect the interests of investors in the marketplace.”

 

Officially, the case involves, BFXNA Inc. and BFXWW Inc., wholly-owned subsidiaries of iFinex, which operates the Bitfinex cryptocurrency exchange, and Tether Holdings Limited the holding company for Tether Limited, Tether Operations Limited, and Tether International Limited. Though Pierce is not mentioned in the opinion, he not only founded Tether in 2014, but is the co-founder of Block.One, behind the 11th largest cryptocurrency, EOS, valued at $900 million, and Blockchain Capital, one of the most influential venture capital firms in crypto.

 

Shortly after James started her investigation into the now-Presidential candidate’s business she issued three subpoenas for information going back to 2015, according to the opinion. During the investigation her team turned up information (not disclosed in the subpoena), that unable to get banking support, the respondents were forced to use a “foreign entity to process customer deposits and withdrawals,” according to the opinion.

 

Specifically, the attorney general previously alleged that Bitfinex had handed over $850 million to third-party payments processor Crypto Capital Corp., based in Panama, to handle customers-withdrawal requests. When the company failed to hold up its end of the bargain the respondents allegedly hid the losses through unspecified machinations, leading some to wonder if they’d simply started printing new tether cryptocurrency without any backing.

 

At around this time, Tether changed the wording on its site to show that instead of every tether being backed by a U.S. dollar, they were “backed by Tether Holding’s “reserves,” which include unspecified currency, “cash equivalents,” and “other assets and receivables from loans made by Tether [Holdings] to third parties,” according to the opinion. In turn, the respondents also successfully managed to get the investigation halted, temporarily though it may have been.

 

Grounds for the stay were rooted in questions surrounding an old New York law called the Martin Act that gives the state unusually broad investigatory powers even if malicious intent isn’t proved and no one was actually injured. In certain cases, the act could give the attorney general the power to investigate as a way to avoid harm.

From the Supreme Court’s opinion, authored by associate justice Ellen Gesmer and concurred by three other justices:

“Respondents argue that tether does not qualify as a security or commodity as those terms are defined in the Martin Act, and that the motion court thus lacked subject matter jurisdiction over them. I disagree.”

A statement from Tether is expected to be published on its site before the end of day.

 

Perhaps counter-intuitively, since the stay was issued in September 2019, tether’s market cap exploded from $4.1 billion to $10 billion today, in spite of the doubts about whether the currency was actually backed by dollars, perhaps giving credibility to Tether’s value proposition. Also over that time though, a newer stablecoin, USDC, co-created by cryptocurrency exchange Coinbase and crypto tech firm Circle, has risen to a market cap of $1 billion today and an even newer competitor, DAI, backed by a wide range of collateral has risen to $190 million. A loss to Tether would almost certainly be a win for the competition, and vice-versa.

 

Of particular interest to Pierce however is another trend that relates directly to his candidacy. Since Covid-19 a number of Congressional bills have called for the creation of a “digital dollar” similar to tether but sanctioned by the Federal Reserve. As James' investigation into Brock’s creation picks up steam, questions about whether or not that’s a conflict of interest will certainly have to be answered.

source: https://www.forbes.com/sites/michaeldelcastillo/2020/07/09/ny-supreme-court-approves-investigation-into-10-billion-cryptocurrency-created-by-a-presidential-candidate/#3f4902e2783b

 

Edited July 13, 2020 by kyoukage01

[BTC Future 3946]

Pierce will never become president, not for reasons of his affiliation with dozens of crypto-related projects, but instead for his past. He won't manage to reach too much publicity but even if he does, the past accusations will resurface. I created a post on another medium that contains a short biography of Brock Pierce (link), I wanted to repost many of my articles on Cryptotalk but I am mostly trying to bring exclusive content as the rules don't allow reposting.

 

Brock Pierce was a co-founder of Tether. Basically, he is what we call an angel investor. He funds startups. The main person behind Tether though is Paolo Ardoino. CEO of both Tether and Bitfinex. Brock Pierce is not the person to blame on Tether. Tether was created in 2014 as "Realcoin" and changed name to Tether in 2015. Since then Brock Pierce disassociated with Tether and according to recent articles, he is also skeptical about the latest developments and how it is being used.

[Moaz 7239]

This is bad news for cryptocurrency users, especially for Tether (USDT) users, but I do not think Brock Pierce one of the founders of a currency Tether (USDT) will become President of the United States, as this is somewhat difficult in my opinion.

[estee369 489]

USDT is already very popular. If they do anything bad about him then may be Tether will suffer for this. But as i know Tether is not founded by one guy. It was created by several people. Not sure i am right or not.

[Syedbesharat 5423]

Last year i have read many articles related to thetr (USDT).where their audit was not cleared they claim they back every USDT with real dollar but mostly their accounts doesn't shows this.So i moved from USDT which can be go any time investigation.As a creater of USDT this candidate can gain lots of support from crypto community but the politics is whole new stage where policies and agenda matter.If this person elected as President then U.S can be more involve in crypto market where they will built new crypto frame for exchanges and assets.Which is good for crypto users but its in future which can be considered possibility.

[Honny143 13612]

@BTC Future I read your article where you post the biography of usdt founder Brock Pierce, its really amazing feeling when I read the pierce biography, because he is multiple talented person I don't no he really do any fraud through usdt coin, but I think he deserves us president in next election, because he is really talented person  it's my personal opinion.

[TimopheyKa 3900]

In General, this usdt is a very good solution, because it is a stable coin that helps you make interesting transactions, and this is cool. I hope that nothing bad will happen to it, and it will show itself very cool!

[Captain Karim 0]

Tether has run into many problems in the past, and this is what makes it go to court immediately when encountering any problem, just to prove that it is not wrong.
And we all know the ups and downs of Tether that happened in the past.

[tienda 8776]

This is the first I heard about this news, I see many comments about members who are afraid about Tether USDT will be affected...etc No nothing of affection, how many bad and fake news about Bitcoin? ufff a lot but never will be affected. In this case if this news is real not a fake news the unique person who will be judged is Brock Pierce. About USDT is very popular now is managed by peoples..etc

[Shaza Ahmad 1682]

No candidate can succeed in the United States, we found in the last election in 2016 how Trump appeared strong in front of his opponents, but because of the big mistakes he made during his rule, it seems that Joe Biden will win this time, but I don't think anyone He might be a candidate to enter the White House.

[SuperCrypto 7193]

However, we note that, contrary to the expected, the market value of the Thether coins increased, and this increases the reliability of the proposed value of the Tether coin. This means that even cryptocurrencies fall under the law.

[kyoukage01 3181]

45 minutes ago, Cryptomint said:

An older post but if a cryptocurrencies supporter will come in presidential moments than definitely the price will be effected.

I don't know how many US voters out there who are also cryptocurrency supporters, but I'd wager that their numbers are insignificant; and the current stimulation of the cryptocurrency market, especially the BTC bullrun, has almost nothing to do with the election.

 

The US election is over. Joe Biden wins the election. And the cryptocurrency community are reported to be optimistic about it.

https://www.forbes.com/sites/billybambrough/2020/11/15/why-joe-biden-could-be-big-for-bitcoin/?sh=59213e6e5f68

Spoiler

Why Joe Biden Could Be Big For Bitcoin

Billy Bambrough

 

Joe Biden, the U.S. President-elect, is preparing to move his administration into the White House and bitcoin supporters are hoping Biden will take a more favourable stance toward crypto than President Donald Trump.

 

Last year, Trump sent shock waves through the world of bitcoin and cryptocurrencies when he tweeted a tirade against bitcoin, sparked by Facebook's plans for its libra cryptocurrency.

 

Now, the bitcoin and cryptocurrency community is eagerly looking forward to Biden's administration—with the bitcoin price already soaring after Biden pulled ahead of Trump in the election.

 

"An encouraging sign for cryptocurrencies came this Tuesday, as the transition team announced that Gary Gensler, who’s shown himself to be crypto-friendly in the past, would lead the financial policy transition team," JP Thieriot, chief executive of California-based bitcoin and cryptocurrency trading platform Uphold, said via email.

 

This week, Gensler, a former chairman of the Commodity Futures Trading Commission and Goldman Sachs GS -0.9% executive who has argued cryptocurrencies have exposed shortcomings in traditional existing payments systems, was appointed to lead the Biden financial policy transition team.

 

"President-Elect Biden’s presidential transition team should prioritize cryptocurrency as an existential national security objective that may set the U.S. financial system on more precise footing," Collin Plume, chief executive of Noble Gold Investments, said via email, adding "digital money policy formulation can and will rest on the new U.S. Treasury secretary and fall into the lap of the IRS."

 

Last year, Gensler wrote that bitcoin's underlying blockchain technology is a "catalyst" for change, arguing "we already live in an age of digital money."

 

"The potential this technology to be a catalyst for change is real," Gensler wrote in an op-ed for bitcoin and crypto industry outlet Coindesk. "I remain intrigued by [bitcoin creator] Satoshi’s innovation’s potential to spur change—either directly or indirectly as a catalyst."

 

Some in the bitcoin and cryptocurrency community see Gensler's appointment as a sign that Biden's administration could bring other crypto-friendly faces onboard.

 

“I think we have opportunity in a Biden administration,” Kristin Smith, executive director of the Blockchain Association," told Fortune. "Because [Gensler] is very familiar with crypto and blockchain and hopefully can put the right team of regulators together that will be more willing to work together to advance policies."

 

Bitcoin has found support among Wall Street giants and a number of high-profile investors this year as a potential inflation hedge, furthering bitcoin's reputation as digital gold amid the economic and financial crisis sparked by the coronavirus pandemic.

 

Bitcoin was also given a credibility boost from payments giant PayPal PYPL , which last month announced it would allow its more than 300 million users to buy and spend bitcoin and a handful of other major cryptocurrencies.

 

"We have crossed the Rubicon in [bitcoin's] adoption," the chief executive of bitcoin and cryptocurrency investor Galaxy Digital Mike Novogratz, who thinks bitcoin and the stock market are set to soar under Biden, reportedly told CNBC this month.

 

"Bitcoin has rallied over 60% in the last two months, largely due to an uncertain economic outlook," said Thieriot, who added the Biden administration's plans "to address the stark digital divide that prevents millions of Americans from accessing high-speed internet" could help introduce people to bitcoin and crypto.

 

"With political discord, coronavirus spikes, a potential stimulus package, and the threat of another lockdown looming over the economy, there’s a chance that many investors will continue seeking out bitcoin and other non-traditional assets until we get a clearer picture of the road ahead."

 

As for Brock Pierce, AFAIK investigations are still ongoing. Any news about the results of the investigation on Tether and the others mentioned here deserves to be discussed in a separate topic. Requesting moderators @ayatoslaw @epidemia to please close/lock this topic of mine, as it can be now considered as old and irrelevant.

 

Thanks to everyone who posted.

 

Edited December 4, 2020 by kyoukage01