[hidenotslide]

I don't think you understood what Sam was saying, being short BTC futures is NOT the same as having a net short exposure to bitcoin prices. And what does Tether have to do with BitMart, an exchange I had never even heard of before this "hack"?

[gadnuk]

They weren't net short by design since they have to stay delta neutral. They were long spot and short futures. However when the liquidations started happening, the futures to spot premium went outta whack.

https://twitter.com/AlamedaTrabucco/status/14672197436901416...

So instead of locking in some spread they target, they ended up benefitting with a much larger profit.

And BitMart has no option to trade in USD. They trade exclusively in USDT. Tether might not have a hand in the hack, but they definitely have a hand in providing liquidity to exchanges which they print out of thin air with no actual 1-to-1 USD backing.

The Tether part was to highlight how this space is rife with scams, both on the shadow banking side and on the exchange side of things.

[hidenotslide]

But how is being delta neutral a scam? If they weren't taking the other side of the long futures trade, someone else would at an even worse price. And if they weren't buying it back lower, someone else would at a worse price.

The idea that Tether just prints out of thin air is a conspiracy theory, I've seen large traders confirm they can do create/redeems and there was some information released about their holdings of commercial paper, settlement with NYAG, etc. And they have frozen stolen funds in the past, in the case of the Poly network hack. USDT routinely trades at a premium to USD, the market does not seem worried.

Of course Binance and Tether and a lot of other unregulated crypto companies are shady, but it's more interesting to focus on the particular shady company in the original post.

[gadnuk]

Tether has regularly been sued and settled, never won.

CFTC: https://www.cftc.gov/PressRoom/PressReleases/8450-21

NYAG: https://www.cnbc.com/2021/02/23/tether-bitfinex-reach-settle...

DOJ: https://www.bloomberg.com/news/articles/2021-07-26/tether-ex...

They have been evading an audit for almost 7 years now. They are required to provide an attestation every 3 months and yet they delayed the last one. Their current attestation raises more questions than answers: https://twitter.com/dee_bosa/status/1466826912781590529

Their attestations have never been independently verified.

Their commercial paper holdings are all murky and they have never provided an actual breakdown. Who knows if they are holding large quantities of commercial paper tied to Chinese real estate?

I mean, for a legit org, they tend to get sued quite a lot (and never win).

An audit for a stablecoin shouldn't really be hard to do.

And no, it's not really a conspiracy theory when there is so much evidence against Tether and Bitfinex. The burden of proof is on them. They can have all the "conspiracy theories" go away with an audit. 7 years. Still waiting. Accusations against Theranos were labeled as conspiracy theories up until 2015. They were until they weren't.

Regards Alameda and being delta neutral, I edited my comment. I never claimed it was a scam. It's just that firms can profit off crashes which may embolden others to take similar positions. The whole space is highly manipulated by big players, its as simple as that.