5th September 2023 > > Tether, Bitfinex, and HK.
tl;dr
There are some rather inexperienced children who work in the crypto industry. China is forging a path of crypto domination. The West needs to worry, and worry today, though that sort of deadline doesn’t suit the bureaucratic, technocratic, mindset that dominates the political landscape in the West today.
Market Snap
Market Wrap
Leveraged shorts getting over their skis amidst a general aversion to risk assets.
Occasional Series – The SNP
First Minister for Scotland, Humza Yousaf, has announced that those working for the Scottish government (probably almost entirely all jobs outside of the Highlands and Islands are government jobs) will be given an extra day’s holiday every single week. Yep, every week. Another holiday.
In entirely unrelated news, Yousaf was previously looking at an electoral wipeout that would consign the SNP to a mere historical irrelevance.
If I was allowed to vote, I would vote for Scottish independence.
Occasional Series – The price of money
Curious Cryptos’ Commentary – This is how another shoe drops
Tether, issuer of USDT the largest stablecoin, and the third largest crypto with a market cap of $83 billion dollars, has come in for some criticism over the years by the CCC. The lack of detail about assets, and even more importantly its liabilities, have long been a bone of contention for the CCC team.
Slowly, but surely, and clearly in response to the pressure applied by the CCC, Tether has been cleaning up its act. Still, holding $1.6 billion of BTC on its balance sheet is frankly damningly stupid, even if it comes from reserves. Correlation risk can hurt you in ways you have never even imagined.
But this stupidity is nothing compared to Bitfinex, a centralised cryptocurrency exchange.
All CEXs must hold a variety of cryptos in cold wallets to support the deposits made by their clients. Bitfinex – a private company whose accounts are not available to read in any meaningful way – have admitted they keep part of their balance sheet assets in BTC.
Please see the comment above that “Correlation risk can hurt you in ways you have never even imagined.”
I have never used Bitfinex. On hearing this news, I will never use them. If you have crypto assets at Bitfinex, move them (preferably to a Ledger Nano) today.
In fact, do it now.
…
But you want to know the twist? The icing on the cake? The patent lack of responsible adults in the room?
Tether and Bitfinex are part of the same company.
The children are back in charge again.
Curious Cryptos’ Commentary – Hong Kong
The next company expecting regulatory approval in Hong Kong is centralised cryptocurrency exchange OKX, formerly OkeX, the latter a name I preferred, but maybe it wasn’t millennial enough.
I’ve used OkeX a few times. Selling SBTC, a bit of DOGE trading, a very poorly timed KISHU investment, selling ETHW hard fork, but that’s mostly it. My experience has been sound overall.
OkeX is expecting a VASP (virtual asset service provider) license from the Hong Kong regulatory authorities (which as we all know means that dictator Xi and his murderous henchmen approve) in early 2024.
The US and the UK need to get a wriggle on if they want to stem the flow of tax dollars to elsewhere in the world.
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