Warnings against Bitconnect, Bitfinex, USDT, and USI Tech - Ponzis

By mrees999 on Thu, Nov 30, 2017 - 3:31am

Of all the exchanges, you can trade crypto - Bitfinex is my least favorite. They were hacked for $60 million in bitcoin from a multi-signature wallet?  That's never been reported possible from anybody else and they never explained how it happened even after two years?  The took a haircut from everybody on the exchange, even those that didn't have bitcoin on the exchange. They have them 'bitfinex' dollars that they advised would be worth enough to make them whole again.  Really this was a bank ‘bail-in’ for the crypto world.


I NEVER recommend people leave their funds on an exchange, to begin with. Hackers steal money every day from banks, but in crypto-  there is no FDIC insurance. There is no undo in crypto. Get a Hard Wallet and be your own bank.


Bitfinex is also tied to the crypto coin ‘USDT” or US Dollar Tether” which is supposedly tied one-for-one for US Dollars just ‘tokenized’ into the blockchain so people can “they think’ be in a safe haven during times of wild swings.  Although the organization only has one bank, that relationship is tenuous and somehow they added to their money supply by hundreds of millions – or double\triple their amount in the last few months – without an audit.  Could they just be ‘printing’ those USDT tokens?


Bitfinex paid off those debts using the USDT tokens and was aided by the bull run in bitcoin which really bailed them out.  A lot of people in the crypto-space think USDT will be one of the next scams to be exposed and possibly a Ponzi scheme.  Bitfinex isn’t allowed to do business with US Citizens and it’s considered shady in the crypto community. If I were to pick an exchange to suddenly implode, it would be bitfinex, and likely related to USDT collapsing.


While we are on the subject, consider staying away from Bitconnect – it’s appears to be Ponzi, as well as and organization USI Tech.  Bitconnect is huge at around 600 million and the cracks are showing. Nobody knows who is at the center but the biggest blowhard pumpers and Youtube are starting to quit so it may be getting close to collapsing.  I feel bad for the people that got suckered in. If these three things happen at once it could take down the price of a lot of coins for a while. But you can’t stop progress, it will be a speed bump. I expect these things will happen in a paradigm shift. People can get too greedy and don’t do their own research. That’s what the scammers count on with any investment class.

Find me on Facebook "Watch My Wallets" for other regular posts about blockchain related news.



davefairtex's picture
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5736
bitfinex commentary

There's a cranky writer over on medium who lays out the whole "bitfinex" situation.  The author puts some meat on the bones of what Mark is saying about the exchange.

He or she has amassed what looks to be some pretty compelling evidence.  If you have a spare hour or two, you can go read the thread and get the sense for yourself.



davefairtex's picture
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5736
bitfinex article: on bloomberg!


Among the many mysteries at the heart of the cryptocurrency market are these: Does $814 million of a digital token known as tether really exist? And what is tether’s connection to Bitfinex, the world’s biggest bitcoin exchange?

"The Shady World of Tether."


mrees999's picture
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 435
Futures exchange shorting = end of bitcoin-related Ponzi schemes

In 2014, the bitcoin exchange MT GOX went bankrupt. Investigations show that it had been hacked and drained of much of the bitcoin it reported on the books. It had in effect become a Ponzi as it utilized new deposits and held up withdraws - using the fast price appreciation in the price of bitcoin to give cover.  

When the price corrected, the withdraws demands couldn't be completed and the fraud was exposed. It took the correction to expose it.

The futures market coming up on December 10, could see institutional money give a massive short on the price of bitcoin. This will likely cause a massive correction in the price. With the massive correction downwards, other shady businesses that might have turned into ponzi-like schemes will likely also be exposed. The Tether (USDT) and the related exchange Bitfinex - could likely be swamped with requests to exit. This will also likely take down Bitconnect - which trades on the price of bitcoin but uses a multi level pyramid scheme for referrals and lending bitcoin long term. 

We could see a magnifying effect with the price drop, and then a cascade of shady businesses with significant reported market share exposed and crumble. This will take out confidence. The sudden drop will likely affect all the altcoins with the weakest ones likely to go belly up. I say good. We need a good forest fire once in a while to clean out the deadwood and let things start fresh with new mature perspective. 

That said, it might be a good time to sell while the getting's good and let it correct. Looks like a perfect storm could hit.



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