re: CFTC sues Voyager for fraud - Every exchange is fraud

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Don't lump me in with the crypto bros. I think crypto is some of the dumbest shite on the planet.

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My apologies

I think a lot of the crypto space does not realize how quickly their exit rails to traditional finance have been choked off. Take a look at Binance these days, they wont even let you deposit or withdraw in USD anymore. In an already complicated process that is just one more step in crazy.

Crypto exchanges need easy access to money for liquidity point of view and that is why stablecoins exist. Primarily stablecoins as 1:1 with the USD. Most of the stablecoins were basically frauds/ponzis, but had banking partners where they could take money and move it around. But once the crash in crypto occurred, and massive stress was put on these stablecoin providers they were forced to wind down their deposits at these banks. Since these banks grew primarily on the crypto boom, they had outsized exposure to this industry, and became reliant on them. Plus a lot of the money is dirty laundered and came from questionable sources. Once the snowball started, they had no choice but to unwind, and close.

Since the primary way of moving around in crypto is viable stablecoins, and these are super shady businesses nobody wants to partner with them to bank now. There is a reason why Tether does not let the average joe cash out, they only work directly with their partners like FTX/Alameda (over 40% of all tethers).

The amount of real money left in the crypto space is bleeding out and primarily being cashed out via Circle (USDC). Which they are now starting to cry foul at the fraud in the space. Tether or TUSD mints a stable out of thin air, washes it through a few exchanges. Buys BTC/ETH, pumps the market easily since there is such low volume. Once the find a retail sucker they sell BTC/ETH and exchange it back for USDC, and cashes it out for real money.

Pretty slick business

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Circle’s Dante Disparte said bank failures in the US earlier this year helped to send investors into “unsafe, opaque” cryptocurrencies overseas, and called for the need for federal legislation around stablecoins, whose value is supposed to stay equal to the dollar. “Candidly, should anyone anywhere be able to counterfeit US dollar using cryptographic methods or should there be a rule-set around competing with digital dollars on the internet where the safety and soundness and monetary policy of the United States is respected?” Disparte, the chief strategy officer at the second-largest stablecoin issuer, said during an interview Tuesday on Bloomberg Television. The amount of Circle’s USD Coin in circulation has plunged to about $26 billion from $45 billion at the beginning of the year. British Virgin Islands-registered Tether, the biggest stablecoin, has grown during the same period.

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Bloomberrg Circle calls for legislation against Tether

What is funny, is most people believe that Circle is not fully backed either. They were definitely short when the crypto banks failed. but FDIC saved them on the back of taxpayer dollars.