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Category Archives: Hedge Indices

Hedge Update: On why Hedge and Buchman Indices excluded Tether from all indexation procedures already in December 2017

On why Hedge and Buchman Indices excluded Tether from all indexation procedures already in December 2017 and the implications thereof

Same story, different actors…

Few days ago (after BitConnect was revealed as a Ponzi scheme) we published a blog post detailing our reasoning for the exclusion of BitConnect from our indices, and explain the structure and mechanics thereof. Yesterday news surfaced that Tether and Bitfinex, companies with supposedly overlapping ownership, have been served a subpoena in Dec 2017 by the US derivatives regulator Commodity Futures Trading Commission (CFTC). Thinking ahead, Buchman Indices and Hedge excluded Tether from all indexation procedures on Dec 22. Such assessments and extracurricular Index Committee meetings ensure the integrity and professionalism of all our indices.

Regarding the legality of Tether Ltd. activities, the situation is unambiguous. In the case of Liberty Dollar (United States of America vs. Bernard von Nothaus), it has been established that producing private money resembling domestic of foreign currency in the US is a felony. This carries the important consequence that Tether CANNOT be audited for the fear of legal persecution, regardless if there are actual USD reserves in their bank accounts or not. At the very least, the banks where Tether supposedly holds the US Dollars would lose the correspondent banking connections necessary for USD clearing.

There are serious concerns of market manipulation on Bitfinex with the freshly minted USDT and with no way to independently verify the solvency of Tether Ltd., we will keep it out of the scope of Buchman Crypto Indices unless the situation changes.

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