They are trying to audit Tether and its owner Bitfinex: https://news.bitcoin.com/bitfinex-printed-one-third-usdt-receiving-subpoena/ On the day of the subpoena Dec 6th BTC went up 3K. 1/3rd of all tethers were made after this subpoena. They are kind of printing like there is no tomorrow. We shall see if CFTC actually has authority or not and if so they can enforce it....
I think the article miscalculated and it is actually 2/3rd what was printed since Dec 6th. Maybe Bitfinex was worrying that the jig was up and as a last ditched effort they are trying to beat the law enforcement. Another possibility is: the amount Tether printed in December was due to people saving their cash during the market crash. More explanation from the comments: " A Subpoena, is just an "Order to appear" In this case, it is an order for records and most likely the CFO to appear before the Commision (a sudo-court of inquiry), for the purpose of gathering information that directly affects US Citizens interests. There is no trial, this is just a gathering of information. IF there is a finding of impropriety, then the Commision would force a correction if its a minor infraction or if down right illegal, then the DOJ and the FBI will be called in. THAT is when the meltdown would happen." Another one: " I use the Tether to "park" my money when things go down, then reinvest when I think it has bottomed. I would think most others do the same. At the same time, I do not have an account at Tether itself, so consequently my USDT would not have any actual dollars backing them up. That means I just created a Tether token not using USD, but rather from BTC or some ALT coin. Then later those same Tethers get put back into the market when I think it is down, which then pushes the market back up, without ever using a Tether that was backed by any actual dollar bill. Multiply this same scenario by millions of others who have done the same, and guess what..... you have created Tethers without USD backing and now you have that extra 2.2 billion they are talking about."
Ahh, sounds like a duces tecum subpoena if they also want records. I used to serve those to peeps in my PI job. Deponents would get so testy when I explained it was just for submitting records to the court, no personal appearance required.
Here is a philosophical argument from tether: Since tether existed before BTC futures, they could say, if you thought investing in BTC was dangerous, why did you start futures? You can not come here and try to regulate something that existed before you. It is like interfering with their business. Or let's use an analogy. Let's say the Albanian government establishes Pokemon card futures. Pokemon cards have been in existence for 10+ years, and been traded internationally all over the world. What gives the Albanian government suddenly authority over Pokemon cards and their trading, just because they started a future exchange? Well, the answer is, muscle, I guess...
One of the "problems" about about cryptos.... is that at any time the Feds can say, "we're going to regulate, yadayadayada"... If that hurts crypto owners/players, might be tough luck for the crypto market in general.
I think there's more to this story. I agree, if I manipulate the underlying or allow it to be manipulated and trade futures based on that manipulation they can and should prosecute me for breaking the futures laws. But they have no authority of the underlying absent my participation in the futures they regulate. I could go manipulate live cattle spot markets all day if I don't participate in futures markets and the CFTC wouldn't have any jurisdiction over that, for example. I'm guessing that they suspect individuals of breaking the futures law by manipulating the underlying, and are just subpoenaing documents to prosecute them for that, not the bitcoin spot exchanges or even the spot trading except to the extent it was used to manipulate futures.
Yeah but what law and whose law? I think Bitfinex is incorporated in Kong Kong, why should they care about US law? Now the Justice Department usually says, anytime when US citizens' interest was violated they or the FBI has the authority to prosecute, but that is kind of world police BS. Unfortunately they do have the resources and muscle to make it happen. See grabbing Nav from London for the flash crash. Or trying to extradite Kim Dotcom from New Zealand.
Again, if those entities or people never do business in the U.S. they can safely disregard U.S. laws. The jurisdictional standard isn't "was a U.S. citizens interest violated", it's did you violate a U.S. law in the U.S. Running an internet operation that allows U.S. citizens in the U.S. to access and use it counts as operating in the U.S. Certainly smart well meaning people can argue if that's valid or not, however I can come up with at least one compelling example for why it should. For example, I'd say if you're selling child pornography to U.S. citizens from Thailand on an english language website with servers in Canada with U.S. customers that you can and should be subject to prosecution in the U.S., subject to you either voluntarily coming to the U.S. or Thailand agreeing to extradite you. I purposely use that extreme example because it's pretty uncomfortable to defend someone selling child porn, but the legal questions are the same as any other offense to a U.S. law that happens in a similar manner. On the other hand, murdering a U.S. citizen in Thailand wouldn't subject you to U.S. jurisdiction, even though that would certainly be violating a U.S. citizen's interest!
Interesting analogy... so does that mean any exchange can start a product ( futures, say cash settled to keep it simple) on anything else in the world without paying some fee to use the underlying! so can SGX start a futures contract on West Texas crude oil! or Mexican exchange start a Futures contract on some index from Asia!