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0 pointsJasper_5y ago0 comments

According to Tether's own transparency page [0], there's $30 billion of USD sitting in some random bank, somewhere. No, they haven't told anybody where it is, and they have never released an audit. Yes, they are still delaying the NY Attorney General's investigation [1]. We know that at least $850 million has been seized and lost for good [2]. No, they don't report that on the transparency page.

[0] https://wallet.tether.to/transparency [1] https://mobile.twitter.com/bitcoinlawyer/status/135164200602... [2] https://modernconsensus.com/cryptocurrencies/tether/feds-jus...

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bl5575y ago

Tether is definitely very sketchy in their practices, but there is simply no good evidence that Tether issuance inflates the prices of BTC.

Here is a study arguing the opposite - https://voxeu.org/article/stable-coins-dont-inflate-crypto-m...

Jasper_OP5y ago

I present an alternate argument. First, Tether ToS says that their tokens are useless and nonredeemable, and their service is not available to US residents [0]. Second, the majority of BTC/XYZ trades on major exchanges are for Tether [1]. Third, as a stablecoin, the way it is supposed to work is that when USD is put into reserves, Tether creates USDT. When money is taken out of reserves, Tether will send the USDT to a bogus address to "burn" it. They have only burned a miniscule portion, much less than the $850m that we know has been seized [2]. My guess is that USDT is being pumped into high volume exchanges, and USD is coming out of low volume exchanges, and very little of USDT is backed by reserves.

[0] https://tether.to/legal/

> The right to have Tether Tokens redeemed or issued is a contractual right personal to you. Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of securities and other assets held in the Reserves. Tether makes no representations or warranties about whether Tether Tokens that may be traded on the Site may be traded on the Site at any point in the future, if at all.

> The following Persons are prohibited from depositing to, or withdrawing from, any Digital Tokens Wallet on the Site: > any Person that resides, is located, has a place of business, or conducts business in the State of New York; and > U.S. Persons.

[1] Volume charts and breakdowns are available in lots of places as the data is public, but the easiest chart is halfway down the right side of the page here. "Money flow from/to Bitcoin in the last 24 hours" https://coinlib.io/coin/BTC/Bitcoin

[2] there used to be a site called "omniexplorer" for navigating the Tether chain transactions, but it seems it went down. Now you have to piece it together using tools like blockchair, but it's far more difficult to read to find the coinbase transactions. https://blockchair.com/ethereum/erc-20/token/0xdac17f958d2ee...

birdsbirdsbirds5y ago

By which means are the people paid who organize Tether? If they hand out tether effectively for nothing, who is paying for the infrastructure? If there is no payment, why would one not expect that they intend to run away with those $30 billion one day?

Additionally, if that bank goes bankrupt, the money is not secured.

onlyrealcuzzo5y ago

Is it even legal for any bank to hold tether's money if it is in USDs?

at-fates-hands5y ago

Honest question,

If people are thinking of buying and selling BTC, should they start with another crypto currency until the Tether issue is resolved?

rspeele5y ago

If Bitcoin goes down the altcoins go down too.

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