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by Pyxl101 3076 days ago
The fact that Tether does not guarantee in their terms and conditions that they'll exchange Tether back into equivalent reserve currency makes it _super_ sketchy from my point of view.

The only way that Tether should be considered backed by and equivalent to USD (risk-reduced) is if Tether is contractually obligated to convert it back into USD. Instead, this is what their TOS says:

> Tethers are not money and are not monetary instruments. They are also not stored value or currency. There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money.

> We make no representations, warranties, or guarantees to you of any kind, including with respect to any right of redemption or exchange of Tethers for any property.

For more on this, see my previous comment exploring the idea of "Tether being worthless": https://news.ycombinator.com/item?id=15997658

3 comments

What is absolutely amazing is that, since your comment (only 24 days ago), they granted 500.000.000 new USD tethers.
And yet they still can't name their bank, unless under NDA...

Nothing fishy there.

And apparently this bank isn't asking questions about the tens of millions of USD pouring into its account every day, supposedly...

Beginning on January 1, 2018, Tether Tokens will no longer be issued to U.S. Persons.
So basically the only thing you could do with Tether is try and offload it to someone else?

Are all tokens issued as part of ICOs like that?

Yes, and yes

Some ICO's may claim other uses for their tokens but I don't think any are really usable at this point

I'm by no means an expert, but I'm wondering why the people responsible behind Tether do this? Why don't they ask people for a dollar for each Tether coin and then store those dollars indefinitely, wouldn't that guarantee that the currency is pegged? They would always be able to exchange the Tether back to a dollar.
>> Why don't they ask people for a dollar for each Tether coin

AFAICT they cannot bank in dollars at the moment, which is where the origins of the tether currency lie in the first place. They say that theey have the money to back it... but given they minted a quarter billion over the last three days seems a little less than credible.

It turns out to be a lot more profitable if you just make USDT out of thin air...
It also drives the price of BTC up if you use those imaginary USDT to wash trade BTC. This is beyond a shitshow.
> Why don't they ask people for a dollar for each Tether coin and then store those dollars indefinitely, wouldn't that guarantee that the currency is pegged? They would always be able to exchange the Tether back to a dollar.

They could do that, but why would they when they can instead ask people for a dollar for each Tether coin and then spend those dollars on crack and hookers?

Well, someone might do what you describe - or, instead, they might say that they will store those dollars indefinitely but actually spend them. Why should they care about being always able to exchange the Tether back to a dollar, when they can simply take the cash instead?
They don’t have any access to banking.