But Tether is traded on other exchanges outside of their control, this wouldn't work... plus. if they did this, then what people are suspecting is true. They just print tethers willy nilly without proper USD backing.
> if they did this, then what people are suspecting is true.
No, this is what they could do if they were legit.
Issuing and selling a new Tether when it's over $1.00 on an exchange keeps all their promises and lets them make the difference as profit. If they sell the Tether for $1.05, they put a dollar in reserves and the $0.05 is profit.
Same for buying a sub-$1.00 Tether from an exchange. They've taken a Tether out of circulation, which means they can treat the backing USD as theirs again, which means the gap between the $0.98 they paid and the $1.00 value is profit.
All of this requires them to actually have the capital to do so, though, and I'd consider the lack of Tether-issued buy/sell orders at these values to be a hint at the real scenario - they don't have the capital they claim.
No, this is what they could do if they were legit.
Issuing and selling a new Tether when it's over $1.00 on an exchange keeps all their promises and lets them make the difference as profit. If they sell the Tether for $1.05, they put a dollar in reserves and the $0.05 is profit.
Same for buying a sub-$1.00 Tether from an exchange. They've taken a Tether out of circulation, which means they can treat the backing USD as theirs again, which means the gap between the $0.98 they paid and the $1.00 value is profit.
All of this requires them to actually have the capital to do so, though, and I'd consider the lack of Tether-issued buy/sell orders at these values to be a hint at the real scenario - they don't have the capital they claim.