[guildenstern]

Bitfinex isn’t a company that ignored some AML requirements and they’re not a company just using Tether. They’re the company responsible for tether, they are the creators of Tether. Tether is hugely fraudulent, it’s foundation is fraudulent, they haven’t just avoided some regulations. There’s no way that Coinbase or any other legitimate institution would open themselves up to being responsible for that.

[MichaelGG]

Who has Tether defrauded? I agree Tether may have just issued without backing, but they don't promise being able to withdraw. So who is actually being harmed? And why is it unfixable? What if Coinbase promised to completely cover any usdt shortfall?

[askmike]

I think the criticism from the regulators has to do with the fact that you cannot create something representing a dollar without approval from regulators and without requiring anyone to do KYC - effectively circumventing all KYC/AML systems in place in the traditional financial system.