[mancerayder]

What grates my nerves isn't primarily Bitfinex/Tether, it's the other exchanges. Why did they accept Tether? Of all the 'altcoins', one backed by an asset like cash is the easiest to verify (or be skeptical of if verification requests are dismissed or ignored). When I signed onto Bittrex, USDT was one of the prominent trading pairs. It was a useful trading pair, because instead of seeing numbers like ".000000314121 : 1 BTC", you'd get a dollar figure you could mentally parse. Of course, the damned software could have done that automatically with a currency of the user's choice. That's kind of a tangent, though. Why weren't the other exchanges more critical of Tether and kept it after months of controversy and skepticism?

[DenisM]

Coin price is determined by (amount of $ chasing coins) / (number of those coins). Tether is effectively inflating the $$ side by pumping USDT into the system and making people believe USD and USDT are virtually the same. As long as the game continues the prices go up, which benefits everyone in the coin scene, hence everyone is playing along.

Also I imagine that major exchanges could get discounts on volume USDT purchases - this would allow them to paper over their own cash shortfalls in exchange for lending legitimacy to the scheme.