[sdhfjgjh]

If the price is under $1, the backer can purchase the coins with reserves and pocket the difference. The price will only depart from the peg if selling forces the market price down and the backer doesn't have enough reserves to purchase tokens sold beneath the peg. This scenario is similar to a bank run and would require high selling volume to set if off.

The lending rates are determined by a separate mechanism and reflect the probability of a future departure from the peg.

[oillio]

The rumor is the backer is using the reserves to trade crypto. You won't ever see an attack on Teather during a crypto bull run as the reserves will be strong.

In the depths of a crash, the potential is definitely there. Last time Bitfinex bailed out Teather when its reserves came up short. So to really see Teather fail, we probably need a crypto crash and a weakened Bitfinex.

This is why people still use Teather. Even though it is risky, the current market dynamics make a failure unlikely.

IMHO failure due to embezzlement (Teather reserves stolen by an inside man) is a real possibility. The management team has already proven to be very shady...

[tehlike]

Or doj freezing assets...