[jcranmer]

If Tether holds less than $1 in assets for every $1 in liabilities, it's insolvent. Even banks generally hold at least ~$1.15 in assets for every $1 in liabilities.

But in general, Tether is part of what's known as the "shadow banking" industry--something that quacks like a bank but isn't regulated as if it were a bank. And shadow banking has caused the last several financial crises.

[rayiner]

The irony of people treating banking like some big scam someone cleverly invented is how easy it is to accidentally invent a bank.