[maria2]

It seems like they were ordered to give the plaintiffs the documents, but they weren’t ordered to publicly release them. NYAG also looked into them last year. They were fined but it doesn’t seem like anything else came of it.

> The New York Attorney General’s probe into Tether’s reserves concluded in February 2021 with an $18.5 million settlement.

I don’t hold any tether, and I wouldn’t recommend it to others. But the common opinion that Tether is insolvent might be wrong. Tether, as a stable business, is a money printing machine. I’m not sure it’d be worth risking the business and jail time to pump shitcoins.

[richbell]

> I don’t hold any tether, and I wouldn’t recommend it to others. But the common opinion that Tether is insolvent might be wrong. Tether, as a stable business, is a money printing machine. I’m not sure it’d be worth risking the business and jail time to pump shitcoins

I encourage you to watch Coffeezilla's video about Tether. There's lots of shady stuff going on behind the scenes, like them borrowing $383M from Bitfinex and showing that to an auditor to prove they were solvent (~20:00).

https://youtu.be/-whuXHSL1Pg

[maria2]

Just watched the videos, a few thoughts:

Coffeezilla says that Tether doesn't need to honor your redemption by point to the TOS. The TOS that he shows in the video says that Tether reserves the right to delay the redemption and pay it in-kind securities held by Tether. So if Tether is holding a bond, they reserve the right to give you that bond instead of selling the bond and giving you the proceeds. That's very different than his claim that Tether doesn't need to honor the redemption.

His discussion about whether or not it was transparent that Bitfinex and Tether were owned by the same people. He plays sound clips that sound a little misleading: Phil Potter is prompted with "Tether is Bitfinex, right?" To which Phil Potter responds: "No, it's not." Is that really misleading. If someone asked Elon Musk, Twitter is SpaceX, right? Wouldn't the answer be no, even though they're owned by the same people? All the sound clips are less than 10 seconds longs, so it's really hard to understand everything in context.

The leadership team of Tether does seem a little sketch.

The part about Tether lending Bitfinex money to stay solvent while Bitfinex's money was held by the state pending investigation of their bank was sketchy, but technically the currency would still be backed by the loan, assuming Bitfinex can get their money back, which seems likely given that they weren't a party in the investigation holding up the money.

I think the bottom line is that you have to trust the Tether team to handle the money wisely. Usually, you can't trust people to do that so using Tether is extremely risky. As for the video, I won't say it's wrong, but it certainly picked the least charitable interpretation of events and also cherry-picked sound-bites, which is kind of a misleading tactic to use that helps suit a narrative.

[PeterisP]

Well, FTX, as a stable business, should be a money printing machine - but that definitely wasn't an obstacle for its leaders to risk the business and jail time to speculate with customers' funds.

[HWR_14]

If Tether put all its money into low-yield short term US treasuries, the founders could pay every employee $10MM USD a year and still be paying themselves $1 billion USD a year.

That is a phenomenal amount of risk free income. That's putting the founders somewhere high, probably first 50 names high, on the Forbes 400 list.

That seems foolish to risk to commit crimes.

[CryptoBanker]

Tether wasn’t always that big though.

[HWR_14]

That's even better. Let's say it was a scam for the first 5 years. Total scam, they spent all the money on drugs. It would only take a year for the short-term low-yield US treasury interest on the rest of the assets to completely pay Tether back. That's only possible because Tether has been growing. It would take more than a decade of interest if it had merely doubled in size.

[riffraff]

The strong and risky assumption here is that tether actually received money and put it in some paper.

But what many believe is that tether received crypto from the big exchanges and put it in crypto stuff that yields more crypto, so the billions of circulating tether is not backed by billions of Treasury bills or Chinese real estate: they are for a significant part backed by various tokens which have probably gone to zero since.

[HWR_14]

Ah, that is an entirely different kettle of fish.

So why would people use Tether as opposed to Coinbase's stablecoin?

[maria2]

FTX might have been a money-printing machine, but the situation with Alameda is a lot less clear. Being a market maker is hard. If you make a mistake, you can lose a lot of money. It's probably easier to be a crook.

[rcxdude]

If Tether is solvent and above board then it's being run utterly incompetently. absolutely everything they do regarding their reserves makes them look shady as hell (the most likely situation where they are solvent is that they are solvent with dirty money, which would explain why they are so unwilling to demonstrate exactly where the money is and where it came from).

[onlyrealcuzzo]

The founder posted publicly about printing tether to pump Bitcoin I'm the earlier days of Tether (after previously being convicted of fraud) - and then tried to delete the posts - but couldn't because of Internet Archive...

[twelve40]

I mostly agree and I'm actually amazed at how FTX was doing crazy shit instead of just making exchange money the legal way, but... isn't it super-expensive to truly back up tether with cash? I mean, it's kind of an extraordinary claim that they have a few bil of cash stashed in a mattress just sitting there backing things up 1:1 ready to get withdrawn any second.

[dnadler]

It wouldn’t need to be cash per say, just cash or very liquid and low risk assets like USTs. The yield on treasuries isn’t high, but given the volumes at play it’d generate a lot of cashflow.

[twelve40]

so you think they really have it?