[RustyRussell]

Yes, the NY investigation was all about this: they patched up the loss and quietly changed their terms to being backed by cash or equivalents.

And they later detailed the $1bn Tether printed for Celcius in return for collateral (once Celcius collapsed and they claimed it was fully repaid).

Understand: for modern banks this kind of fractional behaviour is considered normal. It's only from the weird Bitcoin perspective that full reserve would be a requirement.

[redcobra762]

So in other words, an investigation took place, changes were made, and Tether was allowed to continue to operate?

[RustyRussell]

Yes. The history of authorities protecting users before failure in the cryptocurrency world is fairly empty, however.

TBH I'm not sure if they're allowed to operate in NY though.