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Here's some more context: Tether was originally setup as RealCoin. It originally had a clear bank account relationship with a Taiwanese bank. It had about $30m
by Jd 9y ago
Here's some more context:
Tether was originally setup as RealCoin. It originally had a clear bank account relationship with a Taiwanese bank. It had about $30mm. Then the bank cut them off.
Since then they've been floating without any announced banking relationship and they also changed their terms of service. Over the same time period they made a partnership with BitFinex and their supposed AUM has gone up over 10x.
No one really knows how much of that corresponds to actual USD or if anyone can actually withdraw. A famous twitter account (https://twitter.com/Bitfinexed https://twitter.com/Bitfinexed) points out every day the ostensible discrepancies between the supposed AUM and public amounts.
I'm generally a huge fan of the goal of Tether (a stable USD backed cryptocurrency), but the proof is in the pudding (i.e the reserves) and your access to it, and both of these are rather questionable.
Full disclosure: I know and am friends with some of the current Tether team and was recruited for RealCoin in the early stages of the project. They are working on a hard problem (asset-backed cryptocurrency on the way that gets the most traction in the market at present, not necessarily the way that inspires the most confidence.
- ActsJuvenile 9y agoTell your friends they should shutdown the company immediately to avoid prison time. Using USD to back any token or digital asset 1:1 is a serious crime as demonstrated by Liberty Reserve.
- chx 9y agoWhat...? Liberty Reserve was a money laundering operation and had nothing to do with 1:1 or whatever. If there's something in the US Criminal Code about that, you need to cite it but I believe there isn't.
- ryanlol 9y agoTether does seem to suffer from exact same problems as LR though, no? It’s structured in a manner that makes it trivial to establish third party exchangers with no KYC processes. There is no KYC for individual Tether users, who only need to generate a bitcoin address to get started. Only time they do KYC is when you want to exchange via Tether website directly, which is no different from what LR did IIRC.
- ActsJuvenile 9y agoYou would have to pay me lawyer's fee to give you the code along with an explanation. In the meantime take my word for it.
- deleted 9y ago[deleted]
- runeks 9y ago> I'm generally a huge fan of the goal of Tether (a stable USD backed cryptocurrency), but the proof is in the pudding (i.e the reserves) and your access to it, and both of these are rather questionable. A “USD-backed cryptocurrency” is a misnomer — it’s just credit. It’s a promissory note saying some issuer will, allegedly, pay you a given USD amount. But unless you believe this claim is 100% certain, it will trade under par, which means it’s no longer backed 1-to-1 (or, at least, the market doesn’t believe it to be in practice).
- billylindeman 9y agoCheck out bitUSD (a stable asset on the bitshares platform). bitUSD is backed by a liquid-market peg and has generally held up fairly well since 2014.