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They are not fake, they have all of them. People from the US just can't access them anymore. Tether is the workaround so they can. To add to the excellent summ

They are not fake, they have all of them. People from the US just can't access them anymore. Tether is the workaround so they can. To add to the excellent summary of patio11: The other side of the coin is that more and more exchanges are using Tether (USDT) as the only thing pegged to the FIAT world in any way (value wise), not having to deal with actual dollars and banks makes the legal side of running an exchange a lot easier and cheaper. So a lot of exchanges are supporting USDT for a reason way bigger than simply providing a trading marketplace for them. Think about exchanges like Bittrex and Poloniex, which volume wise are huge and don't offer any real dollars or euros.

Jasper_ 9y ago
Who gave them all that USD? Where are they keeping it? They've been shunned by their US banking partners. They've basically been printing Tethers 50m at a time. The only thing they've released which attempted to show that they actually had the USD was something they called an "audit" which explicitly said "this is not an audit" [0] on the second page. When you go to withdraw from Tethers it basically says "if you don't have more than $50k in claims, go away" [1]. Suffice it to say that most of their customers don't have that. My guess is that Bitfinex, through a combination of wash trading and Tethers, have been pushing up the price of Bitcoin and they've basically been running a Ponzi scheme. [0] https://tether.to/wp-content/uploads/2017/09/Final-Tether-Consulting-Report-9-15-17_Redacted.pdf https://tether.to/wp-content/uploads/2017/09/Final-Tether-Co... -- "This engagement does not comtemplate tests of accounting records or the performance of other procedures performed in an audit or attest engagement" [1] https://cdn-images-1.medium.com/max/800/1*7BOwdYvUycjNFdUB2emLOA.jpeg https://cdn-images-1.medium.com/max/800/1*7BOwdYvUycjNFdUB2e...
- SilasX 9y ago
  I’m still wrapping my bed around the concept of Tethers, but I don’t see [1] as problematic. That’s the same way that ETFs work — they ensure value parity by guaranteeing that you can redeem blocks of them for the corresponding assets. But to ensure the ETF shares aren’t all redeemed this way, they limit it to large blocks of shares. That way, smaller investors can still sell their (smaller blocks of) ETF shares for dollars at par, since any divergence would be an arbitrage opportunity that a bigger trader can exploit. The requirement to redeem in large blocks doesn’t change that logic, and still ensures that the smaller trades happen at par.
  - Jasper_ 9y ago
    I agree it's not problematic by itself, but together with the other allegations (including plenty I haven't listed) and it starts to paint a picture that they do not have USD to back up every single one of their Tethers.
- askmike 9y ago
  > When you go to withdraw from Tethers it basically says "if you don't have more than $50k in claims, go away" [1]. Suffice it to say that most of their customers don't have that. This is not how most people redeem tether, they go to any of a wide range of exchanges (kraken, poloniex, bittrex, etc) and trade whatever amount (from a dollar or whatever the minimum trade amount is).
  - Jasper_ 9y ago
    How does that prove that Tethers has USD to back each USDT? If it's all exchange-based then there's no guarantee of a peg to USD.
    - askmike 9y ago
      I 100% agree with you how risky it is and how hard to prove this is for bfx. It's very dangerous and there is a lot of money on the line (not just the tethers themselves, USDT reaches for and beyond bfx). However I don't think it's obvious that this thing will implode, based on the information we have we can only speculate. Pointing to screenshots about being unable to withtdraw tethers is a red herring and has nothing to do with whether tether will implode.
      - Jasper_ 9y ago
        It's not hard at all. There's a few, very basic things that would change my tone: 1) Let users exchange USDT for USD no matter the denomination or status. If they can't do that, remove the thing that says "You always have 24/7 access to our balance" from the website marketing. 2) Release an official audit (that doesn't say "this is not an audit") 3) Explain the large amounts of Tethers being minted. If they are legitimate, who is pumping $100m into Tethers almost every 3 days? No need to be specific, but records would be nice. 4) Tell us who their banking partners are that are holding the USD. 5) Put their transparency page back up [0]. Bonus points if they actually keep the "Shareholder Equity" number negative in the interest of transparency, or explain why it might have gone negative. [0] Compare: https://archive.is/6os3c https://archive.is/6os3c https://wallet.tether.to/transparency https://wallet.tether.to/transparency The fact that they haven't done any of these heavily imply to me that Bitfinex and Tethers are a sham operation.

Jasper_ 9y ago

Who gave them all that USD? Where are they keeping it? They've been shunned by their US banking partners. They've basically been printing Tethers 50m at a time. The only thing they've released which attempted to show that they actually had the USD was something they called an "audit" which explicitly said "this is not an audit" [0] on the second page. When you go to withdraw from Tethers it basically says "if you don't have more than $50k in claims, go away" [1]. Suffice it to say that most of their customers don't have that. My guess is that Bitfinex, through a combination of wash trading and Tethers, have been pushing up the price of Bitcoin and they've basically been running a Ponzi scheme. [0] https://tether.to/wp-content/uploads/2017/09/Final-Tether-Consulting-Report-9-15-17_Redacted.pdf https://tether.to/wp-content/uploads/2017/09/Final-Tether-Co... -- "This engagement does not comtemplate tests of accounting records or the performance of other procedures performed in an audit or attest engagement" [1] https://cdn-images-1.medium.com/max/800/1*7BOwdYvUycjNFdUB2emLOA.jpeg https://cdn-images-1.medium.com/max/800/1*7BOwdYvUycjNFdUB2e...

SilasX 9y ago
I’m still wrapping my bed around the concept of Tethers, but I don’t see [1] as problematic. That’s the same way that ETFs work — they ensure value parity by guaranteeing that you can redeem blocks of them for the corresponding assets. But to ensure the ETF shares aren’t all redeemed this way, they limit it to large blocks of shares. That way, smaller investors can still sell their (smaller blocks of) ETF shares for dollars at par, since any divergence would be an arbitrage opportunity that a bigger trader can exploit. The requirement to redeem in large blocks doesn’t change that logic, and still ensures that the smaller trades happen at par.
- Jasper_ 9y ago
  I agree it's not problematic by itself, but together with the other allegations (including plenty I haven't listed) and it starts to paint a picture that they do not have USD to back up every single one of their Tethers.
askmike 9y ago
> When you go to withdraw from Tethers it basically says "if you don't have more than $50k in claims, go away" [1]. Suffice it to say that most of their customers don't have that. This is not how most people redeem tether, they go to any of a wide range of exchanges (kraken, poloniex, bittrex, etc) and trade whatever amount (from a dollar or whatever the minimum trade amount is).
- Jasper_ 9y ago
  How does that prove that Tethers has USD to back each USDT? If it's all exchange-based then there's no guarantee of a peg to USD.
  - askmike 9y ago
    I 100% agree with you how risky it is and how hard to prove this is for bfx. It's very dangerous and there is a lot of money on the line (not just the tethers themselves, USDT reaches for and beyond bfx). However I don't think it's obvious that this thing will implode, based on the information we have we can only speculate. Pointing to screenshots about being unable to withtdraw tethers is a red herring and has nothing to do with whether tether will implode.
    - Jasper_ 9y ago
      It's not hard at all. There's a few, very basic things that would change my tone: 1) Let users exchange USDT for USD no matter the denomination or status. If they can't do that, remove the thing that says "You always have 24/7 access to our balance" from the website marketing. 2) Release an official audit (that doesn't say "this is not an audit") 3) Explain the large amounts of Tethers being minted. If they are legitimate, who is pumping $100m into Tethers almost every 3 days? No need to be specific, but records would be nice. 4) Tell us who their banking partners are that are holding the USD. 5) Put their transparency page back up [0]. Bonus points if they actually keep the "Shareholder Equity" number negative in the interest of transparency, or explain why it might have gone negative. [0] Compare: https://archive.is/6os3c https://archive.is/6os3c https://wallet.tether.to/transparency https://wallet.tether.to/transparency The fact that they haven't done any of these heavily imply to me that Bitfinex and Tethers are a sham operation.