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> Can somebody explain, in detail, the conspiracy theory here? For tether to maintain a 1:1 ratio of 1 USDT to 1 USD, they have to have a backing of $450M from
by Shank 9y ago
> Can somebody explain, in detail, the conspiracy theory here?
For tether to maintain a 1:1 ratio of 1 USDT to 1 USD, they have to have a backing of $450M from some company or bank that has USD to give them. As of now, they have no US based banks even doing transfers with them, let alone working with them on being solvent.
Tether promised to be open to auditing, and none of the latest issuings have been audited as having actual backing currency.
- StavrosK 9y agoI'm far from knowledgeable on this, but, as I understand it, for tether to maintain that ratio, the issuer of tether must both be willing to buy and sell one tether for one dollar, to and from anyone, at any time. The moment that stops, you're operating on faith, and you're no longer pegged to anything.
- FireBeyond 9y agoWell, it's a good thing they don't have anything like this in their Terms: > "There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers." Oh, wait, that's exactly what is in their Terms...
- mrb 9y agoTether the company (Tether Limited) claims that non-US exchanges buy tethers directly from them. At least it seems plausible.
- Shank 9y agoI don't think anything says that it isn't plausible. The issue is that $450M appearing with no third party audit in a relatively short time period with no fanfare (e.g., Tether: "We just secured a new deal with a bank and have issued more tethers as a result!") is a bit odd to look at from a normal perspective. If Tether were 10 years old and had established chains of successful audits, this would be less of a big deal (but still a deal).
- FireBeyond 9y agoLet's not forget that they explicitly disclaim that they have any obligation or responsibility to turn the Tethers (that you can't buy, unless of course you're one of the institutional investors supposedly giving them $100MM/day) back into USD at any point in the future.