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> The likely fraudulent business model would be printing USDT that aren't backed by USD, purchasing cryptocurrencies with it, and then pumping up the value of t
by paulgb 8y ago
> The likely fraudulent business model would be printing USDT that aren't backed by USD, purchasing cryptocurrencies with it, and then pumping up the value of that cryptocurrency to realize gains.
If Tether prints, say, $100M USDT, and buys Bitcoin with it, they'll move the market up. But then when they cash out their gains, they'll move the market down.
It's still a profitable business model, because they can get ~100M (minus market impact costs) for basically nothing, but the money isn't from manipulating the market, it's from printing $100M USDT from nothing.
- jaaames 8y agoThey had a relationship with Bitfinex, so they could easily convert to other shit coins and dump those to avoid tanking the BTC price when they dumped it.
- ceejayoz 8y ago> If Tether prints, say, $100M USDT, and buys Bitcoin with it, they'll move the market up. But then when they cash out their gains, they'll move the market down. The hysteria generated by Bitcoin's skyrocketing price likely allowed them to cash out quietly without crashing the market. Now that the excitement has worn off, that's no longer true, and hey, look... they're suddenly not printing USDT so much.
- maxerickson 8y agoIf you create a $100 million dollar lie and convert it to $5 million real dollars, in the end you have...$5 million real dollars. So someone could run a pretty big grift without crashing a market.