It is an arbitrage, but not risk-free arbitrage. The current price differential between USDT and USD can be explained two ways. One is that there's an ~8% cha

It is an arbitrage, but not risk-free arbitrage. The current price differential between USDT and USD can be explained two ways. One is that there's an ~8% chance of tether being long-term without value. That seems to be the dominant interpretation among critics of Bitfinex and Tether. The other is that a short-term liquidity crunch is causing investors to take a haircut in order to obtain liquidity in their desired currency. Rumors abound, but except for one tangential announcement from Bitfinex [1], I haven't heard much that is definitive about the current state of fiat deposits/withdrawals on Bitfinex. Currently the price differentials themselves are the strongest signal. [1] https://medium.com/bitfinex/fiat-deposit-update-october-15th-2018-18ddd276c3fd https://medium.com/bitfinex/fiat-deposit-update-october-15th...