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If they are not actually backed by dollar numbers, but with volatile assets (like real estate, stock, metals, or bitcoin, etc.), their holdings are not correct.
by iambvk 7y ago
If they are not actually backed by dollar numbers, but with volatile assets (like real estate, stock, metals, or bitcoin, etc.), their holdings are not correct.
- jfk13 7y agoSome gems from their Legal pages: > Tether Tokens are 100% backed by by Tether’s Reserves. But... > “Reserves” means traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities; and... > Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of securities and other assets held in the Reserves. So even if they agree to redeem your Tether Tokens (which they do not promise to do), you might get some other kind of "security" rather than actual cash. If that happened to be another crypto token, for example, and if you then have trouble exchanging that token for cash (or its value is busy crashing)... well, too bad.