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>> But banks in the United States normally operate with a reserve requirement of only 10% The banks are legally allowed to do that, Tether wasn't. According t

by mamon 6y ago

>> But banks in the United States normally operate with a reserve requirement of only 10% The banks are legally allowed to do that, Tether wasn't. According to the lawsuit at some point they started declining buying back USDT, due to the lack of real dollars in their bank account. That's clearly a fraud, since they were assuring their customers they have sufficient reserves. Also, the reason they were at some point missing $850M was because that money was seized in various countries as coming from drug cartels. Seems like there's a lot of rope to hang them with.

webinvest 6y ago
There actually isn’t a reserve requirement anymore. That 10% requirement was removed sometime in mid 2020. Frauds that act like a bank or are a bank can last quite a lot longer than most people realize even if their deposits are lent out, collateralized, or lost altogether. You only know who’s swimming naked when the tide rolls out. From what I see, USDT (Tether), is still one of 6 prominent stable coins on Poloniex. Prominent enough to be listed first. If USDT stopped being worth $1 for too long, I’d assume the exchanges would remove it. According to this chart, Tether has done it’s job fine through the ups and downs. https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/
- mamon 6y ago
  The lawsuit I cited suggests that two exchanges were actually complicit in the scam - and Poloniex is one of them. Also, since Tether has its bank accounts in Deltec bank in Bahamas, the inflow of $15B to such a small country would be visible in country's foreign currency balance sheets. The official report from Bahamas government shows that this balance is currently around $60B and has actually decreased during 2020. So this $15B worth of newly issued Tethers are not actually backed by USD (those money never reached Tether bank account), they were printed out of thin air.

by mamon 6y ago

webinvest 6y ago

There actually isn’t a reserve requirement anymore. That 10% requirement was removed sometime in mid 2020. Frauds that act like a bank or are a bank can last quite a lot longer than most people realize even if their deposits are lent out, collateralized, or lost altogether. You only know who’s swimming naked when the tide rolls out. From what I see, USDT (Tether), is still one of 6 prominent stable coins on Poloniex. Prominent enough to be listed first. If USDT stopped being worth $1 for too long, I’d assume the exchanges would remove it. According to this chart, Tether has done it’s job fine through the ups and downs. https://coinmarketcap.com/currencies/tether/ https://coinmarketcap.com/currencies/tether/

mamon 6y ago
The lawsuit I cited suggests that two exchanges were actually complicit in the scam - and Poloniex is one of them. Also, since Tether has its bank accounts in Deltec bank in Bahamas, the inflow of $15B to such a small country would be visible in country's foreign currency balance sheets. The official report from Bahamas government shows that this balance is currently around $60B and has actually decreased during 2020. So this $15B worth of newly issued Tethers are not actually backed by USD (those money never reached Tether bank account), they were printed out of thin air.