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Yes, that might be more likely. I was just framing things "at worst". Deltec, the bank that Tether bought, has a desk specializing in zombie debt, so it's enti
by qeternity 5y ago
Yes, that might be more likely. I was just framing things "at worst".
Deltec, the bank that Tether bought, has a desk specializing in zombie debt, so it's entirely possible they have loads of debt bought for pennies on the dollar, that they have through accounting/market shenanigans recognized at par as their "commercial paper".
- ethbr0 5y agoI mean... technically they're completely unregulated, right? So they don't even have to perform shenanigans. They can just buy $1 par debt at $0.01 from Bob's Used Cars and value / declare it at $1. It's a super shady move, and would shake confidence if known, but would seem legally defensible. ("We valued it at a fair price. It turned out we were wrong and overvalued it. Oops.") They could probably declare it at >$1 if they really wanted to, but why do hard fraud instead of easy fraud?
- qeternity 5y agoWell if you take that view, then they don't need the $0.01 paper in the first place. If they are indeed totally unregulated, then they can just commit fraud without risk.
- ethbr0 5y agoThat's where the NY AG's case comes in, I think. They are unregulated, but they're now required to publish a breakdown of their assets. Before, they could have said "We have billions and billions in assets." Now, they're required to enumerate and value their assets, to the extent required to publish the breakdown, as part of a legal agreement. So I guess before it could have been riskless fraud. Now, it's more risky fraud. And overvaluing assets seems like an easy way to keep the wheels turning without obviously pissing off a state AG.