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Tether is more like a money market fund. It has much worse disclosure and much less stringent regulations than money market funds. Money market funds are 100%

• ur-whale 5y ago
  > Money market funds are 100% backed This is a meaningless statement unless they have actual, physical dollar bills stacked in a warehouse backing the fund. And even then, it would be a lie: counter-party risk even applies to physical stacks of dollar bills (they can be stolen).
  • graeme 5y ago
    You misunderstood. I wasn’t saying money market funds are invulnerable. Failure of the Reserve Primary Fund caused the worst of the Great Financial Crisis. I was saying 100% backing is the standard they’re regulated too and they published their backing in a very detailed way that anyone can check. Tether doesn’t do this. They refuse to disclose their counterparties and they defined their own accounting standards where junk debt is valued at redemption value rather than market value