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If there is not sufficient USD to back them then its fraud. People purchased these securities relying on the representations they made about it being backed by
by jdsully 5y ago
If there is not sufficient USD to back them then its fraud. People purchased these securities relying on the representations they made about it being backed by USD.
- jimmydorry 5y agoFraud does not automatically make it a Ponzi, and no custodial service will have sufficient USD on-hand at all times to cover everyone withdrawing their funds. The specific claim that was made by GP, and the claim that I see bandied around, is that Tether is a Ponzi scheme. Tether doesn't appear to share any characteristics with a Ponzi scheme, which is why I am puzzled to see people so adament it is one. The most important characteristic (IMO) is that there is no promise of a return. $100 of Tether will only ever be worth $100 maximum. If anthing, Tether is basically operating as an unregulated bank. You're not calling banks Ponzis are you?
- forgotmyoldname 5y agoYou give your money to X in order to facilitate buying Y. Y is a potential investment opportunity that promises explosive growth. X promises that your money is backed by cash, so there's nothing to lose. People give their money to X and purchase Y. Some people make loads of money and cash out. How exactly is X making a profit when they're just working as an intermediary? Why do they absolutely refuse to show their finances? How exactly are they getting the resources to do all this? Now, am I talking about Ponzi or Tether?