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> Tether must have been paid tens of billions in fiat dollars Do they? That's an honest question. They only provide attestations and no audits. And those only

> Tether must have been paid tens of billions in fiat dollars Do they? That's an honest question. They only provide attestations and no audits. And those only showed a lot of Commercial paper. If they sell an exchange $1B for Commercial paper related to that exchange. It costs the exchange a lot less than buying $1B in fiat dollars.

t_mann 4y ago
The way I understand their business model is: you pay $1 into our bank account, and we'll give you 1 USDT on one of a few chains. We'll invest it in low-risk securities, keep the gains, and give you back $1 for the USDT if you come asking. At least that's the theory, I think they've also been doing lending, it's notoriously shady. But still, a lot of people probably paid them real $ for there to be 78bn Tether. Edit: in all likelihood, those CPs don't exist, btw. There was a good article by Bloomberg who tried to track those down.
- Dagonfly 4y ago
  The point I wanted to make is that many (most?) retail customers deposited USD at a CEX like Binance/Bitfinex in exchange for USDT. So your retail fiat dollar didn't go directly to Tether Limited, the exchange bought liquidity from them.
  - t_mann 4y ago
    If the CEXes act in good faith, they'll hold corresponding amounts of USDT in a wallet. So those would have been the parties who paid $ to Tether.
    - Dagonfly 4y ago
      > So those would have been the parties who paid $ to Tether. But not necessarily in fiat USD. They could've paid in any instrument, as long as Tether accepted it. That side of the transaction is, by definition, not recorded on any chain. Or am I misunderstanding the situation?
    - t_mann 4y ago
      Yes, those transactions would be off chain. If Tether accepted other assets then those would be what should show up on their balance sheets or attestations. I think they actually did collateralized lending against crypto assets. But still, they should be sitting on pretty large piles of something, and that's what's so weird, anyone who's looked seriously has found pretty much nothing except for a bit of cash in some island banks.

t_mann 4y ago

The way I understand their business model is: you pay $1 into our bank account, and we'll give you 1 USDT on one of a few chains. We'll invest it in low-risk securities, keep the gains, and give you back $1 for the USDT if you come asking. At least that's the theory, I think they've also been doing lending, it's notoriously shady. But still, a lot of people probably paid them real $ for there to be 78bn Tether. Edit: in all likelihood, those CPs don't exist, btw. There was a good article by Bloomberg who tried to track those down.

Dagonfly 4y ago
The point I wanted to make is that many (most?) retail customers deposited USD at a CEX like Binance/Bitfinex in exchange for USDT. So your retail fiat dollar didn't go directly to Tether Limited, the exchange bought liquidity from them.
- t_mann 4y ago
  If the CEXes act in good faith, they'll hold corresponding amounts of USDT in a wallet. So those would have been the parties who paid $ to Tether.
  - Dagonfly 4y ago
    > So those would have been the parties who paid $ to Tether. But not necessarily in fiat USD. They could've paid in any instrument, as long as Tether accepted it. That side of the transaction is, by definition, not recorded on any chain. Or am I misunderstanding the situation?
  - t_mann 4y ago
    Yes, those transactions would be off chain. If Tether accepted other assets then those would be what should show up on their balance sheets or attestations. I think they actually did collateralized lending against crypto assets. But still, they should be sitting on pretty large piles of something, and that's what's so weird, anyone who's looked seriously has found pretty much nothing except for a bit of cash in some island banks.