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related: Tether, biggest stablecoin, cuts its commercial paper holdings to zero(https://www.cnbc.com/2022/10/13/tether-worlds-biggest-stablecoin-cuts-commercial

related: Tether, biggest stablecoin, cuts its commercial paper holdings to zero(https://www.cnbc.com/2022/10/13/tether-worlds-biggest-stablecoin-cuts-commercial-paper-to-zero.html https://www.cnbc.com/2022/10/13/tether-worlds-biggest-stable...) Tether now only holds US treasury assets.

overtonwhy 4y ago
"according to a blog post" they must be trying to get ahead of something pretty bad
flooow 4y ago
My understanding is that Tether have repeatedly refused to allow an audit of their holdings, therefore everyone assumes everything they say is a flat-out lie.
- FireBeyond 4y ago
  They did once say they had an audit done, but would be unable to release it... "because it is in Mandarin." Like what the actual fuck.
  - jrochkind1 4y ago
    Too bad so few on the planet read Mandarin who might be able to understand it, right? Such a rare language...
    - FireBeyond 4y ago
      Some of them may even be able to speak both English and Mandarin! Like some of their employees for but one example…
      - hef19898 4y ago
        And now imagine if those people would do a, hold on, translation of the audit report...
        FireBeyond 4y ago
        Let's not get too creative now! Office Space: What if - and believe me this is a hypothetical - but what if you were able to translate the audit. Would that do anything for you?
  - whimsicalism 4y ago
    Source?
    - FireBeyond 4y ago
      > We are aware of online discussions about Tether’s lack of publicly-available audits. Periodic audits of our bank balances have been performed by the Taiwan-based auditing firm TOPSUN CPAs & Co. The results of those audits were for the benefit of shareholders and were not in a form suitable for public consumption (to begin with, they were in Mandarin). Source: https://cointelegraph.com/news/tether-really-isnt-a-scam-company-promises https://cointelegraph.com/news/tether-really-isnt-a-scam-com... And straight from the horse's mouth: https://tether.to/en/tether-update/ https://tether.to/en/tether-update/ (search 'Auditors')
      - whimsicalism 4y ago
        thanks! for some reason my googlefu wasn't doing the job right.
- btilly 4y ago
  My reasoning is different. They have repeatedly been forced to admit in court that they lied in the past. They have also had reserves invested with a fake bank whose CEO stole money from them and is now convicted in bank fraud. They claimed to be one of the largest holders of specific asset classes, but nobody trading those has any memory of trading them. And so on and so forth. The refusing to allow a real audit is just icing on a cake consisting of a mountain of evidence of fraud. As Matt Levine memorably said, they are "practically quilted out of red flags."
  - bhouston 4y ago
    It seems that Tether will survive - why, because they have so far. Not sure why, but I figure they bluffed their way to solvency?
    - throw_m239339 4y ago
      Yeah, I found Tether resilience incredible indeed, but Madoff and his Ponzi scheme went on for decades too even when JP Morgan figured out it was a scam and still did business with him while informing neither the SEC nor the US government. https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-and-fbi-assistant-director-charge-announce-filing-criminal https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-a... So they must be "backed" by something, we just don't know whom or how, that allows them to keep their scheme running.
      - Darkphibre 4y ago
        Is there a way to "short" Teather? Seems like that'd be the money play.
        wmf 4y ago
        It's possible but it's extremely dangerous. The exchanges that you'd use to short Tether are the ones preventing Tether from collapsing. These exchanges could invent an excuse to liquidate you before they allow Tether to collapse so even if you were right you'd still lose all your money.
ceejayoz 4y ago
Tether claims they cut $30B in commercial paper holdings to zero without any losses, which is simply not credible during these market conditions. It's yet another fantastical claim from an organization that's been repeatedly caught lying.
- onlyrealcuzzo 4y ago
  It's easy to cut their commercial paper holdings to zero! They never had any to begin with! The commercial paper market is small, and everyone in the market pretty much knows everyone else. No one ever noticed a new player - and in the time Tether expanded its balance sheet by $30Bn - there wasn't even enough commercial paper printed if Tether bought it all: https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether https://www.bloomberg.com/news/features/2021-10-07/crypto-my... The easiest way to preserve value in a bear market is to have no value to preserve in the first place [=
  - lamontcg 4y ago
    Yes. The title article literally is all about how Tether was making collateralized loans of Tether to Celsius where the collateral was crypto: > How do we know this? Because we can see Celsius borrowing from Tether. And we now know those loans were collateralized. > We do not know the precise collateral arrangements except that Alex Mashinsky told the FT: > If you give them enough collateral, liquid collateral, bitcoin, ethereum and so on . . . they will mint tether against it It isn't USD, it isn't treasuries, it isn't commercial paper (Chinese or otherwise). At the end of the day it is going to be 90% crypto collaterialized loans that makes up Tether. It is so weird to clearly read an article about the funding mechanism behind Tether and people literally refuse to read it correctly and start yapping about commercial paper.
    - onlyrealcuzzo 4y ago
      How does it work? 1. Celsius calls up Tether and asks for $30Bn to buy Bitcoins. 2. Tether says, sure, prints 30 Bn USDT out of thin air, gives it to Celsius, and Celsius uses that to buy Bitcoins. 3. Celsius collects a bunch of money from retail investors. 4. Celsius steals all the Bitcoins and files for bankruptcy - and, oopsie, the retail investors lose everything. The Celsius insiders obviously get something out of this. They got Bitcoins for nothing. They can and did sell those Bitcoins for the miniscule fiat liquidity that exists for Bitcoin. What does Tether get? They're printing funny money out of thin air. Sure, it doesn't cost them anything. But they have to know that none of that funny money is going to get paid back with real money. So why lend Tethers to someone else, so they can sell Bitcoins for real money - instead of just printing Tethers for themselves to capture all fiat inflows?
deleted 4y ago
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notch656a 4y ago
I'd accept even a burning $100 bill if I knew I was going to spend it before it burns and I thought the next guy thought the same. Thus is tether.

overtonwhy 4y ago

"according to a blog post" they must be trying to get ahead of something pretty bad

flooow 4y ago

My understanding is that Tether have repeatedly refused to allow an audit of their holdings, therefore everyone assumes everything they say is a flat-out lie.

FireBeyond 4y ago
They did once say they had an audit done, but would be unable to release it... "because it is in Mandarin." Like what the actual fuck.
- jrochkind1 4y ago
  Too bad so few on the planet read Mandarin who might be able to understand it, right? Such a rare language...
  - FireBeyond 4y ago
    Some of them may even be able to speak both English and Mandarin! Like some of their employees for but one example…
    - hef19898 4y ago
      And now imagine if those people would do a, hold on, translation of the audit report...
      - FireBeyond 4y ago
        Let's not get too creative now! Office Space: What if - and believe me this is a hypothetical - but what if you were able to translate the audit. Would that do anything for you?
- whimsicalism 4y ago
  Source?
  - FireBeyond 4y ago
    > We are aware of online discussions about Tether’s lack of publicly-available audits. Periodic audits of our bank balances have been performed by the Taiwan-based auditing firm TOPSUN CPAs & Co. The results of those audits were for the benefit of shareholders and were not in a form suitable for public consumption (to begin with, they were in Mandarin). Source: https://cointelegraph.com/news/tether-really-isnt-a-scam-company-promises https://cointelegraph.com/news/tether-really-isnt-a-scam-com... And straight from the horse's mouth: https://tether.to/en/tether-update/ https://tether.to/en/tether-update/ (search 'Auditors')
    - whimsicalism 4y ago
      thanks! for some reason my googlefu wasn't doing the job right.
btilly 4y ago
My reasoning is different. They have repeatedly been forced to admit in court that they lied in the past. They have also had reserves invested with a fake bank whose CEO stole money from them and is now convicted in bank fraud. They claimed to be one of the largest holders of specific asset classes, but nobody trading those has any memory of trading them. And so on and so forth. The refusing to allow a real audit is just icing on a cake consisting of a mountain of evidence of fraud. As Matt Levine memorably said, they are "practically quilted out of red flags."
- bhouston 4y ago
  It seems that Tether will survive - why, because they have so far. Not sure why, but I figure they bluffed their way to solvency?
  - throw_m239339 4y ago
    Yeah, I found Tether resilience incredible indeed, but Madoff and his Ponzi scheme went on for decades too even when JP Morgan figured out it was a scam and still did business with him while informing neither the SEC nor the US government. https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-and-fbi-assistant-director-charge-announce-filing-criminal https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-a... So they must be "backed" by something, we just don't know whom or how, that allows them to keep their scheme running.
    - Darkphibre 4y ago
      Is there a way to "short" Teather? Seems like that'd be the money play.
      - wmf 4y ago
        It's possible but it's extremely dangerous. The exchanges that you'd use to short Tether are the ones preventing Tether from collapsing. These exchanges could invent an excuse to liquidate you before they allow Tether to collapse so even if you were right you'd still lose all your money.

ceejayoz 4y ago

Tether claims they cut $30B in commercial paper holdings to zero without any losses, which is simply not credible during these market conditions. It's yet another fantastical claim from an organization that's been repeatedly caught lying.

onlyrealcuzzo 4y ago
It's easy to cut their commercial paper holdings to zero! They never had any to begin with! The commercial paper market is small, and everyone in the market pretty much knows everyone else. No one ever noticed a new player - and in the time Tether expanded its balance sheet by $30Bn - there wasn't even enough commercial paper printed if Tether bought it all: https://www.bloomberg.com/news/features/2021-10-07/crypto-mystery-where-s-the-69-billion-backing-the-stablecoin-tether https://www.bloomberg.com/news/features/2021-10-07/crypto-my... The easiest way to preserve value in a bear market is to have no value to preserve in the first place [=
- lamontcg 4y ago
  Yes. The title article literally is all about how Tether was making collateralized loans of Tether to Celsius where the collateral was crypto: > How do we know this? Because we can see Celsius borrowing from Tether. And we now know those loans were collateralized. > We do not know the precise collateral arrangements except that Alex Mashinsky told the FT: > If you give them enough collateral, liquid collateral, bitcoin, ethereum and so on . . . they will mint tether against it It isn't USD, it isn't treasuries, it isn't commercial paper (Chinese or otherwise). At the end of the day it is going to be 90% crypto collaterialized loans that makes up Tether. It is so weird to clearly read an article about the funding mechanism behind Tether and people literally refuse to read it correctly and start yapping about commercial paper.
  - onlyrealcuzzo 4y ago
    How does it work? 1. Celsius calls up Tether and asks for $30Bn to buy Bitcoins. 2. Tether says, sure, prints 30 Bn USDT out of thin air, gives it to Celsius, and Celsius uses that to buy Bitcoins. 3. Celsius collects a bunch of money from retail investors. 4. Celsius steals all the Bitcoins and files for bankruptcy - and, oopsie, the retail investors lose everything. The Celsius insiders obviously get something out of this. They got Bitcoins for nothing. They can and did sell those Bitcoins for the miniscule fiat liquidity that exists for Bitcoin. What does Tether get? They're printing funny money out of thin air. Sure, it doesn't cost them anything. But they have to know that none of that funny money is going to get paid back with real money. So why lend Tethers to someone else, so they can sell Bitcoins for real money - instead of just printing Tethers for themselves to capture all fiat inflows?

deleted 4y ago

[deleted]

notch656a 4y ago

I'd accept even a burning $100 bill if I knew I was going to spend it before it burns and I thought the next guy thought the same. Thus is tether.