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> We don't know if there is enough USD in Tether's coffer to redeem all the withdrawals We can be pretty confident that they don't. If they did they would have

by sumeno 4y ago

> We don't know if there is enough USD in Tether's coffer to redeem all the withdrawals We can be pretty confident that they don't. If they did they would have a third party accounting firm provide an attestation that they did

nl 4y ago
You mean like these ones? https://tether.to/en/transparency/#reports https://tether.to/en/transparency/#reports The most recent was Sep 2022 by BDO. They have a mix of assets (as you'd expect, because they have different liquidity requirements). But the majority is in short term (<45 day) US Treasury Bonds or Cash and Bank deposits. The other largest asset class is money-market funds, which is a pretty well understood asset class.
- sumeno 4y ago
  Weird how they said they were going to release monthly attestations through them and then did exactly one 4 months ago, and then in December BDO said they were going to stop dealing with crypto companies. Oh well, probably nothing!
  - nl 4y ago
    > they were going to release monthly attestations Did they say this? I thought it was quarterly (same as what Circle does with USDC) > in December BDO said they were going to stop dealing with crypto companies. Yeah who would blame them?
- TylerE 4y ago
  What auditor are they on now? When even one’s in the Caymans don’t touch you that says something.
  - nl 4y ago
    Note that an attestation isn't an audit. It's not nothing though - certainly more than FTX had.
- raverbashing 4y ago
  I'm sure FTX looked great on paper before it all blew up
  - nl 4y ago
    I'm not defending them. But I am noting they do have 3rd-party attestations (NOT audits!) which is the same as what Circle does with USDC. FTX used their FTT token to prop up their balance sheet. This attestations says USDT isn't like that.
  - lmm 4y ago
    As a matter of historical fact it didn't. Their balance sheet was an excel sheet with random entries like "fiat@: $8B". (I don't trust any entities in the crypto space, but just for the record)
yreg 4y ago
Can someone explain to me how did they manage to mess it up? Issuing stable coin seems like an easy business on paper. You collect $$$, mint coins, collect interest on those $$$ in a bank and that's your profit. Does everyone become greedy and lose the treasury in gambling instead, or what?
- JumpCrisscross 4y ago
  > stable coin seems like an easy business on paper For one, finding a bank that will hold your money will be tough. They’re taking on significant liability, for the AML officer, personal criminal liability.
  - yreg 4y ago
    Ok, but they could still do some wealth management solution that's practically risk free. With the amount of deposits they don't even need to beat inflation to turn significant profit.
    - JumpCrisscross 4y ago
      > they could still do some wealth management solution that's practically risk free Mechanically, what does this mean? When someone buys Tether from you, to which bank account do you have them wire the money? By the way, your suggestion is a reasonable leap. But it still involves handling U.S. dollars, and now you've added a new regulated area (wealth management). It's easy to imagine the transgressions starting small. Say you have someone ready to wire you $100mm. You don't yet have a bank account, but you're working on it. Do you tell them to pound sand? Or do you temporarily use a side account, to hold the funds until the main one is ready?
      - yreg 4y ago
        How is this issue relevant to keeping vs. losing the treasury funds?
        4y ago

by sumeno 4y ago

nl 4y ago

You mean like these ones? https://tether.to/en/transparency/#reports https://tether.to/en/transparency/#reports The most recent was Sep 2022 by BDO. They have a mix of assets (as you'd expect, because they have different liquidity requirements). But the majority is in short term (<45 day) US Treasury Bonds or Cash and Bank deposits. The other largest asset class is money-market funds, which is a pretty well understood asset class.

sumeno 4y ago
Weird how they said they were going to release monthly attestations through them and then did exactly one 4 months ago, and then in December BDO said they were going to stop dealing with crypto companies. Oh well, probably nothing!
- nl 4y ago
  > they were going to release monthly attestations Did they say this? I thought it was quarterly (same as what Circle does with USDC) > in December BDO said they were going to stop dealing with crypto companies. Yeah who would blame them?
TylerE 4y ago
What auditor are they on now? When even one’s in the Caymans don’t touch you that says something.
- nl 4y ago
  Note that an attestation isn't an audit. It's not nothing though - certainly more than FTX had.
raverbashing 4y ago
I'm sure FTX looked great on paper before it all blew up
- nl 4y ago
  I'm not defending them. But I am noting they do have 3rd-party attestations (NOT audits!) which is the same as what Circle does with USDC. FTX used their FTT token to prop up their balance sheet. This attestations says USDT isn't like that.
- lmm 4y ago
  As a matter of historical fact it didn't. Their balance sheet was an excel sheet with random entries like "fiat@: $8B". (I don't trust any entities in the crypto space, but just for the record)

yreg 4y ago

Can someone explain to me how did they manage to mess it up? Issuing stable coin seems like an easy business on paper. You collect $$$, mint coins, collect interest on those $$$ in a bank and that's your profit. Does everyone become greedy and lose the treasury in gambling instead, or what?

JumpCrisscross 4y ago
> stable coin seems like an easy business on paper For one, finding a bank that will hold your money will be tough. They’re taking on significant liability, for the AML officer, personal criminal liability.
- yreg 4y ago
  Ok, but they could still do some wealth management solution that's practically risk free. With the amount of deposits they don't even need to beat inflation to turn significant profit.
  - JumpCrisscross 4y ago
    > they could still do some wealth management solution that's practically risk free Mechanically, what does this mean? When someone buys Tether from you, to which bank account do you have them wire the money? By the way, your suggestion is a reasonable leap. But it still involves handling U.S. dollars, and now you've added a new regulated area (wealth management). It's easy to imagine the transgressions starting small. Say you have someone ready to wire you $100mm. You don't yet have a bank account, but you're working on it. Do you tell them to pound sand? Or do you temporarily use a side account, to hold the funds until the main one is ready?
    - yreg 4y ago
      How is this issue relevant to keeping vs. losing the treasury funds?
      - 4y ago