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> They're simply not incentivized to do that. If they did their USDT would actually become worthless. If they said nothing and simply exchanged it to the next
by rcme 4y ago
> They're simply not incentivized to do that. If they did their USDT would actually become worthless. If they said nothing and simply exchanged it to the next fool, they get their money.
If they knew that Tether wasn't honoring redemptions, they could take out a large amount of Tether-denominated loans backed by their own collateral. Then they could go public with their information and profit.
- lazide 4y agoPeople have been screaming about Tether being a scam for almost a decade now and it hasn’t crashed. The market can remain insane longer than you could remain solvent in that case.
- rcme 4y ago> People have been screaming about Tether being a scam for almost a decade now and it hasn’t crashed. In this hypothetical situation, you have information that would apparently "crash the market" if it were to become public, so what happened for the last decade isn't really relevant. Remember, this conversation started talking about Tether redemptions failing to go through and whether or not people would go public with that information. Someone said they wouldn't go public because it would crash the value of their assets, but I was pointing out that you could profit from the crash in value as well.
- lazide 4y agoAs pointed out elsewhere in this thread, the counterparty risk to these shorts makes it nearly impossible to do. And this information has been public for years, including the NYAG evidence which is very damning, but no one seems to actually care - or it’s being propped up successfully regardless. Even in this thread there are folks who refuse to believe things Tether themselves have admitted to under oath and things Tether says in their own TOS now. At this point, even if you had authenticated video of the Tether founders admitting it was all a giant scam, would it change the market behavior? I kind of doubt it. It’ll keep going until it doesn’t, then who knows.
- rcme 4y agoWe're talking about a hypothetical situation where people have attempted to withdraw Tether and failed to do so. And the assertion was that no one would "spill the beans" about Tether's inability to redeem USDT because they'd risk harming their own investment. That would not happen because of what I outlined above. There will be at least one person willing to make a bet on this. It's in the DNA of people who trade. The appeal of exploiting information asymmetry is too great, at least for one of the participants. And all it takes is one person to reveal Tether's inability to pay.
- lazide 4y agoI looked through their site, and couldn’t find any way to even attempt to redeem unless I have $100k. Do you have a way we should be trying?
- tsimionescu 4y agoWhen Tether crashes, the whole crypto market will crash with it. So, unless they convince some crazy bank to give them real money loans for more than the "hundreds of millions of dollars" worth of crypto tokens that would drop to near zero if Tether were exposed, they really can't.
- SilasX 4y agoNo. If you had the power to crash the crypto market, you could still buy puts on LedgerX, which are fully cash secured.
- tsimionescu 4y agoThat's still irrelevant if they can make more money from the crypto market as it is today.
- rcme 4y agoHow is that irrelevant? People who trade want to make money. If you could control crashing the market, you could make so much more by crashing the market than you could otherwise.