Good timing, along with the election. Going by history there's the likelihood of a ~20% dip in the BTC price before it takes a couple of big steps up in the last few months of the bull run part of the 4-year cycle.

If it happens, accumulate.

For those doubting that Tether is fully backed, note that Howard Lutnick, CEO of Cantor Fitzgeral, one of the largest investment banks and a public company, has stated that Cantor Fitzgeral manages Tether’s money and indeed the money is all there and invested in US treasury bonds

Both presidential candidates have signaled that they are pro-crypto scams (and one thinks that has something to do with the welfare of black men.) It's too late. Bitcoin has entered the house price zone, where people are elected to office on promises to make housing as expensive as possible. We'll have to wait until crypto brings down the entire economy. And after it does, the people who hold it will be bailed out:

"Do you know how many disadvantaged minorities are invested in crypto? Especially after we allowed them to invest their social security into it, with matching contributions from the state if they agree to hodl? Are you a racist monster?"

Meanwhile 90% of black people will have 90% of their savings in crypto, accounting for less than 2% of all crypto holdings.

FTX so far was barely a speedbump. All it taught politicians is that there's a lot of money in doing what crypto whales say, and absolutely no consequences even if it goes belly up in the worst way.

8:45

So what exactly did the CEO say? Did he attest to tether’s balance sheet? Did he attest to the dollar amount of tether’s assets managed his institution?

What I am getting is that he simply said that he holds some of tether’s assets. Why and how would that make him privy to the entirety of tether’s balance sheet?

The NYAG settlement you keep posting didn’t find that Tether was unbacked or below 1:1. It focused on transparency issues and the fact that funds were not always properly segregated. There were periods when reserves included assets like receivables or funds temporarily seized by authorities (e.g., Crypto Capital), but there was NO finding that USDT wasn’t fully backed. In fact, Tether has often shown it holds more than the necessary reserves, as evidenced in various attestations and reports post-settlement, and even in the report you keep posting NEVER they claim USDT isn’t fully solevent!

It’s funny how the no-coiner crowd keeps pushing the idea that Tether is some crypto scam destined to collapse, yet every single investigation, including the NYAG’s, has failed to back up that narrative. The reality is Tether has proven time and again that their USDT is fully backed and their business is profitable. The desperation to prove otherwise is just not supported by the facts.

some people win the lottery too

Again, that's not how it works. They wouldn't know if they're being investigated unless the USAO told them. And if the USAO had told them they're a target of an investigation then they'd say that instead of this garbage quote. Hell they may even be working with the sdny on some investigations, but in no way does that mean they would know if they themselves are the subject of another investigation. In other words, unless Tether is somehow working with the investigators on an investigation into Tether, Tether wouldn't know they're being investigated.

I didn't say that, that statement doesn't imply that or suggest that.

The result of this probe likely won't be that as the DOJ is just emboldened by their Binance and CZ conviction, where the founder spent a couple months at a Southern California Federalbsummer camp and the DOJ got a few billion dollars, and Binance continues to operate as before and no further regulatory overhang is above them and all the money coming in and out is magically seen as clean.

> Why must it collapse?

One, because the consequences of an AML failure are immediately catastrophic: a dollar stablecoin can't reasonably survive without access to the dollar financial system. Tether's unregulated status means enforcement options are zero or ban. (Banks can be fined and put under compliance regimes.) Running a perfect AML programme indefinitely is impossible. There is no indication Tether runs much of an AML programme at all.

Two, because bank-like structures are inherently unstable. Asset values fluctuate. The banks they hold cash or assets at will fail, sometimes beyond deposit insurance limits. Unlike banks, Tether has the benefit of being able to block redemptions. But they can only do that so many times before a regulator takes notice.

In summary, Tether exists at the pleasure of American regulators and the consequences of losing favour are collapse. They're compliance-wise and financially unstable. The consequences of a single failure won't be catastrophic. But eventually they will fail for the same reason every bank without deposit insurance will, eventually, fail.

Governments don’t like stable coins so even if it is perfectly 1:1 they will still try to find a way to go after them.

Other commenters have hinted the path is “sanctions” for not enforcing some controls..

Personally I can’t wait for governments to go after stable coins, then Bitcoin will really “moon”!

As the article states, nothing has been proven. Didn't read further than that.

Tether is an operation that is a money printing machine on its own. They absolutely don't need to play pump'n'dump tricks to make money. It doesn't make any sense. Pump'n'dump schemes are risky. Tether has many options to make money with way less risk.

Banks have like 10% or even less the dollars that they are supposed to be holding, but still are doing all fine.

Personally I don't think these tether conspiracy theories were ever true. Maybe they aren't 1:1 backed, but they have always been financially well off enough to keep the company running. And after the interest rates went up, they are probably making a killing. Typical bank has minimal reserves compared to them, and everyone is fine with that.

what has the price done over the past 8 months, past 3 years?

Reserve requirements are completely different from capital requirements. US banks are required to hold about $108 in assets for every $100 they hold in deposits, and their actual holdings are typically in the range of around $110 to $115 in assets per $100 of deposits. Central bank reserves are one type of asset that commercial banks can hold; a 0% reserve requirement just means that commercial banks can hold all of that ~$108 in other assets if they choose to.

In contrast, Tether has historically admitted to having as little as $100.20 in assets per $100 in liabilities [0], with a significant fraction of it in crypto and other assets that effectively wouldn't even count toward banks' capital requirements. It has probably dropped below $100 in assets per $100 in liabilities - i.e., been insolvent - at some point, and even taking its latest audit [1] at face value, it has far less capital than would be needed for a bank with the same asset profile in the US or other developed countries.

[0] https://assets.ctfassets.net/vyse88cgwfbl/1np5dpcwuHrWJ4AgUg...

[1] https://assets.ctfassets.net/vyse88cgwfbl/6h4YWqZOXbwtBaPtYg...

> there is no evidence that they are doing anything else

There is a lot of evidence they aren't just buying Treasuries. The only times people looked, the money was being held in weird stuff, including frozen deposits at non-FDIC insured banks and private loans [1].

[1] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...

> It would be very simple for Tether to just hold $1 for each 1 Tether coin.

It would not be "very simple" for them to do this. No commercial bank lets you walk up to the teller with $1B and ask to deposit it, much less $93B. The financial system doesn't work that way. They have to cycle it through bonds on the repo market, which is what most huge firms do.

You can't run a 120 billion dollar bond trading operation with like 4 people.

That amount of money is a huge amount of work to manage no matter what you are trading.

The simple explanation of how they do this is that they don't have anything close to 120 billion to manage.

It is really a sociological and network experiment of how long fraud can persist when the fraud is in the short term interest of all nodes of the network.

I suspect the reason Bernie Madoff was able to persist for so long is that many of the investors thought he was front running trades because of his position with Nasdaq. People tend to be fine with fraud if they are directly benefiting from the fraud and only risking their capital in the process.

Time is not a good measure of non-fraud. That is just a rationalization because any crypto investor has to basically keep the idea of a tether fraud out of their head at this point considering the risk to the ecosystem would be so catastrophic.

What does actually grow in time is the risk to the network.

If it was that easy then we'd probably see more banks that do just that.

What you describe is their actual business model.

Tether makes the most profit per employee of any company in the world. Their transparency, speed, and market success is renown.

This thread is full of tether truthers living in 2017.

I will try to find it. I would also point out they hold excess reserves in Bitcoin.

My guess is nobody can get them on not being 1:1 but this idea of AML violations as the attack vector makes a lot of sense.

This is the most recent one linked on their site[1]:

https://assets.ctfassets.net/vyse88cgwfbl/6h4YWqZOXbwtBaPtYg...

Edit: to save people a click, the report shows 125 Billion in assets vs 113 Billion in liabilities. Approx 81 Bil in T-bills

[1]https://tether.to/en/transparency/?tab=reports

The Fed doesn't let banks do this because it would be "too safe"

https://en.wikipedia.org/wiki/Narrow_banking

That is a wallet with a lot of Bitcoins in it. We don't know to what degree it's controlled by Tether. We don't know the degree to which it's otherwise encumbered. If I recall correctly, FTX also pointed to wallets with Bitcoins in them from time to time.

To be clear, I am not saying Tether is committing fraud. Just that to the extent there have been investigations, they came up short, and that them being short is not even among the main risks to their existence.