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Tether minted most USDT to just 2 firms – Alameda and Cumberland

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Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#91

Post by themagician »

crazydoggers wrote: post #63
themagician wrote: post #58

Earlier quoted context omitted.

The point of Tether is to make money—for Tether, not you. They are getting rich when you buy a million dollars worth.

How? They have to maintain that million dollars so I can withdraw it when I need it. Nothing has yet shown that is a problem or that’s not being done. Go deposit 1 million in a bank, and then ask for it in cash the next day. You won’t get it.

They do not maintain that million dollars as dollars. They instead buy all sorts of stuff. Only a small portion is maintained as dollars.

If there is a run on Tether tomorrow it will collapse. You won’t get your money. Assets will need to be liquidated, and some of them might be junk.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#92

Post by ceejayoz »

rfd4sgmk8u wrote: post #81
NickM wrote: post #3

There are a lot of areas of crypto where I feel like I have a pretty good understanding, but I genuinely don't understand why anyone would "invest" in a stablecoin. What advantage does holding something like USDT offer over simply putting dollars in a bank account?

Gemini pays 7.4% APY interest on your GUSD/DAI stablecoin holdings. This is better than any bank in the universe.

Would you trust a bank that promised a 7.4% APY savings account, or would you go "hmmmmmm..."?

> This is better than any bank in the universe.

"If it sounds too good to be true..."

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#93

Post by themagician »

crazydoggers wrote: post #69
themagician wrote: post #65

Earlier quoted context omitted.

Literally most of what Tether holds is commercial paper—basically IOUs for payroll. From who? Who knows. Probably other startups.

Do you have references? Edit: Haha.. asking legit question for data because I’m curious gets downvoted. Lol. I should know to avoid the crypto discussions here. Lots of emotion and not much useful information getting shared

Yes, Tether is my source: https://tether.to/wp-content/uploads/2021/05/tether-march-31...

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#94

Post by freeAgent »

hackernudes wrote: post #24
freeAgent wrote: post #14

Earlier quoted context omitted.

It amazes me that more people don't read the Tether ToS and run away.

Maybe people are trying to run away from their own country's currency even more urgently? Is it really risky to get some tether for a short time to buy some other cryptocurrency? Maybe the question is why do some big exchanges still work with tether? Must be worth it to them!

Who specifically are you talking about? In many countries with inflation problems, USD aren't hard to come by. In countries with no access to USD and/or capital controls...then yes, Tether kinda sorta makes sense as an intermediary to get to another asset, but that does absolutely nothing to explain why Tether's issuance exploded and continues to rise exponentially (at least through the end of March 2021 before pausing for a few months without explanation).

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#95

Post by merely-unlikely »

freeAgent wrote: post #14
AlexandrB wrote: post #10

Earlier quoted context omitted.

Luckily their TOS says: > "There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money." Edit: Oops this has been updated to: > Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves th…

It amazes me that more people don't read the Tether ToS and run away.

Tether volume has stagnated compared to other stablecoins like USDC

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#96

Post by turminal »

Spivak wrote: post #64
turminal wrote: post #52

Earlier quoted context omitted.

> Tether might be a scam in the sense that they don't actually have the backing assets they claim Tether is a scam on a whole other level than this

But like how? I get why the SEC might have words for Tether the company but I don't get how users of tether have been scammed. You buy coin at around $1 and sell at around $1. Like from an end-user perspective as long as the thing actually functions as a stablecoin for some time interval you care about what else is there?

The problem is those two companies that bought most of it have the power to prematurely end that time interval whenever that makes financial sense for them.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#97

Post by Wizrad »

gringoDan wrote: post #72

I'm no Tether apologist, but this doesn't seem like an issue to me? Alameda and Cumberland are the 2 biggest liquidity providers in crypto trading. Tether is the source of liquidity for many of the exchanges that they trade on. So of course they'd use Tether to on-ramp into the crypto ecosystem and trade. I suppose the real news here is that Alameda and Cumberland haven't redeemed much Tether (proportionally), so if…

Most likely they trade out of the USDT position shortly after creating it which would minimise their exposure.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#98

Post by Jasper_ »

ceejayoz wrote: post #89
Jasper_ wrote: post #76

Earlier quoted context omitted.

Because we know that Alameda and Cumberland do not, on the whole, possess $63 trillion in USD. That's the official number of "outstanding Tether" posted on the Tether website [0]. If these allegations are true, the other holders of Tether total a couple million, meaning Alameda and Cumberland together must have trillions of holdings. Which, based on filings, we know isn't what they're reporting. [0] https://wallet.te…

$63 billion, not trillion.

I apparently cannot parse decimal places, thank you for the correction.

Re: Tether minted most USDT to just 2 firms – Alameda and Cumberland

#100

Post by bostonsre »

Spivak wrote: post #43
jqpabc123 wrote: post #32

Earlier quoted context omitted.

It doesn't end there. Slightly less obvious is the fact that Tether and other "Stable coins" are the only "stability" that exists in the crypto marketplace. More than half of all crypto trades involve stable coins. And exchanges play along (wittingly or not) with the ruse for their own benefit. So if Tether is a scam, so is bitcoin and the entire crypto marketplace.

Look, Tether might be a scam in the sense that they don't actually have the backing assets they claim but that doesn't invalidate the rest of the market or the trades done with them any more than your bank having They are absolutely running afoul of banking regulations but that's not exactly catastrophic for the whole market. Unless there's a bank run the only thing Tether actually needs to do is keep the trading val…

It's all fine and good until there is a run on tether and they can't actually give customers their money back. They will throttle customer withdrawals, the issue will be magnified, and I would guess tethers would be selling for pennies on the dollar on the secondary market.
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