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Earlier quoted context omitted.
https://tether.to/en/transparency/#reports They claim 85% cash/cash equivalents, 15% less liquid assets. Cash equivalents is broken down also, 55% is Treasury bonds.
Thats meaningless unless it's an audited by a top 4 firm.
I saw this on their site: > FDIC INSURED ON USD $250,000 > You USD is held by our banking partner, Metropolitan Commercial Bank, which is FDIC insured, so the cash you hold with Voyager is protected. So does that mean anyone with less than $250k is guaranteed their money? Is there any legal backing?
Seems like a marketing spin to lure customers into a false sense of security. From the fine print in the user agreement: "Cash in the Account is insured up to $250,000 per depositor by the FDIC in the event the Bank fails if specific insurance deposit requirements are met. FDIC insurance does not protect against the failure of Voyager or any Custodian (as defined below) or malfeasance by any Voyager or Custodian empl…
Voyager has an omnibus account with the Metropolitan Commercial Bank where Voyager's customers deposit their money. Voyager acts as the money manager of the omnibus account and has absolute control over the money.
Metropolitan is a member of FDIC and is FDIC insured. In the case of the Metropolitan bank failing, the FDIC insurance kicks in to cover any loss of the omnibus account upto 250K. However, Voyager is NOT a member of FDIC and is not FDIC insured. In the case of Voyager failing, the money is gone. FDIC won't be involved as Metropolitan is still fine.
Voyager customers hoping FDIC coming in to cover their loss are going to have a rude awakening.
Edit: A simple analogy is that your parents and you open a shared account with a bank. Your parents lose all the money from the account. FDIC is not going to cover any of the loss since the bank is fine.
Earlier quoted context omitted.
Pointing to the list of failed banks from the website of the government agency that insures them and makes customers whole doesn't convey as strong of a point as you might have intended.
I think it perfectly well makes the point that regional banks are much more likely to practice poor risk management and fail than larger banks. If your goal is "boring banking", having to have the FDIC come in and arrange a sale of your bank is ... not it?
That being said, it looks like we average around 4 regional bank failures a year in the US. There are a little under 5000 banks in the US, almost all of which are regional, so that leaves a 0.08% chance that any particular one of them will fail (all things being equal, which they probably aren't).
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Nah the IRS has frozen bank accounts multiple times merely because people owned cash businesses where they made sub-10k deposits on the regular without any intention to structure it. It's frighteningly easy to lose access to your bank account in the US.
But that's not at all what happened in the thread we're replying to..
Don't think you have the information to say that.
OP didn't say what happened. I don't think we can say anything in particular is exactly what did happen without more information. Unless you don't consider the US a place with "a stable financial system and/or government" -- which may be accurate -- then this very well could have taken place in the US. I'm not sure you can infer where this took place.
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> No depositor has ever lost a penny of insured deposits since the FDIC was created in 1933 This is just a truism because all insured deposits are insured, and all non-insured deposits are non—insured.
Yes, you're right, however, do you have a source on how much has been lost in the last 89 years? I've had a lot of trouble finding anything more than that one bank that had $30M in assets losing $500K in total one time in Texas in the last 5 years.
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I disagree. To me it's like saying passwords are broken because most people choose "password123". Or like saying dollar bills are bad because they can rip. Safety rails should be made of course, but if you aren't even maintaining basic hygiene within a system then I'm sorry but that's on you. People are learning to use better passwords, and people learned long ago to keep their paper money in a wallet. The same will…
Passwords are broken because people choose “password123”. People work on all sorts of alternatives because of this.
> We are in discussions with various parties regarding additional liquidity and the go-forward strategy for the company. While we don’t have anything else to share today, we are working diligently and hope to have more information to share soon. Translation: we are insolvent. The action we have taken prevents a run that will wipe out our working capital. We have been running a fractional reserve all along. This is ge…
How do you know that? It’s possible 3 Arrows missed their loan payments and that was enough to prevent them from meeting liquidity demands, no?
I sometimes wonder if I'm the only one who just wants a bank to be a bank. I've been with the same relatively small regional bank for 30 years. I have a checking account, savings account and that's it. They've been stable this entire time, and I've never worried my money was going to disappear. As another sign of being an old man, I'm old enough to remember the phrase "as safe as money in the bank". You see, when I w…