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>Tether has yet to verify that it holds $2.3 billion in reserve This will be interesting to see. I wonder how long until we'll know. I saw an interesting data analysis here on HN a while back showing a correlation, and hypothesizing a causation between the rise of Tether and the price of BTC.
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Here’s what I don’t understand. You can exchange bitcoins for fiat currency. But afaik you can’t exchange USDT for fiat. So why is anyone willing to take the risk of holding on to USDT? Why are any exchanges even willing to touch it?
A lot of exchanges have a hard time setting up traditional banking partners that can handle physical currency for them. If these exchanges don't offer USDT to their customers for parking money, they wouldn't have any customers anymore.
This week in "Laws are hard"
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I'm being 100% pedantic here (I fully agree tethers are ridiculously shady) but if tether one day rises to 1.05 USD, and the tether company then sells more for BTC to bring it back to 1.00 USD, and the tether company subsequently converts the BTC to USD, how is that fraud?
Because they're not claiming "We can maybe somehow come up with the money that the Tethers represent in the future." they're saying they have the money right now. And again, you're missing the point that it doesn't seem like they are selling the USDT for anything , BTC or otherwise. They're just printing it and buying BTC with it. EDIT: That may seem like splitting hairs but the point is they aren't issuing them in e…
Edit: the assumption seems to be that they are buying bitcoin and holding it, which would increase the bid and result in not being backed by USD. If they are not holding the bitcoin, then the buys and sells even out, and they are not adding to the bid, and they hold cash equivalent to USDT. I am quite interested to find out which it is.
How trustworthy is Kraken? Tether looks like a good short since if it is a fraud it will go way down and if it isn't a fraud it will stay right where it is. I'm in the US and would like to short Tether. But I want to get paid if I'm right.
Why would someone ever take the other end of that bet?
How trustworthy is Kraken? Tether looks like a good short since if it is a fraud it will go way down and if it isn't a fraud it will stay right where it is. I'm in the US and would like to short Tether. But I want to get paid if I'm right.
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Issuing USDT when there's no USD backing it up is an issue when you claim that it is backed 1:1. That is called fraud.
I'm being 100% pedantic here (I fully agree tethers are ridiculously shady) but if tether one day rises to 1.05 USD, and the tether company then sells more for BTC to bring it back to 1.00 USD, and the tether company subsequently converts the BTC to USD, how is that fraud?
That's not the concern. The concern is that if you have a contract that promises to pay the bearer X and you don't pay the bearer X when they ask because you lied, then that's fraud.
It's especially frowned upon when X has 10 digits before the dp.
Now, I happen to think that the Tether folk have been a tad more crafty than some of the black and white commentary is making out. More specifically, if they've been careful with who they've allowed to set up accounts, it may be effectively impossible for them to be called out.
I also don't think the CFTC calling in Dec is that interesting. It probably precipitated their change in T&Cs at the beginning of Jan though.
Guess we'll find out.
This is good news for quality cryptocurrency organizations. Bitfinex has problems, so does Tether and it's good to see bad actors in the crypto world getting weeded out, called out and put down.
> This is good news for quality cryptocurrency organizations. Are there any? I’m being honest and not snarky here: I’ve yet to see a single company in the space that’s not at least somewhat shady.
Iirc, the idea is you say you want x amount of cryptocurrency M sent to address A1, and you want to pay in cryptocurrency N, and it gives you an address B2 and a quantity y, and you send it, then they send it. With this set-up, I don't see much of a way for them to behave dishonestly that wouldn't be immediately discovered, as either you get the currency or you don't, and if they don't, then you can quickly tell.
(I mean, the exchange rate they give might not be the best available, but it is the consumer's choice whether or not to accept the exchange rate for the convenience.)
Also, it is possible that I am substantially mis-remembering how it works, as I've never used it (I don't in fact own any of any cryptocurrencies, and never have except for testnet ether)
Also, I don't know if shapeshift is still around or not.
What is the point of Tether? Is it for dodging taxes?
Tethers are car wash tokens, not dollars, so various organizations are willing to let you do whatever with them. The obvious incentive on the sell side is that you can print literally billions of car wash tokens and buy other cryptocurrencies with them.