Tether fined US$41 million for lying about fiat currency backing

[RedDuke]

https://www.bnnbloomberg.ca/tether-...pay,retail transactions by American residents.

This is not even a slap on the wrist, this is 10 thumbs up.

Congrats to everyone who totally ignored tether issues and loaded up. Job well done!!!!!!!!!

 

[NoahA]

I think we all know the money isn't there. With luck, some investments have paid off, and perhaps they can pull a rabbit out of a hat and actually have the necessary collateral. But I think any major drop in equities or bonds will start to expose what's really there and what isn't.

What I don't understand is why exchanges are willing to take it. Everyone says that most people only have USDT for minutes, while they are doing a transaction, so their risk is very small. The chances of it blowing up in any one hour time frame are really small. But its perhaps the exchanges that need to hold it so that customers can transact back and forth. If there is a ever a so called "bank run", everyone will want out of USDT, and its exchanges that will be holding it all. Then when they go back to the issuing company to exchange of USD, good luck.

So you would think that they would do their due diligence, but its perhaps just the cost of doing business. If each exchange holds just 1 or 2 billion of this stuff, then its a loss they can absorb. Not transacting in it might cost them lots of lost revenue.

 

[johnarb]

What I don't understand is why exchanges are willing to take it. Everyone says that most people only have USDT for minutes,

You have made assumptions that are extremely incorrect. Who told you this information and do you have quantifiable data backing it?

You do know (most of) USDT is an erc-20 token that can be tracked on the Ethereum blockchain, don't you?

If you start with false data, you get false conclusion



"Part of the reason is it never gets redeemed is almost none of its $60+ billion market cap is held on exchanges.

As these two charts show, only $2 billion is held on exchanges, or about 3% of circulating supply, less than cash in the trust."

https://twitter.com/x/status/1399947306137534466

"The rest ($58B +) is in wallets used as a trading pair or for transfers. 18% is tied in smart contracts"

https://twitter.com/x/status/1399947313989263360

 

[NoahA]

So instead of answering questions, I have to ask then, why is so much of it held long term, off exchanges, when there is no chance of it gaining in value? You are holding a coin pegged 1:1 with USD. I understand if your exchange doesn't let you hold USD, then sure, that's a reason, but once again, if its off exchange, what is the benefit?

And more importantly, why is Tether Inc hiding their financials? Either they have the money or they don't. Perhaps their investments have done so well that they are swimming in money? And of course this is money the holder of USDT will never see, as its just a cash cow for the owners. The owners get to keep all the profit, while the holder of USDT takes all the risk.

 

[johnarb]

So instead of answering questions, I have to ask then, why is so much of it held long term, off exchanges, when there is no chance of it gaining in value? You are holding a coin pegged 1:1 with USD. I understand if your exchange doesn't let you hold USD, then sure, that's a reason, but once again, if its off exchange, what is the benefit?
.

That is a very easy question to answer if you're actually a crypto investor

The yield on stablecoins is very high

Look at BlockFi, Celsius, Nexo, AAVE APY on USDT

 

[RedDuke]

That is a very easy question to answer if you're actually a crypto investor

The yield on stablecoins is very high

Look at BlockFi, Celsius, Nexo, AAVE APY on USDT

And the yield comes from where?

 

[NoahA]

That is a very easy question to answer if you're actually a crypto investor

The yield on stablecoins is very high

Look at BlockFi, Celsius, Nexo, AAVE APY on USDT

Got it... so people hold stablecoins for the interest. Where does the interest come from?

 

[NoahA]

And the yield comes from where?

LOL.. we posted at the same time.

I bet I know where it comes from... its from profits made from flipping NFT's.... hahahaha

 

[johnarb]

Yield comes from the borrowers. Velocity of money, hence demand for cryptos is very high

I posted several videos on it a while back, but you guys can do your independent research and let us know if you find information that contradicts this

 

[HolyGrailSeeker]

I think we all know the money isn't there. With luck, some investments have paid off, and perhaps they can pull a rabbit out of a hat and actually have the necessary collateral. But I think any major drop in equities or bonds will start to expose what's really there and what isn't.

What I don't understand is why exchanges are willing to take it. Everyone says that most people only have USDT for minutes, while they are doing a transaction, so their risk is very small. The chances of it blowing up in any one hour time frame are really small. But its perhaps the exchanges that need to hold it so that customers can transact back and forth. If there is a ever a so called "bank run", everyone will want out of USDT, and its exchanges that will be holding it all. Then when they go back to the issuing company to exchange of USD, good luck.

So you would think that they would do their due diligence, but its perhaps just the cost of doing business. If each exchange holds just 1 or 2 billion of this stuff, then its a loss they can absorb. Not transacting in it might cost them lots of lost revenue.

Exchanges make a lot of money lending out usdt. So the risk is worth it to them. Also usdt has the most volume so its easier for users to trade with them.