Tether Now Holds Over $5 Billion Worth of Bitcoin to Back USDT (But Should It?)

It always amazes me how little critical thought is put into major financial decisions once crypto becomes involved.

It's like people are begging for the next FTX.

Go to tether's web site...

Look at how many different coins they have and how many types of assets they claim to have to back them up.
Now assume that there is a certain amount of buying and selling in all those asset classes. Do you really think they are doing all that, plus maintaining the necessary infrastructure, plus other basic tasks like hiring/firing, security, facilities,accounting, purchasing,accounts receivable , business continuity planning, disaster planning, etc.

The value of the holdings they're claiming are not small. 3.6% precious metals is a lot of metal went you claim to have 100 billion in assets. How long is it going to take a guy to check all those bars?
5% loans means a 5 billion dollar loan portfolio. How many individual loans do you think that is? How many hours to make sure all the payments are coming in? Deal with delinquencies and defaults? Create/acquire new loans?
Even the amount of us treasuries they claim to have implies a significant amount of work since bonds have limited duration are are not 1 billion dollars each bond.

If you look at something like SGOV, which only has 1/5 of their AUM, they have 16 people just in trustees and officers.

Keep in mind, it would be stupid to have any single person fully in control of a particular asset class. That would be just begging to get ripped off.
 
engineering said:
It always amazes me how little critical thought is put into major financial decisions once crypto becomes involved.

It's like people are begging for the next FTX.

Go to tether's web site...

Look at how many different coins they have and how many types of assets they claim to have to back them up.
Now assume that there is a certain amount of buying and selling in all those asset classes. Do you really think they are doing all that, plus maintaining the necessary infrastructure, plus other basic tasks like hiring/firing, security, facilities,accounting, purchasing,accounts receivable , business continuity planning, disaster planning, etc.

The value of the holdings they're claiming are not small. 3.6% precious metals is a lot of metal went you claim to have 100 billion in assets. How long is it going to take a guy to check all those bars?
5% loans means a 5 billion dollar loan portfolio. How many individual loans do you think that is? How many hours to make sure all the payments are coming in? Deal with delinquencies and defaults? Create/acquire new loans?
Even the amount of us treasuries they claim to have implies a significant amount of work since bonds have limited duration are are not 1 billion dollars each bond.

If you look at something like SGOV, which only has 1/5 of their AUM, they have 16 people just in trustees and officers.

Keep in mind, it would be stupid to have any single person fully in control of a particular asset class. That would be just begging to get ripped off.
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I appreciate all your work into looking at the details... and your concern that Tether is a walking time bomb

But have you played it out exactly how Tether would fail? Like what would it take putting all those details as part of the failure-scenario?

If I tell you that over 70% of the total usdt in circulation are not in redeemable state, would you believe me? All it takes is looking at the blockchain addresses on the different networks, everything is transparent, Ethereum, Tron, BSC, Solana

There was coordinated efforts by the way, a big hedge fund even publicized the short Tether position, big players all coordinated to redeem about $20B within a week's time, $7B of which was over a weekend, you could search the news in 2022 at the height of the crypto winter

Imho, the biggest threat to Tether is the US gov shutting it down or capturing it as in the same way as Binance dot com is now captured

But I'd like to know your Tether failure scenario if you have one..

There are lots of Tether truthers waiting for the eventual collapse, just mentioning it as an aside
 
johnarb said:
But have you played it out exactly how Tether would fail? Like what would it take putting all those details as part of the failure-scenario?
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Honestly no idea.

The hardest part of going short is knowing when. You can read about people having their suspicions about Madoff at least a decade before.

This is the brilliance that they never give Michael Burry enough credit for. He didn't just know that defaults would happen, but also when.

Say you knew they were overstating their holdings by 50%, how would you manage to get solid enough data to prove it to the rest of the world?
Not an easy problem but that's what groups like Citron and Muddy Waters do, and I think they're only successful some of the time.
 
engineering said:
Honestly no idea.

The hardest part of going short is knowing when. You can read about people having their suspicions about Madoff at least a decade before.

This is the brilliance that they never give Michael Burry enough credit for. He didn't just know that defaults would happen, but also when.

Say you knew they were overstating their holdings by 50%, how would you manage to get solid enough data to prove it to the rest of the world?
Not an easy problem but that's what groups like Citron and Muddy Waters do, and I think they're only successful some of the time.
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I think their ponzi could go on for a very long time, if only it wasn't for illicit finance. But then again it's already been going on for a long time; almost 10 years now.

At the hearing before the congress, the treasury deputy specifically said and i quote "We need additional tools to go after cryptocurrencies that claim to be dollar-backed, buy try to escape US jurisdiction."


In 2018 Tether allegedly had $850M of their reserves seized by the government. Roughly 40% of the entire reserves. They didn't disclose it until they were busted in 2019.

Interesting fact is of those alleged $850M, they actually had $60M (or that's atleast how much the government found).

So they were like 55% backed at the time.

https://twitter.com/x/status/1780385225966579836

Everyone was affected by the "crypto winter", except for Tether you knew every time a large player (Celsius, Blockfi, Genesis, Silverbank..) went down... Tether would come saying "Not affected".

They bail out all the ponzi schemes, only this year $3B to Justin Sun, like $150M went to Nexo(obvious ponzi), and there are probably many others.

It's next to impossible to redeem Tethers. Pretty much everyone claims they swap USDT to USDC and then redeem USDC.


Likely the biggest financial con in the history of mankind.

Kind of crazy how nothing has been done about it. It was banned in New York but that's about it.

The opportunity is incredible right now though as there are means and liquidity to short heavy on CME and then enforce the regulatory actions to take down the market.
 
orbit23 said:
Kind of crazy how nothing has been done about it.
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This is probably the biggest argument for physical gold.

There seems to be a constant stream of fraud with major organizations that seem to be paid up with the right people.

Hell, people like Epstein and Corzine were even allowed to manage funds after their crimes.

The whole system is based on trust and those running it keep becoming less trustworthy. If it gets bad enough people will pull their funds and holding large amounts of paper cash is a bad idea.
 
- incorporated offshore
- claims to have $100B+ of assets
- refuse to be financially audited
- prints billions of dollars on weekly basis
- history of working with fraudsters like SBF
- history of proven lies (claiming they were backed while they were not)
- banned in NY
- the $850M that were "seized" turns out to have been $60M
- Tether employs a paid shill army on Twitter to defend it's reputation


Let me break it to you, these t-Bills don't exist.

They probably have like 20-30% of the reserves.

Bitcoin will probably go to $1,000,000 in tether dollars (and Tether will be worthless) once it's shutdown by the feds and whatever amounts they have are seized.

The feds even gave everyone a heads-on!

How long before they take action? A month? 2 months?
 
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orbit23 said:
- prints billions of dollars on weekly basis
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This is incorrect, Tether prints billions of usdt :D

Then they buy billions of $ worth of US Treasuries, already verified by Cantor Fitzgerald and Yellen is very thankful since no one wants to buy US debt no more

orbit23 said:
How long before they take action? A month? 2 months?
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Keep waiting... that's the best service of Tether to everyone in the world

it keeps bitter nocoiners like you out of the cryptos ecosystem and we take advantage of all the opportunities like meme coins :D
 
As I said earlier... Michael Lewis' book has details from when Lewis was watching SBF. There is a little bit of insight into Tether that tells enough. SBF stated personally that when dealing with Tether... he found them the most 'sketchy as fuck' organization on that level.

I don't know what other thing I can say to possibly enlighten someone here. Looks like people will believe what they want and there is nothing you can say... even the world's #1 criminal outing another gigantic ponzi, and even still that won't change anyone's mind.

So... here we go again with another pending stable-coin collapse on the horizon. We've been through this before...
 
The_Krakenite said:
I don't know what other thing I can say to possibly enlighten someone here. Looks like people will believe what they want and there is nothing you can say...
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It is an interesting exercise to try and prove it though. If nothing else it hones one's skills at spotting fraud.

That ratio of AUM to employees is enough to convince me that it is a fraud. Especially given the composition of assets they claim.

I do wonder what other techniques could be used. Maybe look at the expect flows of assets based on their claimed AUM and see if the revenues of their service providers make sense?
 
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