Tether is once again back in the spotlight. This time it is due to an investigative piece in Bloomberg. I wouldn’t dismiss it outright as it was a really interesting read. There were also some pieces in there that we hadn’t originally known about Tether.
Here were some of the main highlights:
Tether Loaned Celsius $1bn USDT in exchange for Bitcoin as collateral. This would mean that some of the reserves are loans from Celsius
Commercial Paper: Tether has a lot of it. If correct, it would make Tether the 7th largest holder of such debt. There is no breakdown of what this commercial paper is but according to a document seen by the journalist, it includes billions in Chinese company debt. This is something I talked about in my Evergrande video.
A previous banker of Tether said that the company had put reserves at risk by investing as if it were a “hedge fund”
Tether’s main bank in the Bahamas no longer holds the bulk of the assets. They only retain about $15 billion
Now, these are indeed legitimate concerns that once again raise the question of whether Tether is 100% backed by reserves. It once again raises the spectre of whether Tether could be at risk in a modern day “run on the bank”.
That all being said - Tether remains operating. There has never been an occasion during which they have denied a redemption request from a client. Large crypto companies from exchanges to lending platforms and the like routinely redeem billions. I find it hard to believe that these individuals would be confident using USDT if they had these suspicions.
Moreover, Tether has settled their case with the New York DA. I can’t imagine the DA would have allowed them to settle if they could find any evidence of reserves not actually being present.
Also, not that I am a fan about whataboutism, but let’s not forget that banks in the US are not required to hold any reserves at all for their outstanding loans.
So, should we be worried about Tether?
Well, yes. But not because of it being illiquid. The main risks for Tether are what regulators have planned.
It seems pretty clear that the current administration would like to regulate stablecoins like banks. There are only certain companies in the stablecoin space that would be able to do this and those would be the onshore US based ones (USDC, Paxos etc).
It was also disclosed this week that USDC received a subpoena from the SEC and that they are cooperating with them. And, just two days ago it was reported that the White House was considering a wide ranging executive order on cryptocurrencies - one that you can be certain will be targeted at stablecoin issuers.
If US regulators require exchanges to only use US registered stablecoins, it could severely damage the liquidity of offshore stablecoin issuers such as Tether. Any restrictive regulation could actually precipitate the redemption crisis that many fear.
So, I’m less concerned about the FUD coming from the media outlets and more concerned about the actual statements coming from US regulators. It is for this reason that I don’t hold USDT as a stable store of value in my portfolio.
But the exact workings of Tether are unclear. Quite literally, nobody knows precisely how Tether operates — or which companies’ commercial paper make up an overwhelming majority of its assets backing USDT.
We understand that Tether lends out its USDT in overcollateralized loans, likely for Bitcoin and Ether, but Tether has never formally disclosed how those operations work.
In fact, Tether has gone out of its way to obfuscate the services it provides to the crypto industry.
Discounts for large issuances are rumored. In our research, we are yet to find any confirmation of any discounts for USDT purchases.
(…)
Whether that’s true all the time — unfortunately nobody knows for sure.
De hecho este informe tampoco nos da demasiada información. Yo hasta que no vea hasta el último céntimo del valor de los USDT garantizados por efectivo, cripto o activos, no me voy a fiar. Ya tenemos a los gobiernos con sus “monedas estables” solo nos falta que también empresas puedan imprimir a lo loco.
Bitcoin y las criptomonedas tienen diversas propiedades maravillosas, una de ellas es que son transparentes. Puedes leer la emisión y distribución sin problema.
Otra propiedad es que no están respaldadas con nada, solo una comunidad que las utiliza y les da valor. Fantástico ¿no?
No entiendo el porque de tanto recelo con tether, tiene más respaldo que el dollar o cualquier fiat.
Dudo mucho que impriman a cambio de nada, es un negocio y en tal supuesta situación, llevaria a la perdida total de credibilidad de la moneda y denuncias con cargos criminales a los directivos. https://wallet.tether.to/transparency
No se ha negado lo que dice es que no se lo han pedido
" Tether no habría recibido ninguna solicitud u orden de congelar las direcciones de Tornado Cash
… En el momento en el que Tether reciba una solicitud aplicable/legítima de un agente de la ley verificado, estos procederán a congelar todas las direcciones implicadas."
Osea que si se lo piden las bloqueará, lo que demuestra que es un sistema centralizado, no resistente a la censura, no hay ninguna diferencia con el sistema actual, y todos aquí hablando de criptomonedas, englobando a estas mierdas junto a Bitcoin, cuando no tienen nada que ver…
Latest Tether FUD
