if you have looked at the fee schedule for USDT ($1000 minimum, 0.1% per transaction above 1m), you will understand how hard it is for most of you to even redeem your Tether. a typical international wire transfer fee should be about $35~60. understandable that they need certain commissions to process your withdrawal, but this nominal amount is very likely a method to prevent typical crypto traders from redeeming. and, they didn't even mention how long you should expect till your funds would arrive in your bank account.
using USDC in comparison, coinbase has the ability to convert it into fiat for free, at least in one of the progress.
after this reply, i will also update the thread so that you can compare the asset report between USDC and Tether.
Topic: Tether (USDT) is somehow shady, and might crash all crypto. (Read 136 times)
The problem lies in the opacity of the Tether emission process. Because of centralized nature of its release, members of the crypto community are doubting if Tether has a reserve fund. Over the years, different government agencies have launched investigations into the Tether organization. The story of Tether continues and is unlikely to be resolved in the near future. However, people still use it as it is one of the most convenient stable coin so they have to trust it.
the last sentence is where the problem is. if people don't attempt to redeem their coins, the sum of Tether they see remains a number. indeed stablecoin is a need for faster crypto trading, but we actually need one that we know what it's fully backed by. on the other hand, looks like people haven't learned a lesson about the "cloud mining" scam, which i thought people would be smarter to invest a big sum.
i kinda have a conspiracy here: governments may already know that Tether isn't as solvent as a regular bank and may become insolvent in no time, but didn't carry out any actions to keep the panic low as long as they can due to its excessive influence.
merging a message
i suggest that people should start withdrawing their Tether and see if they actually can get the funds over time before depositing back. as shown in its funding structure, probably less than 3% is the guaranteed solvency. once again, we shouldn't overly trust a company without verifying its legitimacy. i just hope that we aren't falling into another trap again.
The problem lies in the opacity of the Tether emission process. Because of centralized nature of its release, members of the crypto community are doubting if Tether has a reserve fund. Over the years, different government agencies have launched investigations into the Tether organization. The story of Tether continues and is unlikely to be resolved in the near future. However, people still use it as it is one of the most convenient stable coin so they have to trust it.
Good point but lets hope what you pointed out doesnt happen as that will possible means an end to the market I will just assume that yes its not fully backed by a dollar value but other papers and investment covers that. I think what might happen is if usdt decide to go rogue then possibly their will be some organizations and exchanges that will come to the rescue for it I will point yes there are still gray areas but most businesses with dig dipping will be thrown out
Sad to know that having trust in such a major crypto instrument is based on pure hope. If this market collapsed for a reason or another, it will destroy everything including the way on how users trust cryptocurrencies in general.
Nowadays, most businesses prefer stable coins besides cryptocurrencies due to their stable value at the time of the trade, so the collapse will be a disaster.
its value is now too big to fall. it's horrifying that how people decide to ignore this issue. the disaster you have said, i say that will be a minimum of 50~70% crash. and that is why i propose a pressure test towards those stablecoins in the future to prevent this kind of issue.
I don't think this is FUD and i don't think that this is new information for most of the people that are interested in crypto or involved with it. There are always rumours around USDT and how safe it really is since they changed the wording regarding the backing of every USDT back in 2019. Before that they always said every USDT is backed by a real USD then they began to say "we have enough reserves to back every USDT with a real USD". This is a pretty shady statement as no one knows what kind of reserves they are talking about and if they really exist and so far they have not delivered a proof about this reserves as far as i know.
the reserve they have should now be considered questionable until any pressure tests have been executed to verify their statement. 
Thank again for the reminder, but yeah, Tether has been shady as hell from day one and if I'm not mistaken they have lawsuit and cases being filed by them by SEC because they don't want to be audited. And then they admit that they run on fractional reserves, similar to what bank does and it has the ability to crash the market if billions of Tether are liquidated.
Good point but lets hope what you pointed out doesnt happen as that will possible means an end to the market I will just assume that yes its not fully backed by a dollar value but other papers and investment covers that. I think what might happen is if usdt decide to go rogue then possibly their will be some organizations and exchanges that will come to the rescue for it I will point yes there are still gray areas but most businesses with dig dipping will be thrown out
Sad to know that having trust in such a major crypto instrument is based on pure hope. If this market collapsed for a reason or another, it will destroy everything including the way on how users trust cryptocurrencies in general.
Nowadays, most businesses prefer stable coins beside cryptocurrencies due to it's stable value at time of trade, so the collapse will be a disaster.
Good point but lets hope what you pointed out doesnt happen as that will possible means an end to the market I will just assume that yes its not fully backed by a dollar value but other papers and investment covers that. I think what might happen is if usdt decide to go rogue then possibly their will be some organizations and exchanges that will come to the rescue for it I will point yes there are still gray areas but most businesses with dig dipping will be thrown out
TLDR: Tether is the most traded stablecoin. however, i found that Tether has a shady contact location, undisclosed commercial papers they invested that back almost half of Tether's capitalisation, and a possible crypto crash if it collapses. we need a pressure test towards it in order to verify its legitimacy and solvency before the crash if it happens.
i don't mean to make a FUD using this thread, but i see something critical regarding Tether. i can be an idiot talking about this, but i think there is something regarding Tether that should be into our vigilance.
i don't mean to make a FUD using this thread, but i see something critical regarding Tether. i can be an idiot talking about this, but i think there is something regarding Tether that should be into our vigilance.
From the beginning, USDT was built as a trade instrument in the Bitfinex exchange (if i am not wrong) and they said it's backed by real dollars until we discovered that the exchange generates more USDT than what they have in reserve. After that, the same project announced by many blockchains without even to hear that all those tokens are backed by any value asset ever.
The same issue is with all the stable coins in the market.
TLDR: Tether is the most traded stablecoin. however, i found that Tether has a shady contact location, undisclosed commercial papers they invested that back almost half of Tether's capitalisation, and a possible crypto crash if it collapses. we need a pressure test towards it in order to verify its legitimacy and solvency before the crash if it happens.
i don't mean to make a FUD using this thread, but i see something critical regarding Tether. i can be an idiot talking about this, but i think there is something regarding Tether that should be into our vigilance.
i don't mean to make a FUD using this thread, but i see something critical regarding Tether. i can be an idiot talking about this, but i think there is something regarding Tether that should be into our vigilance.
I don't think this is FUD and i don't think that this is new information for most of the people that are interested in crypto or involved with it. There are always rumours around USDT and how safe it really is since they changed the wording regarding the backing of every USDT back in 2019. Before that they always said every USDT is backed by a real USD then they began to say "we have enough reserves to back every USDT with a real USD". This is a pretty shady statement as no one knows what kind of reserves they are talking about and if they really exist and so far they have not delivered a proof about this reserves as far as i know.
5. what should/can we do?
i want to verify if Tether really is that backed by fiat money rather than to ruin the stablecoin, a bank run is necessary. if the price of Tether is not highly impacted under the bank run, it means Tether is a legit stablecoin.
besides, Tether should make public of what they have invested in commercial papers rather than simply coming up to deny the rumours. the denial feels like dodging to reveal the documents. similar to Elon Musk asked WFP about the exact plan of how to solve the world hunger but later they failed to answer.
We know that USDT has some issues and it seems really shady. But what's the point of making a centralized coin become more transparent? Not that we do it in order to protect the market, but I believe the market will find its own way rather than relying on centralized USD token, not to mention there are alternatives of a stable coin, that many people and exchange benefited of.i want to verify if Tether really is that backed by fiat money rather than to ruin the stablecoin, a bank run is necessary. if the price of Tether is not highly impacted under the bank run, it means Tether is a legit stablecoin.
besides, Tether should make public of what they have invested in commercial papers rather than simply coming up to deny the rumours. the denial feels like dodging to reveal the documents. similar to Elon Musk asked WFP about the exact plan of how to solve the world hunger but later they failed to answer.
Personally, just by not using USDT would be a simply favourable cause for me. or just simply hodl BTC is enough.
TLDR: Tether is the most traded stablecoin. however, i found that Tether has a shady contact location, undisclosed commercial papers they invested that back almost half of Tether's capitalisation, and a possible crypto crash if it collapses. we need a pressure test towards it in order to verify its legitimacy and solvency before the crash if it happens.
i don't mean to make a FUD using this thread, but i see something critical regarding Tether. i can be an idiot talking about this, but i think there is something regarding Tether that should be into our vigilance.
1. preface
USDT or Tether, as everyone here knows, is currently the top stablecoin we are talking about. as of today, its trading volume is more than 100 billion. people use this coin to accelerate the process of transaction compared to normal bank wires. Tether claims that it's fully backed and safe. however, unfortunately, i think there are some doubts that needs should be checked as soon as possible.
let's begin with some questions:
how is Tether actually backed?
do they have real offices? if yes, where?
what will happen if Tether can't deliver certain withdrawal requests?
assuming you have a verified account in Tether, eligible to redeem Tether, according to the official website, how much fee would you have to pay per redemption?
2. the funds assets that back USDT
if you have ever followed up on this, you will realise that Tether is not fully backed by cash. i understand that is normal like other banks, they need to do something such as lending money out to generate profits. YTD Tether posted two proof of funds verified by Moore Cayman. the most recent one here.
why it matter? according to the report, as of 2021.6.30, Tether's market capitalisation was $62B, in which $30B was commercial papers and certificates of deposit. that is almost half of its whole capitalisation! however, unlike the bonds they have invested in, there is no way we can know what they exactly have invested in the "commercial papers" part. they aren't highly stable in fiat value. as of 2021.12.31, that is $24.16B out of a $78.6B; only about $4.2B is in real cash.
in comparison, USDC (2021.10 reports) has reported with only cash in reserve.
3. the most important: Tether lacks the most fundamental contact information about their company.
if you are never aware of what the "contact us" on its website looks like, there you are:
yup, this.
most of the average company would at least have a basic business location. commonly, not having a sufficient physical profile about a company could be a red flag. Tether, having controls over the billions worth of its stablecoin, shouldn't be exempted from this. it's understandable that more people are working at home, but once again, Tether is liable to almost the whole crypto market. what if they run off from it (although very unlikely)? who is going to be liable for the loss?
4. if Tether goes insolvent, the whole crypto market is doomed.
this is not a joke. if Tether suddenly goes insolvent to any withdrawal requests, then Tether is completely worthless. Tether's crash itself won't directly cause the whole crypto market to crash, but the fact is that there are too many major trading pairs involving this, which will cause the market to have maximum fear.
but how it crashes the market? in a very fundamental way by losing one side's value. hypothetically, the price of btc in Tether right now is 55'000, where the exchange rate between Tether and USD is 1-to-1, which means the price of a btc in Tether always is the same as in USD (1 btc == 55'000 USDT == $55'000). if Tether suddenly runs out of ability to keep its value stable, resulting in the price going to $0.5 (probably even lower as it's no longer redeemable), but the price of btc in Tether has not changed (55'000), then btc's actual price in USD will go below $27'500. because there is a finite Tether supply, it's impossible to keep the price by pumping it. basically, the loss of the stablecoin value is a direct cutoff towards cryptos' fiat value.
it's not like a regular stock market, where we trade directly between fiats and stocks. commonly, we trade crypto (
) using stablecoin, therefore, the stablecoin here is the intermediary between fiat and crypto. the exception is if we trade crypto directly with fiat, but the law is more complicated than i can think of.
5. you have to pay a minimum of $1'000 per redeem request.
according to the fee schedule, you will have to pay at least $1'000 for every single redemption request (0.1% per $1m+ redemption). that means 1% on a 100k Tether. if you are a whale, this sum won't be a big deal. however, to most of us who have less than $100k immediate liquidity are rather a gigantic vault. a typical international wire transfer would only take about $60, so why would it be that much?
in comparison, USDC offered in Coinbase would not charge any fee or at least won't be that much. BUSD offered by Binance would most likely only ask for the necessary wire transfer fee.
6. what should/can we do?
i want to verify if Tether really is that backed by fiat money rather than to ruin the stablecoin, a bank run is necessary. if the price of Tether is not highly impacted under the bank run, it means Tether is a legit stablecoin.
besides, Tether should make public of what they have invested in commercial papers rather than simply coming up to deny the rumours. the denial feels like dodging to reveal the documents. similar to Elon Musk asked WFP about the exact plan of how to solve the world hunger but later they failed to answer.
if it is possible, we should move to any stablecoins that prove their cash solvency over time, to minimise any possible disaster if/when Tether collapses.
thanks to my ted talk, sorry man.
edit: removed the tag "unpopular".
edit 1: added USDC report ref + suggestion to what we could do, fee for withdrawal to fiat.
i don't mean to make a FUD using this thread, but i see something critical regarding Tether. i can be an idiot talking about this, but i think there is something regarding Tether that should be into our vigilance.
1. preface
USDT or Tether, as everyone here knows, is currently the top stablecoin we are talking about. as of today, its trading volume is more than 100 billion. people use this coin to accelerate the process of transaction compared to normal bank wires. Tether claims that it's fully backed and safe. however, unfortunately, i think there are some doubts that needs should be checked as soon as possible.
let's begin with some questions:
how is Tether actually backed?
do they have real offices? if yes, where?
what will happen if Tether can't deliver certain withdrawal requests?
assuming you have a verified account in Tether, eligible to redeem Tether, according to the official website, how much fee would you have to pay per redemption?
2. the funds assets that back USDT
if you have ever followed up on this, you will realise that Tether is not fully backed by cash. i understand that is normal like other banks, they need to do something such as lending money out to generate profits. YTD Tether posted two proof of funds verified by Moore Cayman. the most recent one here.
why it matter? according to the report, as of 2021.6.30, Tether's market capitalisation was $62B, in which $30B was commercial papers and certificates of deposit. that is almost half of its whole capitalisation! however, unlike the bonds they have invested in, there is no way we can know what they exactly have invested in the "commercial papers" part. they aren't highly stable in fiat value. as of 2021.12.31, that is $24.16B out of a $78.6B; only about $4.2B is in real cash.
in comparison, USDC (2021.10 reports) has reported with only cash in reserve.
3. the most important: Tether lacks the most fundamental contact information about their company.
if you are never aware of what the "contact us" on its website looks like, there you are:
yup, this.
most of the average company would at least have a basic business location. commonly, not having a sufficient physical profile about a company could be a red flag. Tether, having controls over the billions worth of its stablecoin, shouldn't be exempted from this. it's understandable that more people are working at home, but once again, Tether is liable to almost the whole crypto market. what if they run off from it (although very unlikely)? who is going to be liable for the loss?
4. if Tether goes insolvent, the whole crypto market is doomed.
this is not a joke. if Tether suddenly goes insolvent to any withdrawal requests, then Tether is completely worthless. Tether's crash itself won't directly cause the whole crypto market to crash, but the fact is that there are too many major trading pairs involving this, which will cause the market to have maximum fear.
but how it crashes the market? in a very fundamental way by losing one side's value. hypothetically, the price of btc in Tether right now is 55'000, where the exchange rate between Tether and USD is 1-to-1, which means the price of a btc in Tether always is the same as in USD (1 btc == 55'000 USDT == $55'000). if Tether suddenly runs out of ability to keep its value stable, resulting in the price going to $0.5 (probably even lower as it's no longer redeemable), but the price of btc in Tether has not changed (55'000), then btc's actual price in USD will go below $27'500. because there is a finite Tether supply, it's impossible to keep the price by pumping it. basically, the loss of the stablecoin value is a direct cutoff towards cryptos' fiat value.
it's not like a regular stock market, where we trade directly between fiats and stocks. commonly, we trade crypto (
) using stablecoin, therefore, the stablecoin here is the intermediary between fiat and crypto. the exception is if we trade crypto directly with fiat, but the law is more complicated than i can think of.5. you have to pay a minimum of $1'000 per redeem request.
according to the fee schedule, you will have to pay at least $1'000 for every single redemption request (0.1% per $1m+ redemption). that means 1% on a 100k Tether. if you are a whale, this sum won't be a big deal. however, to most of us who have less than $100k immediate liquidity are rather a gigantic vault. a typical international wire transfer would only take about $60, so why would it be that much?
in comparison, USDC offered in Coinbase would not charge any fee or at least won't be that much. BUSD offered by Binance would most likely only ask for the necessary wire transfer fee.
6. what should/can we do?
i want to verify if Tether really is that backed by fiat money rather than to ruin the stablecoin, a bank run is necessary. if the price of Tether is not highly impacted under the bank run, it means Tether is a legit stablecoin.
besides, Tether should make public of what they have invested in commercial papers rather than simply coming up to deny the rumours. the denial feels like dodging to reveal the documents. similar to Elon Musk asked WFP about the exact plan of how to solve the world hunger but later they failed to answer.
if it is possible, we should move to any stablecoins that prove their cash solvency over time, to minimise any possible disaster if/when Tether collapses.
thanks to my ted talk, sorry man.
edit: removed the tag "unpopular".
edit 1: added USDC report ref + suggestion to what we could do, fee for withdrawal to fiat.
Jump to: