It's perfectly reasonable to assume $600 million has flown in via Taiwan. Note that that doesn't mean that local Taiwanese have personally bought $600 million. Tether creates an arbitrage opportunity. If you have a Taiwanese bank account, whenever Tether gets out of sync, to say, 0.99, you can simply arbitrage that away and make a risk-free profit. That is what is happening. The demand isn't coming from Taiwan per se, it's coming from arbitrageurs (who either are Taiwanese, or are using someone who has a Taiwanese bank account).

No one is going to deposit 600 mill in a hacked exchange via Tether crypto-Hawala using Taiwanese shell bank accounts.

People with real money would instead wire the funds to Gemini or ItBit or even a terribly managed company like Coinbase.

KISS

You sound like you are living in the US, and everything is simple there and works as described. Which is probably true for you, as I understand those are exchanges catered towards US customers. However the mistake is that you assume that the rest of the world (majority) works the same way.

What's wrong with Coinbase? (I ask as a naive fool with a bit of money stored there).

Bugs. I have discovered two bugs personally, reported them to Coinbase, and those are still unresolved.

For context, I reported couple of bugs to MtGox back in the day, and even MtGox fixed them in under a month which is more than what I can say for Coinbase. I guess this is what happens when Coinbase speed-hired 100 people in one year with no proper team-building exercises.

Mostly that if anything goes wrong their support tends to be incredibly unresponsive. Also make sure you're not using SMS-based 2-factor authentication with them since there's a long history of people getting their phone numbers stolen and then their Coinbase accounts drained within minutes.

> tends to be incredibly unresponsive

Correction, there is no support. I have a bit of money permanently locked in a coinbase account because their support does not reply at all.

At some point I will just have to convert it all to BTC and send it elsewhere. Caveat Emptor.

I had the same experience. Got locked out of 2FA, spent two weeks waiting for a reply from support, only to be told that I should just make a new account. Unfortunately I haven't found an easier option for buying BTC.

I had the opposite experience, though this was before Coinbase created/supported recovery codes for 2fa. My phone with the 2fa app bricked and it was a painless, one-message exchange with Support to work around it, completed in < 1 business day.

I can confirm: my 2FA has been hacked on Coinbase. My Social Security number + DOB are out on the internet, and it makes it trivially easy to hack companies with poor security protocols like Coinbase, Authy, AT&T, TMobile, Comcast, Yahoo.

Noted.

On the account draining -- well, there's a latency in setting up new bank accounts there. So I'm surprised it's that easy to just yank money out.

Although I did notice there's no account verification. For example, on Vanguard or other platforms they do a small deposit of a few cents and ask you to verify the payment amounts, a process which has a latency of a day or two.

Ah, so people just yank money out by sending it to some wallet. Makes sense.

Are there any ways to make coinbase safer other than a very secure password?

Software-based 2FA, rather than SMS-based.

You mean Google Authenticator? I have this enabled in addition to SMS.

Right. See if you can disable SMS-based 2fa and only use the app.

Well, thank god their two-factor has always failed to setup for me.

Never store money on an exchange. Once you are done trading, get it out of there.

No one person would deposit 600 mil at once, sure. But they don't have to. It's many people collectively depositing 600 mil over a long time.

Sure “No one”, I don’t think the same necessarily holds for many.

I once wired $30k USD from my UK to Taiwan bank account.

It worked fine, but had to go into the bank in person with ID to get the funds approved.

Not sure what it'd be like if I moved $100ks.

* risk-free (except for counterparty risk)

Their curious verbiage makes me think it's not USD. They say they have backing "assets" my guess is they mean BTC, which conveniently gives them more "value" the more they print.

> Tether is lying and printing tokens out of thin air.

$600 million bet — literally.

They can also peg the value using BTC. Basically they just buy using their dollars/fiat some BTC, deposit it to exchanges, and then using some simple bot beg the value of the USDT to USD with bid orders. And vice versa, they can have some USDT on exchanges and have ask orders so that people can buy USDT using BTC. If there are more buys than sells, then they withdraw the BTC and sell it for dollars/fiat.

They don't need to do that on that many exchanges to have effective peg to USD. However they of course still need traditional bank accounts, and they need to trade the BTC on OTC markets or somewhere else.