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A comment on BitConnect Closes Exchange as States Warn of Unregulated Sales. Parent comment

Re:BitConnect Closes Exchange as States Warn of Unregulated ... by dom96 on Wednesday January 17, 2018 @08:33AM (#16167711)
I'm by no means an expert, but I'm wondering why the people responsible behind Tether do this? Why don't they ask people for a dollar for each Tether coin and then store those dollars indefinitely, wouldn't that guarantee that the currency is pegged? They would always be able to exchange the Tether back to a dollar.
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Re:BitConnect Closes Exchange as States Warn of Unregulated ... by Nursie on Wednesday January 17, 2018 @09:30AM (#16168105)
>> Why don't they ask people for a dollar for each Tether coin

AFAICT they cannot bank in dollars at the moment, which is where the origins of the tether currency lie in the first place. They say that theey have the money to back it... but given they minted a quarter billion over the last three days seems a little less than credible.

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Re:BitConnect Closes Exchange as States Warn of Unregulated ... by jonknee on Wednesday January 17, 2018 @10:04AM (#16168421)
It turns out to be a lot more profitable if you just make USDT out of thin air...
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Re:BitConnect Closes Exchange as States Warn of Unregulated ... by rednerrus on Wednesday January 17, 2018 @11:07AM (#16168997)
It also drives the price of BTC up if you use those imaginary USDT to wash trade BTC. This is beyond a shitshow.
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Re:BitConnect Closes Exchange as States Warn of Unregulated ... by lmm on Wednesday January 17, 2018 @11:41AM (#16169337)
> Why don't they ask people for a dollar for each Tether coin and then store those dollars indefinitely, wouldn't that guarantee that the currency is pegged? They would always be able to exchange the Tether back to a dollar.

They could do that, but why would they when they can instead ask people for a dollar for each Tether coin and then spend those dollars on crack and hookers?

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Re:BitConnect Closes Exchange as States Warn of Unregulated ... by PeterisP on Wednesday January 17, 2018 @09:46AM (#16168234)
Well, someone might do what you describe - or, instead, they might say that they will store those dollars indefinitely but actually spend them. Why should they care about being always able to exchange the Tether back to a dollar, when they can simply take the cash instead?
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Re:BitConnect Closes Exchange as States Warn of Unregulated ... by empath75 on Wednesday January 17, 2018 @12:54PM (#16170088)
They don’t have any access to banking.
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