Re:U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
by Nursie on Wednesday January 31, 2018 @03:12AM
(#16272316)
1. If there are no USD backing, why would its value stick to $1?
2. Correct, the claims are a problem. They claim backing and audits and these may constitute fraud
3. If they just print them out of nowhere they are basically printing hundreds of millions of dollars for themselves. If they aren't backed, do you think they could hold value in these circumstances?
4. These magic unbacked tokens are probably a large part of BTC price rises in recent months, and look like extra demand in the marketplace, massively distorting the BTC and altcoin markets.
Re:U.S. Regulators to Subpoena Crypto Exchange Bitfinex, Tether
by relaxed on Tuesday January 30, 2018 @05:13PM
(#16269594)
The ability to trade it in for actual currency is important. Even though their TOS says they aren't required to give you USD for tether they actually did at some point. (some say still do)
Point: USDT is used as a holding point for people wanting to stay in crypto but not be subject to price movement of other coins. This could be used to not trigger a taxable event (even though recently, crypto to crypto transactions were deemed taxable by the IRS). When buying crypto in general, it's much easier/faster to start a transfer from another crypto as opposed to having to move fiat into the "cryptoverse".
Question: Why does it matter if Tether is backed at 1:1 ratio with USD? I understand that the people behind Tether have explicity said that each USDT is backed by $1 USD. Why are the legal implications of non-backed USDT different than other cryptocurrencies whose values are based on the market? Is it simiply because Tether has claimed USDT is backed?