If 74% is what Tether is claiming, then the reality is probably less.

They’re claiming 74% “cash and cash like securities”, which is one hell of a caveat. We know that they’ve “loaned” 900m to Bitfinex, a company run by the same people as Tether. My bet is that some of those “cash like securities” are unrecoverable “loans”.

Cash-like (or cash-equivalent) securities is a common expression in accounting and indicates highly liquid securities that can be liquidated in short term (less than 3 months usually). "These securities have a low-risk, low-return profile and include U.S. government Treasury bills, bank certificates of deposit, bankers' acceptances, corporate commercial paper and other money market instruments" (from Investopedia).

I know, I just think they would lie about it. It’s not like they have had any qualms about lying continually.

I was reading through Apple’s 10K, and they define cash like securities as being highly liquid and having a maturity in less than 3 months.

Apple shouldn't have to suffer the horrible fate of being even implied in the same conversation as Tether/Bitfinix as far as reporting standards and corporate trust go.

Conveniently enough, it works out that they're about $740 million short of their obligations. That's a lot of money.

Maybe Deutsche Bank will step up and loan them some money since clearly nothing shady is going on.

If only some scary entity with far reaching powers could make everyone scared enough to make a run on the Tether bank...

They’ve been lying for years and are only admitting they’re not fully backed now because they got caught. Who knows how much they’re really missing.

Glad it's been brought to light, but does seem to be a problem that is solve-able.

This is assuming that the stated 74% number is true. Fool me once...

If it's a fake number, it's an interesting choice.

They aren't claiming to be 99% or 90% backed, which would be similarly disbelieved by the same people who disbelieved the 100% claim.

Suppose the real number is 3%. 74% sounds pretty good as a way to soften the blow a bit. It would be best to let the air out over a matter of weeks than minutes.

I feel like there could be a lot of real numbers that are much bigger than 3% but still devastatingly low. 10%? 30%? 45%?

Also, do they break down the composition of that backing between "cash" and "short-term securities" anywhere, and how many of those "short-term securities" are real assets like T-bills, and how many are unsecured debt that there isn't the money to repay?

74% could be a "real" number ... but it could still be the case that there is only cash to cover 10% of the existing Tethers, and the remaining 64% is loans to companies that can only repay that ten cents on the dollar.

Ditto this.

I thought it would be like less than 50%