Re:The trillion-dollar lawsuit against Tether
by Animats on Monday November 04, 2019 @02:00PM
(#21445090)
Because there really aren't substantial hard assets behind Tether. Even Tether now admits this. What keeps this going is a net inflow of cash into Tether. If that ever switches to a net outflow, the Ponzi scheme collapses.
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Re:The trillion-dollar lawsuit against Tether
by eternalny1 on Monday November 04, 2019 @08:14PM
(#21448659)
Since Tether can't back the 1/1 USD in an actual bank (due to banking regulations), they have to park that money somewhere.
If they are parking it in other cryptocurrencies, then they have to ensure that the value of that particular cryptocurrency does not fall below the average price they had to buy it at (to ensure they can redeem).
So if, for example, Tether has had to buy Bitcoin and the average of all those purchases came out to $7,500/BTC, they have to ensure that BTC doesn't fall below $7,500 now because otherwise they end up net-negative.
At least from what I can gather.
Re:The trillion-dollar lawsuit against Tether
by teknopurge on Monday November 04, 2019 @02:46PM
(#21445637)
Where does Tether admit this?
Re:The trillion-dollar lawsuit against Tether
by JumpCrisscross on Monday November 04, 2019 @03:02PM
(#21445826)
> Where does Tether admit this?
A New York State court filing [1]. (They’re under criminal investigation by the U.S. and New York.)
[1] https://www.bloomberg.com/news/articles/2019-04-30/tether-sa...