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A comment on The Tether Ponzi Scheme. Parent comment

Re:The Tether Ponzi Scheme by mvanaltvorst on Wednesday May 19, 2021 @05:18PM (#27214580)
Yes. However, if you and the rest of the world want to at the same time, you cannot. This is a known risk, normal banks suffer from the same problem. However, normal banks are strictly regulated, and will receive a bailout to make sure your life savings do not vanish in thin air. Tether does not have such guarantees, so you will have to solely trust Tether foundation to prioritise your money over their profit.
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Re:The Tether Ponzi Scheme by rglullis on Wednesday May 19, 2021 @05:29PM (#27214722)
You are not wrong, but you are making a false equivalence between Tether and banks.

Banks have fractional reserve because they take their customer funds and reinvest, make loans, etc. So they will never have one dollar in their vaults for every dollar they get deposited from their customers.

Tether is not doing any of that, they are just minting ~1.3 USDT for every USD they get deposited. What they are doing is criminal and should never be accepted as "just a known risk".

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Re:The Tether Ponzi Scheme by qeternity on Wednesday May 19, 2021 @05:26PM (#27214672)
No, you can’t. And their TOS state they have zero obligation to do so.
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Re:The Tether Ponzi Scheme by reedjosh on Wednesday May 19, 2021 @05:28PM (#27214707)
Although the fractional reserve requirement has been dropped to 0% recently.

https://www.eidebailly.com/insights/articles/2020/4/federal-...

So there goes that regulation. At least there's FDIC?

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Re:The Tether Ponzi Scheme by kmonsen on Wednesday May 19, 2021 @06:49PM (#27215507)
Customers of regular banks doesn't suffer from this. In the US the treasury, or more accurately fdic, will protect the first 250k of each customer account.
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