If Tether can’t redeem, and trades break the peg, then ultimately either exchanges go insolves or anyone holding tether has to write off their holdings. Or both.

(1) US persons and entities cannot redeem, period, so that leaves out all of Coinbase doesn't it? [edit] originally I mentioned FTX but of course they're based on Antigua and Barbuda and Hong Kong. [1 - Section 3/ and 3/3].

(2) Only individuals Tether deems as customers at their sole discretion are permitted to redeem. [1 - Section 9/ - "Tether in its absolute and sole discretion may determine that you are a customer of TIL or TLTD"]

(3) Tether may delay redemptions arbitrarily at their sole discretion. [1 - Section 3/]

(4) Tether may substitute whatever is in their reserves in lieu of cash at their sole discretion, and themselves admit to only having 3% of the cash needed to satisfy the "obligations" (and I air-quote say that because ... [1 - Section 3/]

(5) Holding tether tokens is not a claim to any backing assets. Any redemptions are strictly goodwill.

(6) Tether has identified their absconding with all the funds as a risk in their white paper [2 page 10].

This is all on their website. [1] Roughly speaking nobody has tried to redeem any - for obvious reasons. They know they can't.

To your point it's the largest exchanges with their hands in this particular cookie jar, and their fates are entwined. The exchanges are holding the bags, Binance alone has 17,000,000,000 USDT. They won't do anything to potentially upset the peg, and are incentivized to do whatever they can to maintain it. Otherwise, to your point, RIP.

[1] tether.to/legal

[2] https://tether.to/wp-content/uploads/2016/06/TetherWhitePape...

Usually you at least come up with FUD that sounds reasonable to an outsider.

Obviously many people (some that I know personally) have "redeemed" USDT for a USD wire via Tether. Tether may be fraudulent but it wouldn't have held up until now without some aspect of credibility. There are many 8 figures+ redemptions going on, sometimes multiple times a day.

I have not seen a single piece of evidence of this, and I have not seen any burns to line up with this. If you'd like to provide some I'll happily retract my statement.

For what it's worth 8 figures is small potatoes, Bitfinex literally grabbed 800M worth of their reserves one time, so we know they have some money in the piggy bank. They have some cash, but way, way, way less than they would require for a semblance of actual legitimacy.

Otherwise, everything I posted is directly from their legal page and whitepaper.

800m is still a drop in the bucket compared to the 64billion issued tether.

Also, I say "they can", but we have zero proof of this ever happening.

No-one has claimed them (and, IIRC, some are in the order of $5K USD, so not too trivial).

Show me the burns.

My point wasn’t that the redemptions routinely happen. My point was that it does matter if no one can redeem, because eventually that will cause the peg to break and USDT to become worthless.

I wasn’t arguing redemptions will be honoured en masse.

Though interestingly Tether supply has gone very slightly down since June.