USDT is a fascinating story that I can't do justice in a quick post. The overwhelming majority of crypto trading isn't carried out against fiat currency but against a Stablecoin called Tether [1]. They settled recently with the NYAG, and lost access to doing business in New York at all a few months ago. The AG says:

> “Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie. These companies obscured the true risk investors faced and were operated by unlicensed and unregulated individuals and entities dealing in the darkest corners of the financial system."

The PDF is worth a read, pretty riveting stuff [3]. At various times they were completely unbacked by anything.

All their executives aparently received target letters from the DOJ as the subjects of a grand jury investigation re: bank fraud, and since printed up another $3B USDT. Rumor has it they only have 2 actual customers: Cumberland/DRW and Alameda/FTX.

As for the ETF connection, an ETF hoping to list disclosed that 95% of all crypto trading volume was fictional in 2019 [4].

More about USDT here: [older, 5, newer, 6]. Including a great episode of This Week in Startups by Calacanis. [7]

[1] tether.to

[2] https://ag.ny.gov/press-release/2021/attorney-general-james-...

[3] https://ag.ny.gov/sites/default/files/2021.02.17_-_settlemen...

[4] https://www.technologyreview.com/2019/03/26/1206/nearly-all-...

[5] https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/

[6] https://bennettftomlin.com/2021/06/21/a-non-exhaustive-list-...

[7] https://thisweekinstartups.com/biden-targets-big-corporation...