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This is the main Tether thing that always worried me. That they could just mint USDT for certain customers without a corresponding deposit. This is basically lending USDT on an unsecured basis & could result in market manipulation by the recipients.

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Bennett Tomlin

@BennettTomlin

· Oct 16, 2021

We also learned that Tether started using commercial paper and other assets as part of their reserves much earlier than we had previously known. It also revealed that they would give their clients Tethers before they had actually received the wire

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Jesse Powell

@jespow

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@lex_node

Did they say the advances were unsecured? Wires can be called back even after they land. Nothing is ever “settled” in fiat banking. I don’t understand the manipulation comment. Anything *could* result in “manipulation” (whatever that means) but how is this setup special?

6:08 PM · Oct 17, 2021Twitter for iPhone

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and

secured against commercial paper issued by their customer maybe?

Benjamin Adams

@BenAdamsO_O

Oct 17, 2021

My firm has received literally billions of dollars in wires over the last two decades and I've never had one called back. And I've never been able to call one back. 🤷‍♂️

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and

Wires can be called back, but a received wire is much more solid than one that hasn’t even landed yet

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and

It literally says that they used anticipated receivables as collateral to advance Tether to 3rd parties which is the same thing as unsecured lending.

Markowsky.btc ∞/21.000.000

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and

Better than legacy banking on many fronts, even in more progressive scenarios…

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Jesse Powell

@jespow

Oct 17, 2021

The “price” is the exchange rate of BTC to USDT, not USD. USDT is not pegged to USD, has its own free floating exchange rate, regularly trades at a discount/premium, and already accounts for these dynamics. The mistake people make is thinking it’s USD.

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