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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

Oct 17, 2021

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?

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Replying to

and

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.

7:25 PM · Oct 17, 2021Twitter for iPhone

Replying to

and

Doesn’t listing it on kraken give it (perhaps unwarranted) legitimacy to the idea that it is equivalent to usd?

HugoS

@BitcoinHugo

Oct 17, 2021

Not trolling, I get your point… but I think the mistake you are looking to clarify in this tweet is as a direct result of exchange listing it. “ It must be trustworthy, kraken must have done their homework and would’nt list it if not..”

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zkyoda.eth

@chainyoda

Oct 18, 2021

I think the question is what happens if a large USD depositor defaults and USDT never receives 10bn USD for the 10bn USDT that got printed