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To my understanding Tether is the cryptocurrency created and backed by Bitfinex. If they become bankrupt and stop operating as an exchange what will happen to all the tethers in circulation? Will it all lose value also? Will Bitfinex have the responsibility to exchange them for real us dollars?

That will be something very interesting to see. As of today, Tether has been declining in price making it loose its peg to fiat USD. It seems that we cannot trust "pegged cryptocurrencies" like Tether and Nubits since they will turn out to loose its peg at some point. Take a look at Nubits, it seems that it will take a long time (if it will) to recover.

The only pegged asset left is bitUSD. Let's see if this one fails too.  ::)

Why would Tether become bankrupt if BitFinex goes bankrupt? They are just shareholders

not exactly bankrupt but price crash.
whats the point of a pegged crypto if it cant keep 1:1 with fiat?

you can always change Thether $s against real $s, so the price atm is not justified and should be arbitraged, The reason this is not happaning is because there seems a myth going round that if Finex bankrupts Tether will also. As soon as USDT-USD is back on Finex this should normalize

There is also poloniex supporting USDT and also bittrex have Tether, but it is true bitfinex was one of the large shareholders in tether. Tether to USD price seem 1:1 if we see price of bitcoin in poloniex and other exchanger which support real USD trading.

I think the fiat for the peg isn't stored with bitfinex, and is not cryptocurrency, but fiat. Essentially, the hack shouldn't affect this, they are related but different things.

If all the tether.USD holders decide to cash out in fiat will their supply be enough? Or if Bitfinex closes down, now who will be the institution responsible for backing all the tether? If there is no confidence then I could see Poloniex and the others delisting it. Now how will the holders cash out?

Tether website says things about transparent audits, etc, yet there is no information about this provided there. Based on this and how most things in crypto end up, I'd say odds are better than 80% it all ends in disaster.

Their https://wallet.tether.to/transparency page for sure is kind of a joke. I mean, what transparency is this? Everybody can put those numbers in a page. where are the documents to prove?

If tether wobbles and dies, I will not be surprised... ::)

Bitfinex might not last long if their customers leave because of the lack of confidence and trust in them. Tether holders should unload their shares to avoid losses. It is all becoming clear now.

so far bitfinex has came back and if you look at the daily volume on their site or even checking out coinmarketcap the section on bitcoin, you can see that it is already on top and last time i checked bitfinex is the second highest trade volume.
which is strange by the way!

People are relying on the 'lightning doesn't strike the same place twice' thing I guess. After shapeshift got its series of hacks, I can't trust in that too much. Although they might have changed some shit on the back end, I think they came back a little too soon. But for the brand's sake I understand, you don't get to go dark for too long  in this space without losing user confidence. The assumption of bad faith is expected here, this is crypto.

yep. done

Exactly. That would limit our options to hedge our Bitcoins against the dollar. So, until now there is no way to protect against crypto volatility (as far as I know) thus, it would be advised to proceed with caution. Thank goodness that Tether, is back to $0.99 (near the $1 mark) but still this is something that could change anytime. I just hope that a stable crypto will have solve these issues, probably backed by the government. Just my opinion.  ::)

I can't bring myself to like the idea of a pegged anything. a peg implies that there's a point of failure or potential for scamminess somewhere along the line.

when you include the evil triumvirate of crypto, dollars and peg then i'm gonna run a mile and never look back. there is no one competent, honest or well capitalized enough in this space to make something like this inspire confidence in me.

price is like 0.9999, which is justified since it is not the "real dollar"; before I can "buy someting with it" there is work involved.

It is hard to trust what they are saying after the hack. I do not think the Bitfinex CEO is qualified to run an exchange. I will say again if Bitfinex will go under, what will happen to tether when the people responsible are hiding and cannot be seen? Tether is not trustless therefore it is dangerous.

Exactly. That is why it is best to proceed with caution when investing into a pegged asset. It seems too risky and at any moment, Tether could head the same direction as Nubits in price. This last one will probably take quite some time to recover (if it ever will) to its promised pegged value to 1 USNBT = $1

That is why, I have looked into other options to hedge my BTC to fiat such as Coinapult's LOCKS feature. This seems very promising, but just in case I will proceed with caution.  :)

@Abiky, I am curious. What happened with the peg of Nubits? Did it not hold?

Turns out to be an issue (or a discourse) between the Nushares holders that decided to sell and caused the price to lost its peg. Now, USNBT worth $0.67 USD. You can look more about in here: https://steemit.com/crypto-news/@steempower/nubits-not-a-price-stable-currencies-and-bc-exchanges-nbt-based-development-fund (https://steemit.com/crypto-news/@steempower/nubits-not-a-price-stable-currencies-and-bc-exchanges-nbt-based-development-fund)

Hope this helps.


By the way, I have found a better idea to keep a close peg to the USD and that is by exchanging my BTC to bitEUR. As nowdays, the EUR is worth more than USD this would be a safe haven. (even though it decreases in price a little since it will still be around the $1 USD mark)   ::)

True. Better to stay away from this situation.

How do you all on this thread feel about tether a year later? Bitfinex is the largest exchange and I don't see why they would want to forfeit that position when they've seen the repercussions.

Does not and should not change a thing about how we should all treat exchanges. No matter how big they get. No matter how great and trustworthy they seem to be,,, never trust any of them with your funds. We all know they will do their best to hold their promises and backings for Tether. We also know this is only true until their business sense stops.

And what do you think now about tether? After all this manipulations with fiat money on different exchanges.
What is the best crypto-fiat pair?
For examples today, tether has just printed out another 300 millions of USDT. I don't believe that they can provide it with real fiat money.


https://pp.userapi.com/c847123/v847123404/6690/Y4IyLF5reaI.jpg

But Tether still doesn't have a public bank account, which worries me.
Because Tether companies can now issue more tokens, we don't know if their bank accounts have so much money.

The US Department of Justice has initiated a check on the fact of possible bank fraud of the leaders of the company Tether, which is behind the largest USDT stablecoin. According to the publication, the authorities are interested in the early stages of the company's activities. In particular, federal prosecutors are investigating whether Tether hid cryptocurrency-related transactions from banks. https://www.bloomberg.com/news/articles/2021-07-26/tether-executives-said-to-face-criminal-probe-into-bank-fraud?srnd=premium-europe

I don't think that the price of USDT will decrease or increase, because many people are using it as a stable coin and use it for buying any coin in the dip. If the USDT becomes unstable then many people can get a big loss.

First of all that won't matter in the next 10yrs hahaha  ;D ??? fact is Bitfinex and Tether have the most liquid market in the crypto industry. The latest FUD in the crypto scene about Tether is baseless and only meant for witchhunt IMO, this year, Tether got cleared, how about that ??? . For me, Tether has been my most used currency both as a store for a stablecoin and my most used coin for Earnbet  (https://game.earnbet.io) casino. It will remain this profitable for a long time IMO

Iit is not possible that usdt price will decrease or increase. I think its price is constant but, If usdt will decrease many people will be got a big loss so I think it is not possible

As we can see today that the price of tether is very stable and not much lower than the real dollar price.
Tether will not go bankrupt or disappear forever because the price of Tether is always stable following the dollar price, in my opinion Tether is a coin that is always there like real dollars that will not go extinct.

There have been numerous controversies surrounding tether stable coin. As we can see, these thread is an old tread and these controversies were there as far back as 2016. Personally, I am impressed with what tether have done for cryptocurrency so far, it has help to hold values and take opportunities that would have been otherwise imposdible!  As for the investigation open against tether, it is left for investigators to do their work. Only a court of apropriate jurisdiction can declare a virdict of any wrong doing if there is any!

USDT is a coin whose value is the same as dollars in real life, so that value will always follow the base value of the dollar and it will not be possible to go down like other coins, that's why USDT is said to be a stable coin and is often used by many people to save their assets before making another coin purchase.

USDT Tether is a stable cryptocurrency that has well performed to date...

I'm still wondering..if USDT is a stable coin that uses $ circulation in real life, what will happen to Tether when the US officially wants to issue their own USD cryptocurrency, will other stable crypto coins be sue.

what makes it stable though?
in theory it is the possibility to exchange it to real (backed up) USD.
in reality afaik this is not possible.

Read this information
https://bitcointalk.org/index.php?topic=5247581

And read this article:
https://muellerberndt.medium.com/is-tether-a-black-swan-51095720b01c
Is Tether a Black Swan?

Use various stablecoins to store your crypto savings, not just USDT. It is very risky to hodl all coins in USDT.

You're right, but there are not so many reliable stablecoins. Alternative coins are USDC, BUSD and DAI. Other similar coins lack liquidity for comfortable trading on cryptocurrency exchanges.

To be honest, I do not believe the USDT will collapse in the foreseeable future.

Law enforcement agencies have been watching Bitfinex-affiliated Tether Ltd since 2018, trying to accuse them of various frauds. I heard that the company recently paid over 18 million dollars to settle claims from the New York State Attorney General. The current lawsuit focuses on the nascent days of Tether Ltd and relates to the bank transactions performed in 2017.

It seems that governments have finally realized that stablecoins are real competitors to the fiat money they issue. Thus, they are trying to cause different troubles for the top-rated stablecoin. We may soon hear about new accusations against USD Coin, Binance USD, etc.

Actually even fiat-pegged stablecoins like Tether and USD coin can sometimes deviate from their original price. Just look at the USDT chart in 2019. It was below 0.97 at some moments.
It happens when people trade more actively than usual, but, as a rule, it is fixed by arbitrageurs quite quickly. Also stablecoins collapse when people stop trusting them. But I hope it will not happen to Tether, as according to audits its company has required collateral.

that's why I asked what makes them stable.
they are not realy stable.
it's just that offer and demand are pretty balanced, because there is no reason to hold them for gains.
this makes them kind of stabe, but there is no garantee. if for some reason people want to get rid of them one day the price colapses

If Bitfinex goes down the drain, it'll be the end of Tether as we know it. That is if another company doesn't adopt Tether as its own. My guess is that once Tether loses value, most crypto assets will crash. That's largely because the crypto market is directly tied to USDT (although Bitcoin is still the reserve cryptocurrency of the market). It'll take quite some time before everything goes back to normal.

There are many stablecoins on the market right now, so if Tether goes down, another one will replace it. USD Coin seems like a great candidate due to its high liquidity and mainstream acceptance. I don't think Bitfinex will be responsible to pay back its investors in US Dollars if it declares itself bankrupt (I'm not a lawyer anyways). There will be big losses (and lawsuits) if that happens, since many investors will lose money big time. That's what you'd get when you trust a centralized stablecoin like Tether. Only time will tell us how everything will unfold as governments impose regulations against the stablecoin industry. Just my opinion :)

what could be the reason why bitfinex will die?

i always thought usdt is too big to fail. and there were cointelgraph articles that tether was being investigated and its audited which they do have thee real usd reserve.

before tether will fall i think we'd all be warned to be able to move to another.

It will be eventually turn out to be one of the biggest ponzi schemes in the world. They do not even have more than 5% of their money in cash, which means that the moment everyone of us end up cashing out our money you will see that the price of it will slowly start to go down and that is what the main problems seems to be because it can't go down in price, it is stuck to 1 dollar and if it really drops and nothing is done about it, then we are going to end up seeing it crash, if you do not cover it under 95 cents, then it might as well be 1 cent as well.

I have always said that these are criminals doing a criminal job and they should be arrested, this has always been the case for me, and they are not even properly audited neither, which is why I will never own any USDT at any point, only small amount that I am sent after a job but I cash that out right away.

whats up with that too big to fail talk?
no country will inject money into Bitfinex to safe the crypto comunity.
who you guys think would safe it? serious question

This is actually an interesting point you are bringing up here. If Tether was backed by a bank, it would indeed might have been bailed out by a government. Now that it is a crypto company, governments will let it die with enjoyment. That's where the hostility comes into play towards cryptocurrencies. These bank bailouts back at the time were a big fat joke because it is not like the whole banking sector changed afterwards. They are still trading faulty products, selling that stuff to people who have no clue what they are buying.

the thing is, it is NOT system relevant. it wont cause a snowball effect for the general economy, and the crypto economy is not realy relevant

I guess you are right here, but what isn't systemically relevant today could still become systemically relevant in a couple of years from now. If Tether doesn't fail for some reason over the next couple of years, I can very well imagine how it is going to turn over trillion per day, not billions anymore. It might be accepted by merchants who have and more Tether on their balance sheets because it's easy, cheap, and stable. It might become relevant by then.

If Tether goes down i am sure they will file for bankruptcy and anyone who is holding the coin will not be getting anything and in the next 5 years if they are able to survive i will be surprised. They have a court hearing in 2022 and will see what will happen during the hearing and the biggest problem is their transparency and they have not even pegged with US dollar as only a small percentage is pegged with US dollars.

I do not think that if bitfinex were to fail or interrupt activities tether will disappear , many other exchanges use it at a widespread level, perhaps there would be fluctuations in its value and that is all

Tether's circulating market cap is 62 billion USD right now. I think that if there is something fishy going on with Tether, Bitfinex would be in a hell of trouble. They might be among the largest holder, but I doubt they have tens of billions of USD they could just liquidate within moments to cover any problems that might arise. I could be wrong though, maybe they are that huge and hold 5% or even more of bitcoin, but who knows.

Tether is the third-biggest cryptocurrency in the world by market value. And it's got some economists — including an official at the U.S. Federal Reserve — worried.

Last month, Boston Fed President Eric Rosengren raised the alarm about tether, calling it a potential financial stability risk. Meanwhile, some investors believe a loss of confidence in tether could be crypto's "black swan," an unpredictable event that would severely impact the market.

If bitfinex faces any problem, then I guess tether will be dumped at first hand regardless of it is a stable coin. (Yeah, even a stable coin do fluctuate in exchanges according to supply&demand).

There have been many similar topics about the dangers of depending on a central entity for any purposes but hardly this community or entire crypto space learned anything out of that, it seems. Some times back some one conducted a naming contest for a decentralized stablecoin. I mean a truly decentralized stablecoin must be a permanent solution here rather than simply making use of tether with a secondary thoughts.

Most of the founding organizations of crypto maintain long-term banking relationships, whereas Tether seems to have a hard time doing so.
In recent times, Tether has experienced volatile movements and this has made investors worried.
some investors are concerned that the issuer of Tether does not have sufficient dollar reserves and that Tether is starting to become unstable.

The same thing that happened to other scams. It will keep scamming people till there is nobody left to scam.

I was mad af when their balance sheets became as big as $9b and they are now above $60b. Not only that I believe coinbase and busd are also as scammy as tether. Now they are getting bigger because it looks like tether cannot get any bigger anymore.

New and interesting to speak about Tether. My question is, why it should fall under bankruptcy. A stable cryupto currency, used by vast traders to hold their crypto value stable in crypto wallet, has more rooms to circulate it and keep it more live, what makes you to think it would fall into bankruptcy. Just curious to know. I am a trader and i do always trade coins with USDT pair. I would be the one who will be disappointed if tether is not in the market.

If you knew how the developers earn money for every coin they add in the market and the promise they give you is that all the coins that are in circulation is backed by US Dollar and now it is clear that less than 10% is backed by dollars and the rest are held in other assets that are risky in nature. What do you think will happen when the risky assets goes to zero and what would be the valuation of the USDT you are holding.

Many people including myself have had this concerns for some time now, and me personally have limited my use of tether as many articles I read online on how it's likely to fail and also coupled with the rumored issue it has with the US government, I don't trust this crypto currency anymore but we just can't still ignore the fact that it's still one of the most popular and most used stable coins in crypto currencies so far.
The conclusion of the matter is that, if you don't feel secure in its usage, then better to avoid it and look for some other trusted stable coins to make use of, money is hard to come by this days and shouldn't be risked on untrusted crypto coins.

Absoutely, and considering it from the angle of its practicality, it plays a very vital role for cryptocurrencies and exchanges. I thought when 'I first read that one of the big Bitcoin pumps could have been facilitated with non-backed Tether that that hypothesis or allegation, whatever you wanna call it, does make a lot of sense. Imagine you are sitting on tons of Bitcoin and you have this printing button at your disposal because you are the company behind Tether, how tempting must it be to just push the button, use those freshly printed Tether and pump Bitcoin straight to the moon, sell your Bitcoin at crazy prices and then buy back the Tether with your profits such that nobody gets angry and asks for further investigation. Seems to be a decent plan to me.

What percentage of the potential for Tether to go bankrupt, and what percentage that Tether will be adopted on a large scale. I think the dependence of altcoins on Tether is currently very high, so the potential for bankruptcy is very small. Even if it goes bankrupt, most of the altcoins will go bankrupt. When did Tether go bankrupt, and what was USD for? Tether will lose value if inflation occurs in America, so the USD loses value, and Tether will also lose value. It is impossible for Tether to maintain such a high selling value if the USD drops.

I don't think inflation will negatively impact Tether's place on the market. Bitfinex manipulates the stablecoin at its own will, so there's that. Besides, the vast majority of cryptocurrencies rely on Tether these days. For it to go down, something big must happen. I think a full government crackdown will be the only thing that will bring Tether (USDT) to the ground. No matter what happens with the stablecoin, the crypto market will survive thanks to the decentralized nature of Blockchain tech. There are plenty of other stablecoins being actively traded across exchanges these days, so if Tether goes down, another one will replace it. What's important is decentralization and censorship-resistance. As long as crypto meets with such criteria, nothing else matters. Just my thoughts ;D

If this happens to Bitfinex while we know that Bitfinex is a big exchange platform, of course the impact if they go bankrupt is huge on Crypto prices because there will be fundamentals there and for Tether it looks like it will also experience that impact, will Bitfinex be that easy to go bankrupt ? I find it very difficult to imagine if Bitfinex should go bankrupt.

I am not sure if it is written in the rules of Bitfinex that they can’t use Tether’s collateral for repayment of debts. Anyway, in case this company becomes bankrupt, Tether is also likely to collapse as bad news always has a big impact on everything in the crypto market. People can stop trusting Tether, they will sell it off and the price will drop. On the other hand, I believe that Bitfinex has declared collateral that it can't spend anywhere, so we can be calm.

But I think Tether will be fine as long as they are able to cover up the wishes of the SEC. Because most crypto is currently under SEC surveillance. While Bitfinex alleged manipulation of stable coins has become an open secret, until now Bitfinex has not explained the allegations. These are just my thoughts. Because after XRP, and now Uniswap is an SEC target. Why is Tether still safe.

the potential for tether to fall can happen, it all depends on the crypto market.  besides that, the internal team from tether is also an influence.  I think the most important thing is that tether must be consistent 1:1 with fiat because that's the purpose of tether and don't change positions or change prices.

Tether is fiiiine. Stop the Fudding.

They audited themselves and declared that they have the backing for every dollar in their $68b portfolio. Why make it a big deal now? Haven't you learned anything yet? Tether is as solid as a rock. It will not go down.

 ;D

People are worried about the current growing supply of Tether. So that someone's suspicion on the USD reserves owned by the owner of Tether. I think the suspicion is something reasonable. Because these digital assets are also under the supervision of certain institutions. If troubled then those holding Tether also suffered losses. Or there is another mission behind this liberation. ;D

I don't think bitfinex loses the USDT tether it won't follow the crash. USDT slowly experienced a decline in price and market cap. but USDT is always compared to fiat. it's just how the USDT team is responsible for doing the best for the future of USDT if Bitfinex leaves it

I wouldn't get my hopes high yet. After all, Tether is a centralized stablecoin subject to manipulation, fraud, and corruption. It's like "Banking 2.0" if you ask me. There will always be the risk of loss, due to the way Tether was designed. What's stopping the issuer from running away with the money or closing up shop? Or what's stopping the government from taking down Tether in its entirety? For what I know, nothing lasts forever. You're better off cashing out your crypto to Fiat than exchanging it to a centralized stablecoin like Tether. The risks are simply too high to bear. Expect many USDT holders to go "rekt" if something bad happens in the future. With or without Tether, crypto will be here to stay thanks to its decentralized and censorship-resistant nature. Just my thoughts ;D

I have hesitations with tether when they admitted last 2019 that they were not fully backed with USD assets.
It is good that up until now, after 5 years the OP posted this thread, tether is still standing up.
But I won't suggest to hold this for long term because one mistake from the Tether team or major hacking and we may see this crumbling.
Just keep your funds safe and as much as possible diversify your portfolio. We can't trust them to fully respect their promises.

I thought when it comes to such matters the entity has to distinguish itself from the product, especially  that they operate in an ecosystem which is mainly decentralized. By the way coming back to the topic they are two different entities altogether and besides tether might have some centralized structure built around it but decentralization has to kind of lead here...it can run on auto pilot.

Now am also starting to think of Bnb and Binance since they are in the same bought would the bnb coin go down if Binance was to go down....I guess

there are cases that make bitcoiners doubt about tether. but until now tether still has high confidence, has a large market capitalization and is still at the top of coinmarketcap. therefore if you see the tether function only as a temporary shelter, especially for a trader, then we can do many ways to secure our funds, especially now that there are several stable coins that can be used

That's right and it doesn't look like the case at hand has made Tether lose faith,
I think until now Tether is still a good coin stable so I have no doubts,
but apart from that everyone has a different view of Tether

The Federal District Court for the Southern District of New York, represented by Judge Catherine Polk File, rejected half of the claims against Tether and Bitfinex in a class action, including all claims under the RICO Law. A class action lawsuit was filed by a group of investors in October 2019, where Tether, Bitfinex and a number of top managers of companies were accused of violating the US Commodity Exchange Act, the RICO Act, money laundering, Pump & Dump schemes, market manipulation due to the issue of USDT and deliberate deception of investors, the claims then were in the amount of $1.4 trillion. https://tether.to/ny-court-dismisses-half-of-class-action-plaintiffs-claims-against-tether/

That's nocoiners talk. I think you watched too much anti-crypto conspiracy videos on youtube. People have been saying the same shit for years and yet tether is still going strong and kicking nocoiner ass.

Think about it, if what you said was true, if tether was running as ponzi scheme that is as big as Madoff's, don't you think the SEC would intervene and jail the bad guys if there was something shady?

i'm not sure if bitfinex goes bankrupt tether will go bankrupt, the concept of tether is to be a stable coin. maybe tether will lower the price but still carry the concept of a stable coin in crypto forever. besides that the tether market is also big, it won't be easy for tether to experience a fall in a short time

The risks are simply to high to ignore. Tether may have been standing for a long time, but that doesn't mean it's "invincible". As I've said before, a government crackdown or a massive hack could put an end to Tether for good. People are foolish enough to trust their hard-earned money on a centralized stablecoin subject to manipulation, corruption, and fraud. Trusting Tether is no different than trusting banks (but even worse). Crypto behaves in many strange and bizarre ways, so no one can exactly tell what will happen with Tether in the future. What's important is to diversify your investment into other crypto assets in order to protect yourself from the risk of loss. As long as you do that, you'll have nothing to worry about. Just my thoughts ;D