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1  Alternate cryptocurrencies / Altcoin Discussion / Before Tether's ToS revision in February, the business model relied on exit scam on: September 11, 2019, 03:41:51 PM
Tether's ToS were revised in February 2019 (see appeal to NYAG, page 16 of pdf) to allow its reserves to include credits alongside with US dollars. Before this revision, all issued tethers were contractually covered in full by USD deposits at any given time, and these deposits could not contractually be spent by the company. The ToS included a clause to allow the company to not redeem the tokens, temporarily or permanently, at its discretion.

I seem to conclude that the business model was a planned exit scam.

As of April, Tether's USD reserves cover 68% of all issued tokens. (page 78 of pdf) From page 79, distrust in Tether is claimed to provoke distrust in all crypto currencies:

Quote
The Attorney General’s ex parte, highly inflammatory, and misleading application was widely covered in the press, including an article in the Wall Street Journal. See Paul Vigna, Bitfinex Used Tether Reserves to Mask Missing $850 Million, Probe Says, Wall Street Journal (April 25, 2019) (copy attached as Ex. H). This coverage resulted in an approximate loss of $10 billion across dozens of cryptocurrencies within one hour. See Ryan Browne & Eustance Huang, Cryptocurrencies shed $10 billion in an hour on worries over ‘stablecoin’

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