It was an error, and they immediately burned $5 billion USDT. Apparently they were "only" supposed to create $50 million in new tokens out of thin air, and typed an extra couple of zeroes.
I mean sure, they corrected their mistake, but surely the fact this mistake even occurred is worrying enough? Given that every USDT is supposed to be backed up by actual assets, surely there should be some sort of process of confirming they actually hold x amount in assets before they are able to just create $5 billion of fake money out of thin air? Surely there should be some sort of process of having someone else check the figures entered? It sounds like it's just one dude sitting in a back room somewhere making stuff up as he pleases. It shows that Tether's current system would allow them to print enough USDT to buy every sell order for every coin on Bitfinex and exit scam with literally billions of dollars worth of crypto, if they wanted to. That should be enough to worry anybody using either of these platforms.
Agree here. The mistake shouldn't even have been possible in the first place. I thought programmable money and automated smart contracts were supposed to detect precisely these simple mistakes. Says a lot about Tether that needed human detection to correct. We're talking about the easiest of mistakes. Extra zeroes.
Another thing though, even that mistake of billions barely affected BTC price. If anything it pumped a few notches.
