Tether as Debt Security. And Tether Rich List

[bitmover]

Tether is a company.
When you buy tether, you are making a loan to that company, who promises to pay you back 1 USD for each tether you own. It's something like a Debt Security.
You basically become a creditor of that company.

You are making a loan to Tether with zero interest rate. That's a pretty good deal for Tether. So you are borrowing money with 0% interest rate, assuming all the risks, as Tether may go the bankrupt and do not pay you back. Even so, there are a few advantages of buying tether:

• Taxes- You can sell your cryptos for tether and do not pay taxes (yet). This way you can postpone your taxes in many countries(according to your country legislation)
• Convenience- You can easily move your USDT around exchanges across the globe without any burocracy and faster than you would move USD.

This cryptocurrency is closely connected to Bitfinex, as they share the same CEO. Bitfinex is one of the biggest exchange in the world. As they make a lot of money I believe they may have their Tether backed up, but I am looking forward to see the results of any real audit.

Recently there have been a lot of FUD involving Tether (USDT), but I have not seen proper warns about the risks associate with Tether Exchanges, who are the Tether's Biggest Creditors (Tether Rich List).

If you take fast glance at Tether Rich List, you will see who are the biggest creditors:

Balance(USDT)	Remark
335,068,326	Binance
293,361,358	Bittrex
230,960,153	Tether Treasury
226,752,797	Huobi
159,111,273	Huobi
153,761,528	Binance
148,519,471	OKEx
125,427,504	Bitfinex
220,000,000	Poloniex

As we can see, Binance, Bittrex and Huobi are the biggests creditors of Tether. And Binance is the biggest of them all.
I highly recommend you do not leave your savings on those exchanges, as they are like double-risk. You have the risk associate with the exchange, and the risk associate with Tether.

If tether does not pays his creditors, will Binance and those others survive?

Edit: Added Poloniex to the list.

[1714898874]

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[1714898874]

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[eminemcookie]

The tether situation isn't all that different to the financial crashes we have seen in the past in the banking industries. Commitments are made to honor the exchange of something, USDT to USD or for members of the public to withdraw their funds from banks but will this actually be the case if everyone tries to redeem their promises at the same time?

The difference is with banks it's not possible because of their business model and they loan out the capital they have from savings to profit, in the expectation/hope that a bank run won't occur. With Tether they shouldn't (who knows if they do or not) be doing something like that and all funds should be safely kept somewhere but I highly doubt that's the case. There's nothing stopping them from doing the same as banks and investing what's effectively other peoples money. Much alike to banks I think if one fails (tether) in this case there's a good chance of a big knock on effect to exchanges and other currencies.

[r1s2g3]

I highly recommend you do leave your savings on those exchanges, as they are like double-risk. You have the risk associate with the exchange, and the risk associate with Tether.

I guess, you intend to say you do not leave your savings

[maydna]

I don't use tether to secure my money and it is better to exchange with our local fiat and we can control the money in our hands. yes, I see that binance is the biggest among that exchanges and I am surprised to see this because I think bittrex is the biggest exchanges but now the biggest changes and it's replaced with binance. I think every exchange will survive for a long time as long as they can manage their sites and they listen to their customer.

[Beerwizzard]

Hm, why  Poloniex is also listed on this list (on the full version) while they don't have USDT pairs for a pretty long time? Polo doesn't have any fiat pairs for now. Also those 230 mln tokens on the treasury doesn't seem to be a part of the market. It seems like they store it in order to provide another "loans" if it will be needed.
You can also notify that they stopped creating new tokens after the investigation was started.
P.S. If CFTC will make their own audit and decide to erase Tether then Bitfinex will be probably shut down as they have the same people behind it. Think about it before making  a deposit on your Bitfinex acc.

[DooMAD]

As we can see, Binance, Bittrex and Huobi are the biggests creditors of Tether. And Binance is the biggest of them all.
I highly recommend you do not leave your savings on those exchanges, as they are like double-risk. You have the risk associate with the exchange, and the risk associate with Tether.

If tether does not pays his creditors, will Binance and those others survive?

Usually when exchanges screw up and lose their users' funds, they try to repay the losses.  I can't say for certain if the same would apply if Tether themselves screw up.  Exchanges may just point the finger and say "we didn't lose your money, go pester them".  While the exchanges are indeed custodians of those hundreds of millions of USDT, I can envision a situation where it would be the users left holding the bag.  The exchanges would still take a hit due to the fallout and general loss of trust, but I'm sure they'd happily take that over refunding vast sums that I'm sure they'd argue they aren't liable for.

But yes, funds left on exchanges have generally never looked so precarious.  It only seems to look worse after a cancelled audit and the issuance of 300 million new tokens.

Hm, why  Poloniex is also listed on this list (on the full version) while they don't have USDT pairs for a pretty long time? Polo doesn't have any fiat pairs for now.

Looking at Poloniex now and I can see 12 USDT pairs and trades going through as I type this, but you're right that there are no fiat ones.  Tether has its own tab like ETH and XMR do.

[bitmover]

Hm, why  Poloniex is also listed on this list (on the full version) while they don't have USDT pairs for a pretty long time? Polo doesn't have any fiat pairs for now. Also those 230 mln tokens on the treasury doesn't seem to be a part of the market. It seems like they store it in order to provide another "loans" if it will be needed.
You can also notify that they stopped creating new tokens after the investigation was started.
P.S. If CFTC will make their own audit and decide to erase Tether then Bitfinex will be probably shut down as they have the same people behind it. Think about it before making  a deposit on your Bitfinex acc.

Just added Poloniex to the list, as it is a big exchange with pretty much Tether. I was lazy to omit it from the original list.

[bitmover]

I highly recommend you do leave your savings on those exchanges, as they are like double-risk. You have the risk associate with the exchange, and the risk associate with Tether.

I guess, you intend to say you do not leave your savings

Thank you. Fixed!

[DooMAD]

It's difficult to tell if the day-traders are simply unaware of the increasing discrepancies, or deliberately ignoring them because they're too busy using Tether to turn a profit.  The latest uncovered shenanigans include scrubbing all reference to Tether offices based in the US from their website, coincidentally around the same period they were subpoenaed by the CFTC.  But they can't wipe the history from archive.org where it clearly lists "Offices in Santa Monica, CA" and the strangely less specific "East Coast".  There's also a really good writeup on the general state of affairs here.

[bitmover]

It's difficult to tell if the day-traders are simply unaware of the increasing discrepancies, or deliberately ignoring them because they're too busy using Tether to turn a profit.  The latest uncovered shenanigans include scrubbing all reference to Tether offices based in the US from their website, coincidentally around the same period they were subpoenaed by the CFTC.  But they can't wipe the history from archive.org where it clearly lists "Offices in Santa Monica, CA" and the strangely less specific "East Coast".  There's also a really good writeup on the general state of affairs here.

I think most of them are unaware of the risks. Some of them may think it's worth, for convenience.

If you are trading on binance and want to go to fiat, it's much faster and cheaper to just buy some tether.

[bitmover]

Since this post many new stable coins came up. Like usdc.

This is really good, as now tether does not have the monopoly over stable coin anymore. If tether , for any reason, has a problem, exchanges that works with more than one stable coin will not suffer so much. That was indeed positive in this new stable coin mania.

[madnessteat]

If you look at the monthly charts (25.12.2018-25.01.2019) with coinmarketcap, we will see that the capitalization of USDT increased by $1 684 555 987. So people do not lose faith in the USDT even after the October events and prefer to wait out the bear market in stablecoin.

[Little Mouse]

If you look at the monthly charts (25.12.2018-25.01.2019) with coinmarketcap, we will see that the capitalization of USDT increased by $1 684 555 987. So people do not lose faith in the USDT even after the October events and prefer to wait out the bear market in stablecoin.

It is because they maintain the rate. If USDT price goes high, they increase the circulating supply and bring back the stability. Same if USDT prices go down, they burn some coins for the stability. That is how they manage the $1 for each Tether.

[Velkro]

If you take fast glance at Tether Rich List, you will see who are the biggest creditors:

Balance(USDT)	Remark
335,068,326	Binance
293,361,358	Bittrex
230,960,153	Tether Treasury
226,752,797	Huobi
159,111,273	Huobi
153,761,528	Binance
148,519,471	OKEx
125,427,504	Bitfinex
220,000,000	Poloniex

As we can see, Binance, Bittrex and Huobi are the biggests creditors of Tether. And Binance is the biggest of them all.

Wow this is shocking to me. How come this exchanges are so invested in this "Tether" company? Who would exchange $1 for worthless 1 Tether? How this started? I must read about this a lot i see.
Many times "Tether" thing came across to me through reddit or other means but i never dig into it.
It seems as it could be reason for  catastrophic events.

[bitmover]

Wow this is shocking to me. How come this exchanges are so invested in this "Tether" company? Who would exchange $1 for worthless 1 Tether? How this started? I must read about this a lot i see.

Tether makes it easier for many users to invest.  Lots of people who live in different countries cannot buy USD, but they can buy tether. Tether is also interesting to avoid being taxed, and you will pay taxes only when cashing out.
So those exchanges are investing in tether because having some tether helps them to get more volume and customers

[bitmover]

bump, interesting topic =D