How safe is USDT?

[Akash1243]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).
But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

[hosseinimr93]

There is no proof that the issued tokens are backed by real dollar. I wouldn't be surprised if a day USDT tokens lose their value.

The other problem which makes USDT so insecure is that, your tokens can be frozen even at your non-custodial wallet.
For more information about this, I recommend you to read the topic created by mk4. Visit the link below.

[UPDATED] PSA: Most Stablecoins Can Be Frozen, Even in Your Own Wallets

[manok jepang]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).
But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

I think all coins have the same risk as USDT, because investing in crypto is a very risky thing, but I am very optimistic that USDT will survive and will continue to make the best contribution to exchange with other altcoins, currently I have never received the problem at all when using usdt as a transaction tool, in my opinion the first step to find out whether a coin will fall is the amount of FUD news,

[casperBGD]

well, USDT is safe as whole crypto industry, if they go down, broader crypto industry will feel it certainly
with that said, I tend to have several stablecoins, that I put my money in, to diversify the risk

there is also DAI, as algorithmic coin, but also AMPL that should be connected to USD in 2019, but obviously have difficulties to hold peg, since there are +/-20+% fluctuations on price

[Doell]

I don't keep usdt for a long terms ,prefer fiat currencies as usd to save money for a long terms in the "market" but not for long also only a few weeks maybe 2 months ! the point is that I don't believe in anything except bitcoin ,it has been post by @hosseinimr93 regarding usdt which means it is clearly very unsafe to save usdt for a long terms "frozen" which means it can't be used if you need it ,whether it can be unfrozen or not I didn't look deeper into usdt

[vv181]

That is exactly what most people concerned about USDT. Tether has a lack of transparency to audit their reserve fund to match their issued token, and people should be cautious not only by that but also by regulatory issues. I think that there is no way to be able instantaneously to check whether their token matches the reserved fund or not. So I don't think there is a way to find that happening in real-time. So, I think what most people should beware of and think it as a red flag is that USDT has a counter-party risk within it.

[timerland]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).
But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

Not safe.

You are much better off if you even just opt for DAI or USDC instead of USDT.

Tether has a track record of fractional reserves which is the exact opposite of decentralized cryptos mantra. It is essentially an interest free loan given to Tether without any protection/collateral for the people who are holding the USDT.

[Kavelj22]

But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

This is the problem for all the stable coins in the crypto market.
First created by Bitfinex exchange, if i am not wrong, claiming to be backed by real USD reserve, then followed by other exchanges who built USDT in other blockchain networks (Tron/Ethereum/BSC/Polygon...). All of them are built using smart contracts, but almost all of them have a set of parameters that allows devs to freeze balances at any time.
Those stable coins are acting as instrument for trading.

[Silberman]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).
But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

Stable coins are very unsafe, however they have a reason to be, banks are still very reluctant to accept transactions that deal with cryptocurrencies in most countries around the world, and if we add that their transactions are slow this means that getting in and out of the market of cryptocurrencies can be a pain, so stable coins were created to bridge that gap, however you must never hold those coins for the long term as it is impossible to know when finally the trust in them will evaporate and they will lose their value.

[livingfree]

There's no way to know if a shitstorm is going to happen before you know it.

well, USDT is safe as whole crypto industry, if they go down, broader crypto industry will feel it certainly
with that said, I tend to have several stablecoins, that I put my money in, to diversify the risk

there is also DAI, as algorithmic coin, but also AMPL that should be connected to USD in 2019, but obviously have difficulties to hold peg, since there are +/-20+% fluctuations on price

I agree about DAI, it's a decentralized stable coin. It's a good alternative if someone doesn't like to use USDT.

[Kelvinid]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).
But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

We may come to that risk but for many years it existed in crypto and even called stablecoins, I can't even think that way, it was just overly negatively speculated. Because if we all just to think like then, what else we can trust. Who would spend money and risk in crypto? Though we can assure that it was 100% safe, however, I would make myself think that USDT is a safe asset.

If you are doubted about crypto, for everything inside crypto, I guess you don't need to talk like that. As these people place their money in crypto at risk, they are also aware of the possible ends whether it was a bad or good end.

[Slow death]

I think in the following way that for people who have USDT on exchanges to make day trade in case of usdt there is any problem, the exchange will be responsible for changing usdt to another stable currency, I do day trade using usdt because I think that in case of any problem with usdt exchange will have to be responsible. I just don't advise people to buy usdt and keep it in their wallets, that's a big risk

[makishart]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).

Im still trusting USDT and i have been using this for a few years. I have different opinion about that. Sometimes it has a bad and good side. I know that just because tether has ability to frozen the fund and it was not meant if it's a scam.

But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

That's a non sense think and why don't you think if all of stable coins have the same possibilities to become another scam project? Any projects have the same possibilities.  There's no way to find that and that's a big difficult. The only best thing if you're feeling doubt with it and don't use it. I think this is the best way to avoid it.

[josephdd1]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).
But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

The main questions regarding USDT are wether it has declared collateral and how it releases new stablecoins. There were a lot of audits, but these questions are still unsolved. People continue using it, because it is the most convenient option. It is supported by all blockchains, most altcoins have pairs with it. Nevertheless, if you need to store your money in stable coins, you should pick up a basket a stable coins.

[yazher]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).
But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

To be safe, all you need to do with the USDT is to temporarily convert some of your altcoins or bitcoin to it when the market is congested and after that, you can either convert it back or cash it out as soon as possible. But if you decide to hold it as if you don't think of the other way might happen, then that would be a major risk because USDT is not really decentralized like BTC. anytime it can be completely blocked by its owner and you don't have any idea how hard it to restore it or maybe you will lose your crypto assets forever.

[kotajikikox]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).
But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

USDT can be blocked anytime , i mean this can be chat or do anything against the users and supporters in which very risky for our funds.

this is what we can find in USDT so be aware of the possibilities guys when using USDT , try not to be comfortable and never rely big amount of your funds inside this stable coin.

I think in the following way that for people who have USDT on exchanges to make day trade in case of usdt there is any problem, the exchange will be responsible for changing usdt to another stable currency, I do day trade using usdt because I think that in case of any problem with usdt exchange will have to be responsible. I just don't advise people to buy usdt and keep it in their wallets, that's a big risk

that is the same way for me, buying USDT for short term only and never let funds stay longer on this risky currency .

[lvsca]

It should have happened a long time ago. Because currently, the volume in USDT is very large every transaction. Just imagine, who is not tempted by that kind of money. Especially every year it continues to increase. On the other hand, I think USDT has a special system like a one-way algorithm that becomes a powerful code that can not be read by anyone including the USDT workers themselves.

[Bttzed03]

~ is there any safety mechanism or a red flag indicator before its too late?

You will just have to trust them on that and also the Government overseeing Tether.

I'm sure there are accounts in crypto twitter that follows the minting and burning of USDT from Tether treasury and post it. You can get notifications from them and get information almost instantly. Unfortunately, I forgot their handles.

[HashingTower]

USDT has lots of problem with everything, rumours everywhere that they can't be trusted but yet they are leading the top stable coin chart in the world today, I still use usdt to be honest because if the project is that bad they should be down already, another one is xrp that many hated for no reason or their centralised part until they start showing real usability, we just have to wait and see what will happen

[Jackl87]

This is a question i had for a long time,ive seen majority of traders buy and trade crypto through USDT,they just blindly trust it ,as its purpose is that of a stable coin ,i.e. basically a crypto replacement for USD($).
But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?

The safety of USDT is probably one of the most discussed topics within the whole cryptospace and in my opinion the doubts regarding USDTether are definitely justified. Back in 2019 they changed the official wording from "every USDT is backed by a real dollar" to "we have enough reserves to back every USDT minted. So no one really can validate what kind of reserves they are talking about and if they even exist. I personally switched to USDC a while ago.