Is Tether a Fraud?

[Peter90]

But what's strange is how come USDT continues to exist to this day and the results cannot be underestimated, even though the entire market for USDT coins has a very large market cap.

Here is why Jonathan

I think USDT is not a fraud because USDT has a level of trust from all investors and traders because we can see that the USDT market is spread everywhere.

"Many investors and traders trust x so x cannot be a fraud"... "It's impossible for so many people to be wrong"... It's a quite usual way of thinking, I myself use it unconsciously every day, for sure. It's very normal.
They call it Bandwagon Effect

"The bandwagon effect is when people start doing something because everybody else seems to be doing it.
Economically, this can make sense, as it allows you to economize on the costs of gathering information by relying on the knowledge and opinions of others.
For example, if you are having a baby, you could spend hours researching different baby strollers and trying to find the best option. Or, if everyone you know has the same baby stroller model, you might decide that's the best one because everyone else uses it. As long as it is a good stroller, you would have saved yourself hours of time lost to research that you didn't need."



The Bandwagon effect is so strong that USDT users will hold to USDT even while admitting that USDT is not 100% backed

No, I assure you that USDT Tether will not be a fraud because USDT Tether has a lot of real money reserves and yesterday I also read an article about USDT Tether, namely the money reserves are around 86% of the total USDT Tether in circulation.
It's indeed minus -14%, but for such a very large reserve value, it proves that USDT Tether is a real stable coin

The Bandwagon effect is so strong that people will consider Stablecoins of a company that does not audit their reserves (Tether) more trustworthy than Stablecoins of a company that audits their reserves (Kinesis)

I wasn't aware if XAUt was audited or not. But Tether is a known company for their Stable coin USDT and people trust them because of the massive about of money they have in circulation. That doesn't mean we cannot trust XAUt. Maybe they are planning to do an audit with an well-named international auditors. I still have some doubts for some reason.

I guess I have shared what is the reason. Even though Kinesis were audited, we never know if they have moved their assets somewhere or not. There is no way to verify it except for another audit. Crypto.com did the same thing after a audit. But people caught them.

[kulkhan]

As we know Tether is getting pumped from time to time. Do you think it will be a fraud at some point? If yes , than why  ?

We saw usdt recently did some mistake for that they have lost some popularity. Bit i can't thinkl usdt is fraud. They trying to overcome from that mistake. Even usdt has large number of volume and large number of marketcap. And till now usdt is most popular stable coin. I think usdt is good coin it will play good role in cryptocurrency market in future. So usdt is not fraud i strongly believe it.

[bitterguy28]

As we know Tether is getting pumped from time to time. Do you think it will be a fraud at some point? If yes , than why  ?

What i was asking here is that How could be a Stable coin be pumped? when the price is almost the same each time? or do you mean increasing capitalization ? maybe because people wanted to keep their funds safer?

As we know Tether is getting pumped from time to time. Do you think it will be a fraud at some point? If yes , than why  ?

We saw usdt recently did some mistake for that they have lost some popularity. Bit i can't thinkl usdt is fraud. They trying to overcome from that mistake. Even usdt has large number of volume and large number of marketcap. And till now usdt is most popular stable coin. I think usdt is good coin it will play good role in cryptocurrency market in future. So usdt is not fraud i strongly believe it.

maybe people that spreading this FUD against  are from other stable coins team or they are just afraid of their coin being dead because of Stable coin presence .

[Gurujebs]

As we know Tether is getting pumped from time to time. Do you think it will be a fraud at some point? If yes , than why  ?

I don't trust centralized money payment but Tether has been year many years and because they sit in the US, it hasn't collapse yet and we shouldn't trust them with over confidence. There audit remain hidden from the public despite all the articles they have shared with rest of the world, I don't trust them a bit. I will used USTC everyday than used USDT but in general, stablecoins aren't to trusted except for DAI.

I just feel that those minted USDT are done on purpose, some people go over the counter to buy this Bitcoin without going through the exchanges and that's why we don't see this transaction in equivalent 1:1 BTC/ USDT. What I'm bother about is the how USDT can printed without actually deposited equivalent fiat. We will be damn the day Tether will collapse in crypto.

[Peter90]

maybe people that spreading this FUD against  are from other stable coins team or they are just afraid of their coin being dead because of Stable coin presence

You are talking about me.
No I'm not from Kinesis.
I just participate to their affiliate program. That's why I know them more than any other gold-backed coins project.
If they wanted to "spread FUD" over other companies and advertise for themselves, they would send a native English speaker.


Bitterguy, this is the second time today that you try to hit me.
This time insinuating that I have some hidden agenda.
Enjoy the company of your friend Stompix in my Ignore Box, Bitterguy

[Peter90]

There audit remain hidden from the public despite all the articles they have shared with rest of the world

The problem is not that the audit is hidden, the problem is that there is no audit

[Z-tight]

What I'm bother about is the how USDT can printed without actually deposited equivalent fiat. We will be damn the day Tether will collapse in crypto.

Usdt is manipulated a lot, and the day it would collapse could come sometime soon. There are a lot of usdt coins right now in people's wallets that are backed by nothing and printed out of thin air, it is certain that if Tether collapses today, their reserves would not be sufficient to cover their liabilities, so it is recommended for people not to hold tether for a long time, because it can also be frozen by the issuing company even if it is stored in your own wallet.

[Peter90]

There are a lot of usdt coins right now in people's wallets that are backed by nothing and printed out of thin air, it is certain that if Tether collapses today, their reserves would not be sufficient to cover their liabilities,

According to BDO's attestations (don't ask me what's the difference with an audit...) currently USDTs are backed up by enough reserves.

Keyword: currently

Tether's reserves are investments.
Investments are risky by definition.
One of the risks of investments is the so-called counterparty risk.

Counterparty risk:
"Counterparty risk is the probability that the other party in an investment, credit, or trading transaction may not fulfill its part of the deal and may default on the contractual obligations."

This is what BDO write in their last attestation report of Tether's reserves



BDO state what everybody should know: if the other side of those investments gets in trouble, the value of those investments will decrease

Tether's investments' value decrease = Tether's reserves decrease = USDT not backed 100% anymore
This could happen anytime.
Is this a fraud?
No, because Tether is clear about that.

The point is, a stablecoin whose stability depends on the stability of the counterparties of their investments is a bad stablecoin.

[Peter90]

What I'm bother about is the how USDT can printed without actually deposited equivalent fiat.

That's a good question Guru...
This is what USDT is currently backed by (assets composition changes over time)

84%:   US government debt... Overnight Reverse Repurchase Agreements (do you know what this is? Me neither)... Term Reverse Repurchase Agreements (Agreements between whom?)...  Money Market Funds... Cash & Bank Deposits (0,4% of 84%)... debt of other governments (which ones?)

0,1%   Corporate Bonds (= debt of private companies)

3%     „Precious Metals“ (probably derivatives, i.e. debt of those financial institutions issuing those derivatives)

3%      Bitcoins

4%      Other Investments (nobody knows)

5%      Secured Loans (loans to whom? secured by what?)


As a USDT user, when you buy a USDT you give them 1 $
Instead of investing your 1 $, why don’t they simply take it and put in the bank?
Because on those assets they earn money.

Who keeps that money?
They do

Who carries the risks associated with those assets?
You do

Is this a fraud?
No, because they are transparent about it.

But think about this: there are companies managing gold-backed cryptocurrencies that could lease part of the metals backing their coins, earning mountains of money.
The danger of a „bunk run“, with their users and investors asking for delivery of the metals represented by their currencies, is zero.
Instead, these companies keep those metals stored in the vaults - „doing nothing“ - losing tons of money as unrealised gains.

I think it would be more suitable to talk about integrity than about fraud

[bitterguy28]

maybe people that spreading this FUD against  are from other stable coins team or they are just afraid of their coin being dead because of Stable coin presence

You are talking about me.
No I'm not from Kinesis.
I just participate to their affiliate program. That's why I know them more than any other gold-backed coins project.
If they wanted to "spread FUD" over other companies and advertise for themselves, they would send a native English speaker.


Bitterguy, this is the second time today that you try to hit me.
This time insinuating that I have some hidden agenda.
Enjoy the company of your friend Stompix in my Ignore Box, Bitterguy

Lol never that I tend to hit you or if I did then its not from me instead from yours ,  I am only posting about how and what i can see in each thread and posting about my opinion does not mean hitting anyone but giving my rights , this is a open forum right? we can post everything as long as we are not spreading malicious or some tricky post then I think that is for reporting but as long as we are sharing our thoughts about this thing and that thing then please don't be offended or felt bad because we are sharing here.

[NikeFit_7777]

P.S. Just a thought, not trying to impose anything. Think and analyze such questions on your own!

So here's the gist of it. Some of you have had thoughts. that all the collateral that Tether has might be dust in the eyes of you and me? Example: they say there is a certain amount in collateral, but in fact, exaggerate. Could that be the case? I would be skeptical of what they say. Suppose tomorrow the American government launched an investigation into security. Do you think it would be okay? My message has been, and will continue to be, don't keep all your capital in one basket. But even after years, there is always distrust. 

[MUGNIA]

I also have a little USDT in a CEX wallet like Binance because just to anticipate if this USDT becomes a scam, I don't lose too much.
I think USDT is not a fraud because USDT has a level of trust from all investors and traders because we can see that the USDT market is spread everywhere.
But there are still many who say that USDT is a coin that will be a scam because USDT does not have a money supply that matches the real one.I'm sure the people who think that USDT will be a scam are people who understand finances in blockchain technology, they are not just random people.

the same, for me USDT is the savior of my assets, if  crypto is not doing well, but with this news 75% I'm afraid I will lose a lot if it's true that USDT is a scam, but is that possible? That's my question?

[Gurujebs]

the same, for me USDT is the savior of my assets, if  crypto is not doing well, but with this news 75% I'm afraid I will lose a lot if it's true that USDT is a scam, but is that possible? That's my question?

USDT is the most pair stablecoin because it has proven to be better than other stablecoins and also been the oldest makes it more popular but the fact that they are hiding real audit and transparency from the public is making everyone suspect them about the real fiat that is backing the stable coin. The facts that many people has called them out makes it's even more suspicious.

If you want to avoid market dump, trade to usdt stablecoin but if you want to hold stablecoin for long, I will advice you to convert the USDT to DAI stablecoin, it's ethereum most used stablecoin and it's back by Makerdao and we'll decentralized than any stablecoins that we have in crypto.

[antonyyu3]

I also have the same question. I mean, US dollar might be the most important currency around the world. Since Tether is pegged to the US dollar. Part of me feels like a fraud would be an extreme statement. But we never know whether it is backed by an equivalent amount of US dollars held in reserve. I mean, where is the money though lol

[Gideon99]

As we know Tether is getting pumped from time to time. Do you think it will be a fraud at some point? If yes , than why  ?

 It's a controversial topics in crypto currency, with many people question today it's legitimate. The main issues is that tether is supposed to be pegged to the us dollar, it's covered by real world assets. This has brought to our notice that tether could collapse if there is a sudden sell off. Moreover, is audited by third party and has so far remain stable.