Why You Might Want to Avoid Tethers (USDT)
Tethers are a stable digital currency. It mimics the dollar and is designed to always have a value of $1.
The tether (USDT) token are issued off the Omni platform.
So why would somebody use tethers? Well, provides a unique function. Let’s say you wanted to sell out of cryptos, but not convert back to fiat, then USDT would be your solution.
And I imagine investors feel comfortable consider the USDT token is 100% backed by an equivalent to 1 USD.
But is that really the case?
This excellent article points how even though Tethers claims its 100% backed, it’s not actually contractually obligated to do so.
It also points out how the recent money laundering fine of $150 million at BTC-e could have spillover effects to USDT. BTC-e is one of the only exchanges with a USDT/USD pair.
Then there’s this interesting piece, from the same author, showing how fraudulent tethers are being used on Bitfinex for margin lending.
Even CoinTelegraph is on the case now.
You know what they say, where there’s smoke there’s fire.
Be careful using tether (USDT)!!!
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Great post, it summarized what I have been thinking for quite a while now.
They promise to back USDT with USD but if they don't pay you, well, fuck you there is nothing you can do about it.
I am not saying, that they are necessarily just taking away your money, but if I had 363.000.000$ laying around, I would certainly try to make some money off of it. They might engage in fractional reserve banking and put parts of the money in some kind of fund that makes them money. That would only be the case when they suddenly have to pay a lot of money out because of some kind of bank-run.
Thanks! Agreed there's a lot of risk with USDT. Decentralized exchanges with 100% crypto backing the solution. BitUSD a solution, not sure how liquid it is though.
good article I agree with you
Thanks!
Nice post! Thanks for the food for thought! :)
Thanks! Hate to see someone move a large amount into USDT and then be holding the bag.
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Very good post @g-dubs. . Thankyou for sharing 👏👏👏
Thank you!!!
guess i will stick with steem and never use usdt
there's definitely better options
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Yeah agreed, read this on reddit a while ago too.
When holding USDT on an exchange, you are exposing yourself to:
All those could turn agains you. If the exchange goes bust, or OMNI files for bankruptcy, you're out of luck.
Excellent points. Caveat emptor!
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