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Comment by Scott_Sanderson | Hacker News Reader

It's a money printing machine in the sense they printed 100s of millions of tethers whenever they wanted. Problem is no one will give you $1 for a tether (except a very thin market on Kraken). Instead, they used the tethers to buy bitcoin and pump the price, then cashed out their bitcoin to fiat in over-the-counter deals.

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Correct. There's also a strong relationship between Tether and Bitfinex directors. It's suspected they were using margin loans to leverage their fake money further, while denying fiat withdrawals to real customers.

Say you print $100M USDT and do this, and the market moves up 10%, and you get lucky enough to find an OTC buyer willing to give you the market price. You rake in 110M for printing 100M. This is still a money printing business model, the market manipulation is just icing on the cake.

But printing the money is only useful in that it manipulates the market price to go that 10% higher which is where you make the profits.

If they printed that money and everyone found it worthless and the market didn't response they wouldn't have a business model.

Edit: I guess I should say that's the conjecture of those saying Tether was created purely for profit based on market manipulation. I don't have an inside knowledge on what was going through the heads of those at bitfinix who created it.

> But printing the money is only useful in that it manipulates the market price to go that 10% higher which is where you make the profits.

If you print money you have free money. That's pure profit. Anything else is just a bonus.

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