What's the best guess on where the actual cash sits in the meantime, or long term?
In my opinion, best case scenario: Tether is buying Bitcoin and other assets with Tether, and has been able to sell them at a profit as prices rise, leaving their reserves at or above 100%. This sort of initially unbacked issuance may be a crime in and of itself, but its possible Tether holders would have a legitimate claim on any assets if Tether fails or is shutdown and wouldnt take a loss (though it could take years to get back their money).
Worst case scenario: its entirely, or almost entirely fraudulent, and Tether insiders have embezzled and spent as much of Tethers available hard currency as they can.
Look, it's easy, just phone up Paolo and get us an audit, you seem to imply you're connected.
Then we'll move on! I'll eat my hat and apologize to everyone I've ever told Tether is anything other than the most legitimate entity in the entire world. I'll borrow from the r/wsb folks and tattoo a Tether logo on my backside, even.
> Or rather, what most people in the industry pretend doesn't exist, because they know it's a systemic risk and everyone's in way too deep at this point.
Are you referring to the NYAG here?
Owning a USDT gives you as much right to cash from the Tether treasury as owning a Chuck-E-Cheese token gives you right to the coins in the cash drawer at your local fun-a-torium.
Even if that's true it would be a direct contradiction to what they promise to their customers, that Tether is fully backed by USD. Any angry customer can then sue them for fraud.
They originally claimed that every USDT issued was backed by cold hard USD cash. No 'cash equivalents', no 'other assets', no 'loans'. The wayback machine can give you a historical view on their pages and their claims.