This happens every time the price dips, but the current best explanation/theory is that Tether prints more USDT with BTC backing from exchanges, who then use that USDT to buy BTC from the market. The issue is that the exchange is part of that loop.
Yesterday cryptos crashed hard, people started moving out of their crypto positions and into stablecoins. Demand for stablecoins increased bringing their price > $1. Tether printed USDT and exchanged them for USD (and put the USD into their reserves) in order to bring the price down and maintain the peg. When the opposite happens they will sell some of their USD reserves for USDT.
They wait to peg only for nice round numbers like $1B exactly? No cents? No decimal?
They don't peg end-of-day, or at market-close, month or quarter end?
Is there an official financial notification of peg events like a crypto-currency corporate event calendar? Nobody should be surprised because pegging is telescoped ahead right?
Is there an offset in another block chain showing USD movement? Surely they didn't just phone the bank (broker) and do a regular ACH transfer, right? They used non main stream tooling cause they're the cool kids?
And where's proof USD moved in offset?
C'mon ... there's nothing here to take seriously. Heck, based on this nonsense I can peg USD out of my garage with carrots. Wanna know what? Wholefoods produce then straight to the keyboard. See you guys on the flip side with CyrptoCarrots, the organic sustainable cyrpto coin.
I assume people in the banking industry allow them to operate as a way to hold leverage over the crypto markets and absorb capital that would otherwise flow to altcoins.
It really isn't counterfeiting. If you made fake hundred dollar bills and passed them off, that'll be counterfeiting. However, if you decided to give a bunch of people $100 IOUs and claim they're "totally backed by real dollars in a vault somewhere", but they're not, then it's just fraud. The NY AG and/or CFPB were able to prosecute/fine them for that, but they also got rid of the "totally backed by real dollars in a vault somewhere" claim, so whether they're currently committing fraud is unclear.
Tether is just an IOU note. I don't have problems with IOU notes, unless someone forces me to use them. Personally I haven't used tether and probably never will, however I don't have any problem if someone else wants to use it.