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Comment by puranjay | Hacker News Reader

This is either a good thing in that "wow, they atleast have $10B to redeem instantly"

Or its a bad thing in that "welp, there's all the insiders exiting the boat first"

It could be those, but nobody outside knows whether any Tether was actually redeemed though. They are alleged to have insider connections with a bunch of different parties so they could just have burned Tether that had been created from nothing and lent out to an insider.

Tether is pretty much another arm of Bitfinex, and Bitfinex is where all the whales trade. Its a huge insider game.

I wouldn’t hold Tether long term even if I was being paid for it

This really dips into conspiracy levels: Tether has many customers who can redeem USDT for real dollars. Many companies do this and are very open/vocal about this. Our company has done this as recent as late last week.

Something I’ve been wondering is how Tether, which has a very difficult history of banking, has been able to pay out billions of dollars in USD in a few days (regardless of having it — even if they had it, I assumed it would be very difficult).

Can you share how your USDT was redeemed — was it to USD from a US banking institution (a wire?) or some other mechanism?

Thank you!

Their are principally using San Diego-based Silvergate Bank

https://www.silvergate.com/

thank you! Very interesting. According to their latest financial reports, their volume of deposits doesn’t marry up with the claims made by Tether. Will be very interesting to see what Silvergate report as inflows/outflows at the end of the next quarter.

For future reference, Silvergate CEO has denied any relationship with Tether in a podcast: https://open.spotify.com/episode/02VtOivOHp3spZ2qOxMhdC

The last I heard no-one could name a single independent customer who had actually cashed out. Has that changed?

Redemptions are also done when exchanges need to offload Tether to buy other crypto currencies to fulfill orders.

For what it is worth I have been getting a lot of emails from OTC brokers trying to fill BTC and ETH orders over the last few days.

Note there no mention of redemptions, just a reduction in the circulating supply.

My guess is the USDT was borrowed and Tether is holding less commercial paper now.

>Note there no mention of redemptions

They have mentioned paying out billions in redemptions on twitter.

From the horse's mouth:

"Tether has over $70 billion dollars of collateral which it can redeem USD₮ against. No exchange’s order book has anything remotely resembling that amount of liquidity."[0]

When you look up the attestation that they provide each quarter 24% of this collateral is commercial paper.[1]

Companies could be redeeming USDT for their own commercial paper.

If you trust these attestations they have a lot of treasury bills and have increased their cash holdings by a couple percent so fingers crossed for those holding USDT.

[0] - https://tether.to/en/understanding-tethers-peg-and-reserves/

[1] - https://tether.to/en/transparency/#reports

> If you trust these attestations they have a lot of treasury bills and have increased their cash holdings by a couple percent so fingers crossed for those holding USDT.

This is the big if. They only do attestations, they don't allow proper audits and fired their auditors once when they got too nosy. It might have changed since then and they hold more cash or "cash-equivalent securities" (another iffy point), they still have never been properly audited so everything boils down to a very big "trust me"... US$80b of value is under that trust premise.

I wouldn't trust these people but I'm just a lowly drone in the bigger scheme of things.

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