Fascinating article on the risks in crypto currencies. But this is what caught my attention:
Tether has refused to disclose details on its $40bn hoard of US government bonds for fear of revealing its “secret sauce”, even as one of the world’s most important crypto assets comes under strain from heavy selling pressure.
To me, that sounds like a Madoff-type scam. So I checked Wikipedia, where I found the following four statements:
“Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie”
Tether Limited as of 2017 stated that owners of tethers have no contractual right, other legal claims, or guarantee that tethers will or can be redeemed or exchanged for dollars.
On 30 April 2019, Tether Limited’s lawyer claimed that each tether was backed by $0.74 in cash and cash equivalents
In May 2021, Tether published a report showing that only 2.9% of Tether was backed by cash, with over 49.6% backed by commercial paper.
I admit to being biased against them new-fangled financial instruments, but this one has all earmarks of a scam.
Source: Crypto Crash Contagion Could Go Beyond Bitcoin, Ethereum, Tether – Bloomberg
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One hallmark of a “real” company is a quality executive team. Sure Bill Gates was a college dropout, but he surrounded himself with first rate people. Whereas Madoff’s executives were mostly friends and relatives. As for Tether, a web search doesn’t seem to turn up a list of executives. There’s even questions about the real name of the CEO.
Who is J. L. van der Velde? (CEO of largest bitcoin exchange) from ethereum
I did find a leadership list for Bitfinex, Tether’s parent company, and some info on Phil Potter, who is or was the Chief Strategy Officer,
Source: Crypto Crash Contagion Could Go Beyond Bitcoin, Ethereum, Tether – Bloomberg
