TETHER(USDT) IS A SCAM? - 9/6/17
Is Tether a scam?
There is a lot of controversy surrounding Tether concerning whether it IS or ISN'T a scam. Hidden deep within Tether's legal section is this statement, kudos to cointelegraph :
“Once you have Tethers, you can trade them, keep them, or use them to pay persons that will accept your Tethers. However, Tethers are not money and are not monetary instruments. They are also not stored value or currency. There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers.”
This is weird considering the Tether is advertised as "digital money for a digital age". Scrolling down further on the front page lets users know that Tether is "transparent, secure, and 100% backed"
In case you didn't know..
According to a Bitfinex employee by the name of bfx_drew:
- Bitfinex and Tether are sister companies that have an overlap in shareholders
- Tether is undergoing a balance sheet audit
- Institutional customers move 6 to 7 figures of fiat in and out daily.
Lack of Transparency
The lack of transparency with Tether and Bitfinex arises from the these professional "audits" they get. Tether does not make any audits public nor available. Does that really equate to transparency? Also, if the company regularly undergoes professional audits, what's the point of bfx_drew stating that they are currently undergoing one?
Tether in a nutshell
Tether's tokens, supposedly, are backed by the U.S Dollar in their bank account. When a user deposits U.S. Dollars in Tether's business account, Tether creates the matching amount of tokens and transfers them to the individual.
However, there's no way to know if Tether's tokens are backed because there are no public reports available from audits. We can only assume, but that may not even matter because Tether's tokens aren't redeemable as money..
If Tether's tokens aren't redeemable as money, then what's the point of depositing money in their accounts? If, all of a sudden, people stop caring about Tether, will they retain their worth?
What do you think? Comment below.
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Sources:
Hedging Your Bets: New Diversification Models for Crypto Investors: https://cointelegraph.com/news/hedging-your-bets-new-diversification-models-for-crypto-investors
Tether Really Isn’t a Scam, Company Promises:
https://cointelegraph.com/news/tether-really-isnt-a-scam-company-promises
Is Blockchain Ready for Fiat? Why Banks See Big Promise in Crypto Cash:
https://www.coindesk.com/blockchain-ready-fiat-banks-see-big-promise-crypto-cash/<