For everyone not familiar with Tether, here's a quick run down......
In a nutshell, Tether is a stable cryptocurrency which is "supposed" to have one US Dollar ($1) backing each USDT that is created. These Tether currencies are then traded on exchange markets which don't have bank connections...thereby effectively allowing traders the option to trade from crypto's back into cash to prevent market corrections and such.
Tether emerged in the late summer of 2016. What's interesting about this is that it was right after the big Bitfinex hack which saw over 100,000 BTC's get stolen (mine included). Now, the general consensus is that the Bitfinex team created Tether in order to generate money to pay back the issued BFX tokens which it issued to the customers of Bitfinex for their losses.
Where does this get hairy? Well, Tether is supposed to have an equal amount of US dollars for the number of issued USDT tokens. If Bitfinex used the money to back Tether to pay back owners of their BFX tokens, this could of course create a realistic problem.
For anyone who remembers Mt. Gox, there was a similar scandal speculation behind it after the hack.
Some of the current theories about Bitfinex as well is that they were taking all of the money that was used to back Tether and instead of holding it to back it, they used that money to buy Bitcoins.
...again, I'm sure we can all see where the problem is.
Now, back in 2013, the Mt. Gox fiasco broke user confidence in the crypto system. This lack of confidence took BTC from above $1,200 to below $200.
There's many more news stories regarding this recent subpoena. The WIRED had a great article today here
"Crypto Investor" on YouTube made a case for this several months ago, hinting that this scandal scenario could get exposed and be a catalyst to pop the markets (even further at this point).
As always, stay safe and be patient!! Please let me know your thoughts on the Tether/Bitfinex situation.