The US/Global Federal Reserve System has CORRECTLY been called a Financial Fraud for 112 years... and it is still humming along... Bernie Madoff's Ponzi lasted about 20 years... Enron ? FTX ? Equity Funding Life Insurance Company - 13 years ? Theranos - Elizabeth Homes ? The US Banking System Being Solvent ? and lots more...
Your analogy is wrong but I will provide one that actually describes the situation correctly. Except we can't know if every tether was actually paid for and the redemption is NOT guaranteed. If they are just issuing Tethers without backing, well, use your imagination. Here is the analogy from Reddit: "That is not redemption. Allow me to explain via an analogy: Imagine if you will... a casino. It has a desk at the front where you can purchase chips with actual money. All of the "games of chance" within the casino use those chips, and pay out - if you happen to "win" - in yet further chips. When you take the chips back to the counter they pretend that they can't speak English and then ignore you, and will continue to ignore you forever; they will simply not take your chips back and hand over a corresponding amount of money. You want your money back, so you flag down someone entering the casino and ask them "hey, want to buy these chips from me (instead of just buying them at the counter)?" They agree, and you now have dollars and they have chips that, should they want to turn them back into dollars, the teller at the counter will pretend not to speak English and then start ignoring them, forcing them to repeat the same process when they want their money back. Has anyone at all in this process redeemed their bloody chips?
Let's look at it from the reverse direction. If it were even remotely legit, you'd be able to find plenty of people recalling large sizes of commercial paper that would have had to be involved. After investigation... not a single one recalled seeing anything of that size from these guys. You shouldn't have to read Niederhoffer books to understand that it takes a lot of hopping through hoops to keep things like this secret from your brokers just long enough that you don't get arbed against. This news travels faster than the speed of light on Wall Street. And yet... somehow Tether found a way.
my evidence is that they got caught multiple times lying first about 1-1 backing with fiat and then again with commercial paper. Not a single audit on top of it. Yeah, they are a fraud.
Have you been to Las Vegas in the past 20 Years? If so, have you ever been unable to redeem your chips for the corresponding cash? I don't know ONE PERSON who has ever been unable to redeem their chips in a casino in my lifetime. Sorry, but your Reddit analogy is ridiculous. The Reddit poster is just conjuring up a far-fetched scenario that never happens in real life, which is why the first bullet point in his fantasy post starts with the word "Imagine".
My thesis is that even if there were some tokens issued in the early days that weren't backed 100% by cash or equivalents, they've made so much money since then that any outstanding issues discovered by an audit are nothing more than a rounding error at this point.
why not do the audit then? Been over 2 years since they announced BDO Italia. And the only reason is that they know they will never pass one.
It's probably a lot deeper than you even realize. It may not be even be an issue of the tokens not being backed, but rather a matter of being backed by whom? If even one backer turns out to be an organized crime outfit, do you really think they are just going to let the CEO consent to an audit and possibly divulge sensitive contact info? Think about it. You're the CEO and you just got an email with this subject line: "Expose us and your head will be unmounted".