Here is a sneak pick into it: https://www.ft.com/content/0035016c-29ad-4e6f-9163-2a17df490aa5 Essentially Tethers take crypto as collateral, aint't life amazing in Crypto land
Non-paywalled article about Tether's "backing." https://decrypt.co/83782/tether-lending-stablecoins-backed-bitcoin-ethereum-celsius-ceo And I don't want the million dollars in Tether.
Thanks was posting this, same as the one I did in FT, but it is behind login sometimes. No Tethers were removed when BTC went from 64k to 28k, like I said crypto Alice wonder land.
Also interesting that they don't update the value of the collateral ever, they use the value at acquisition as its current value. So, for example if they were to have a bunch of property in China, which perhaps isn't worth nearly as much today as 2 years ago when it was deposited as collateral, they're valuing it at that original value. Notwithstanding the circular logic of allowing bitcoin as collateral, this also means they positive feedback loop on the way down will be all the more viscious if they accept bitcoin at a high value and never mark it to market.
If Tether would really do what they say, they would proof it. The fact that they don't show hard and full proof means they are lying. This is already confirmed by Tether themselve as they admit now that they don't have the collateral they always said they have. Even this is proof that Tether is lying and cheating (just like the whole crypto "business" is a scam: “Tether will not issue Tether Tokens for consideration consisting of the Digital Tokens (for example, bitcoin); only money will be accepted upon issuance.”
So they took in USD (for ex.) Handed out Theter with which clients go to buy BTC, deposit them, get handed out USD again? Sounds like a BTC-pump ponzi... Anyone knows how big their balance sheet is?