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    Post Off-topic: Tether's $69 billion crypto mystery

    Bloomberg Investigation Tries to Find $69 Billion in Tethers, Where's It Hiding? - Mish Talk - Global Economic Trend Analysis

    Bloomberg columnist Zeke Faux asks Anyone Seen Tether’s Billions?
    A wild search for the U.S. dollars supposedly backing the stablecoin at the center of the global cryptocurrency trade—and in the crosshairs of U.S. regulators and prosecutors. Exactly how Tether is backed, or if it’s truly backed at all, has always been a mystery.
    There are now 69 billion Tethers in circulation, 48 billion of them issued this year. That means the company supposedly holds a corresponding $69 billion in real money to back the coins—an amount that would make it one of the 50 largest banks in the U.S., if it were a U.S. bank and not an unregulated offshore company.
    As far as the regulators are concerned, the size of Tether’s supposed dollar holdings is so big that it would be dangerous even assuming the dollars are real

    The only official willing to talk to Faux was Jean Chalopin, the chairman of Deltec Bank & Trust in the Bahamas.
    But when I asked Chalopin if he knew for sure that Tether’s assets were fully secure now, he laughed. It was a difficult question, he said. He only held cash and extremely low-risk bonds for Tether. But recently the company had started using other banks to handle its money. Only a quarter of it—$15 billion or so—is still with Deltec. “I cannot speak about what I cannot know,” he said. “I can only control what’s with us.”

    After I returned to the U.S., I obtained a document showing a detailed account of Tether Holdings’ reserves. It said they include billions of dollars of short-term loans to large Chinese companies—something money-market funds avoid. And that was before one of the country’s largest property developers, China Evergrande Group, started to collapse. I also learned that Tether had made loans worth billions of dollars to other crypto companies, with Bitcoin as collateral. One of them is Celsius Network Ltd., a giant quasi-bank for cryptocurrency investors, its founder Alex Mashinsky told me. He said he pays an interest rate of 5% to 6% on loans of about 1 billion Tethers. Tether has denied holding any Evergrande debt, but Hoegner, Tether’s lawyer, declined to say whether Tether had other Chinese commercial paper.

    Those investing in Tether, please be informed.

    Also, be aware of the link between Tether and Bitcoin. Tether has issued loans which were then used to pump up Bitcoin and if it unwinds those loans, Bitcoin could be affected.
    Last edited by johnsmith79; October 9, 2021 at 6:05 PM.

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