The Deal with Tether (USD₮)

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What is Tether?
Tether is a digital token backed 1:1 by Traditional Fiat and is supposed to provide individuals and organizations with a decentralized method of exchanging value back and forth.

1 USD₮ is supposed to be tied to 1 USD. The balance of fiat to tether
is apparently visible through the transparency page of the tether
website and is apparently 100% backed by actual fiat currency assets
in the reserve account. Tether is also available in EURO and soon JPY
trading pairs. This fiat tie is meant to mitigate the
volatility of other cryptocurrencies and makes it a useful stable token.
When other cryptos dip, tether stays the same.

Tether exists and trades on blockchains using the Omni Layer – Omni
Protocol, open source software that interfaces with blockchains to
enable issuance, exchange and redemption services in a safe and
secure environment. It has virtually zero conversion fee and charges
no commission.

Why use Tether?
Claims to be the only stable cryptocurrency that doesn’t get affected by dips and market crashes. When bitcoin dips the alts all lose value. USDT is tied to the dollar not bitcoin. Exchanges between Cryptos and Tether are cheaper and faster than Cryptos into Fiat.
Its technically Faster to transfer fiat internationally as well due to tethers blockchain structure.
Tether is used on exchanges that don’t get involved in Fiat like Poloniex, Binance, Bittrex and Liqui, but also includes many more pairings than fiat as well.
Use cases include businesses using it as a form of “safe” crypto payment as they don’t have to worry about value loss and as a safe storage medium for traders when the markets are particularly volatile.

(pulled directly from Tethers "Legal" Page)

Tether Drama from the Beginning
Tether is portrayed as “Money Built for the Internet” with buzzwords like “stable currency” “transparent” and “secure” plastered on the homepage. Then statements like the one to the left on the legal fineprint tell an entirely different story.
This legal jargon absolving them of financial responsibility follows Bitfinex’s own TOS which claims that by using their site you automatically agree to their TOS and the clause claiming you cant take legal action against them. If tether is not legally obligated to issue tether for your fiat why would these big business partners of tethers that they claim exchange millions per day for a token that tether insists is valueless? Is it plausible then that tether creates more tokens and distributes them to themselves and their partners? Without these “Transparency Audits” who knows?.

Bitfinex Connection
Tether and Bitfinex are sister companies, They have joint interest. Like when Bitfinex’s banking at Wells Fargo was cut off, and Tether came to bat for them. Tether originally had an About Us and Team Page which shows Bitfinex CFO and CSO as advisors. They have a majority stake in tether and without remorse are willing to use unbacked tether funds to patch missing funds in their network. This Article by @bitfinexed via medium.com is full of redacted info and audio confessions of bullshittery going down by both sides. ( Updated info: Paradise Papers Link Philip Potter and Giancarlo Devasini to Tethers Creation )

The 30Million Dollar Tether Hack
November 20th 2017 Tether was hacked by an “external Hacker” for the sum of $30,950,010USDT. This brought up all sorts of speculation about the token, who backs it and its role in the BTC/BCC market manipulation that’s been going on.
Omni Protocol mentioned earlier allows coins to be tagged and tracked and in this case let them freeze the funds and attempt recovery. Nodes would be updated and would blacklist the criminals address.
Ties to Earlier Hacks have been discovered as well, a reddit user named SpeedflyChris found ties to the Hack of Bitstamp back in 2015 as well as thefts in relations to the Huobi Exchange in 2015. The primary wallet in question was used to trade tokens to another address which also received funds directly from Tethers Treasury Wallet in a series of 21 Transactions adding up to the $30 Million Dollars.
Omni is currently working on the software to retrieve those funds from the blacklisted addresses.
But all this just stacks on the mountain of controversy around tether and bitfinex.
Take some time and look through the various articles about promised audits and valueless tokens and make a decision for yourself. Personally though I would avoid Bitfinex completely.
People Are Rightfully Afraid (u/Sesquipedalism via reddit)

Is this article intended to generate FUD?
Yes but you should be fearful, fearful tat these people have no legal binding to provide any monetary value for the tokens they issue. Fearful that these people could setback crypto yet again like the Mt. Gox. debacle.
Please share this article and info if you found it useful, the knowledge hasn't quite sunk in even though alot of folks realize or know about the shady shit. Thanks.

A Few more Links for your Enjoyment
Bitfinex Mt.GOX 2
Bitfinex Concerns
Tether Hack
Tether a Scam?
Medium.com Tether Search

note: This Article was intended for Information and Research purposes only
and should not be taken as Financial Investment advice.
I am just a guy reporting about the wide world of Cryptocurrency and not a financial advisor.
Enjoy
_Yoza.Ossan

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