Argh I feel like I'm going mad here. What did Tether actually do that people are mad about then? Everyone knew going in that it was basically an unregulated bank! The only thing I've heard is that they used to claim they were 100% backed in cash and maybe weren't but regardless aren't now. Which is super shady and the epitome of "growth hacking" but their current state is fine, right?
They are very opaque and act extremely shady. I would guess only a handful of people know the truth but they certainly don't act like they are legit and have nothing to hide. If they were legit, there would be zero reason not to do audits that show their operations are solid (it would also give them really good PR, help get more customers, and shut up the critics) and where exactly each dollar is. As someone else pointed out above, can their legal disclaimer is absolutely hilarious:
>> Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of securities and other assets held in the Reserves. Tether makes no representations or warranties about whether Tether Tokens that may be traded on the Site may be traded on the Site at any point in the future, if at all.
To me, that disclaimer sounds like they are trying to make a scam legal later when a rug is pulled out from underneath everyone and a trap is sprung like darknet drug bazars that shutdown and take everyone's assets once there was enough money on the platform.
They still, to this day, have not completed one of their promised audits. As such, we don't know what their current state is, and they have a track record of lying about it. There are rumblings that much of their current holdings are in commercial paper that aren't worth what they're assessed as, because Tether values them at the purchase price rather than the current mark-to-market value.
Even if they're solvent now, getting there via fraud is bad.
