Quote from: chesthing on September 19, 2018, 04:12:38 PM

So I went to the Tether website and there is no way to buy or sell USDT for or to USD. Rather, the only way I see to buy it is to go to an exchange like Binance and use bitcoin to buy usdt. The only way to sell usdt is to sell it back to bitcoin on an exchange. Tether does not deal with USD whatsoever, not directly nor through exchanges.
Is this correct? because if it is, where is the USD that are supposed to be backing all these usdt tokens coming from? and how are they able to print new usdt at will - where is the usd coming from to support these new usdt tokens? Apparently there isn't even a way to create a wallet on Tether.io much less be able to buy or sell them for usd. https://wallet.tether.to/app/#!/signup
I'm really confused by this, please explain.

the truth is that tether = bitfinex. mostly the same directors, and i believe there is a corporate/subsidiary relationship. that's why USDT can be redeemed for USD on bitfinex.

you can deposit USD to bitfinex and withdraw USDT to other exchanges. that's where the money is theoretically coming from.

regarding tether.to itself, i can't confirm since i'm in the USA and they don't serve USA residents anymore. but i read that after the banking troubles last year, tether.to resumed bank deposits and withdrawals for residents of other countries. their fee page lists a $20 fee to deposit/withdraw by bank account. either way, i believe most of the activity is derived from bitfinex.

the easiest way to think about it: holding a USDT balance is the same as holding a USD balance from bitfinex. they are both IOUs from bitfinex. as far as i know, bitfinex is processing fiat deposits and withdrawals normally.

Quote from: LeGaulois on September 19, 2018, 08:34:25 PM

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If tether does not pays his creditors, will Binance and those others survive?

That's a good question, I would like to know the answer to it

binance and the others aren't net USDT creditors. it doesn't matter to them (financially) if USDT is unbacked and loses all its value. in that situation, binance is still solvent since it still controls all its depositors USDT.

in that situation, it's the holders of USDT on binance that lose money, not binance. this is why kraken always had a USDT/USD market. they can't risk redeeming USDT for real USD because that would expose them to bitfinex counterparty risk.