Quote from: gentlemand on May 04, 2019, 10:25:28 AM

Quote from: o_e_l_e_o on May 04, 2019, 08:54:34 AM

Given the seemingly endless list of shady activities that Bitfinex and Tether seem happy to engage in, how can you be sure they haven't done what I've just described?

The thing with Tether is that we're never really going to know anything. I can certainly believe it's been fully backed at certain points, but that doesn't mean they didn't leave gaping holes in the past that were subsequently refilled. This present situation could be just another example.

people have always speculated that tether intentionally ran a fractional reserve. i always thought that idea was ridiculous. to what ends?

the real fundamental problem has always been exactly what we're seeing now. banking like criminals and rubbing elbows with drug cartels will eventually get your accounts seized by police. tether simply isn't profitable enough (especially because it's so hard for them to move money) to recover from endless seizures or to cover seizures that bitfinex suffers from.

becoming insolvent is an eventuality for both companies.