Tether (USDT) is once again the subject of suspicions as it was discovered that some sly changes have been made to their terms and conditions which brings into question their dollar-pegged status. The findings were brought to light via a Reddit post on March 14, 2019.
Times Are Changing
You’d be hard pressed to find a coin more controversial than Tether in the crypto industry. The stablecoin has repeatedly been of being a manipulation tool and has even been under by law enforcement.
The latest batch of controversy comes from a small detail in their terms and conditions page which the company changed and was highlighted on Reddit on March 14, 2019.
Tether has an update, filed under Who Could Possibly Have Seen This Coming. pic.twitter.com/W7Xzw4TMjJ
— Patrick McKenzie (@patio11) March 14, 2019
The text seems to subtly show that Tether is going back on their previous claims that their coins are backed up by a dollar for every Tether token.
Going Back on Their Word?
“Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD,” the controversial text reads.
The first thing that stands out in this text is the fact that Tether claims that their token is backed up by reserves that include receivables from loans made to third parties and other assets besides the dollar, which they had previously claimed was the reserve behind their token.
The problem with this is that their dollar reserves have always been called into question, so much so that they were forced to release documents which that they had an account with a bank in Deltec to the tune of $1.8 billion.
With this statement change, it would almost seem like the firm is confirming that they do not have the funds they earlier claimed to have had. Another thing to take note of is that the text says that each Tether coin is valued at one dollar by Tether, not that it is backed up by a dollar.
This was all in the white paper – "Bitcoin: an electronic system of trusted third parties, running fractional reserves, managing the market." https://t.co/C4KejWrtvs
— your #1 source for absurdist true crime 🐍👑 🌷 (@davidgerard) March 14, 2019
This wording is subtle as it relies on a technicality, essentially saying, “we value our coin at a dollar but never said that we had a dollar to back it up.”
Further aggravating suspicions is the fact that Tether did not make a formal announcement of these changes and instead snuck them in hoping people wouldn’t notice. On top of this, their proof of funds page is now a deadlink.
Tether has yet to formally comment on the matter, but this move is sure to put more suspicion on them than ever before.