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Comment by alexk307 | Hacker News Reader

They can be sued if they claim that they hold more assets than they are issuing. If you tell everyone that it's a dollar per coin, and suddenly there are 5 billion coins, you better have $5 billion to your name somehow.

Not sure if there have been similar lawsuits in the crypto world yet.

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Tether isn’t a real company operating in a country that applies laws to it. That’s the whole point.

Tether is a company and laws have been applied to it.

https://ag.ny.gov/press-release/2021/attorney-general-james-...

https://www.bloomberg.com/news/articles/2021-07-26/tether-ex...

For that to be true, that coin needs to abide to the same laws as real currency.

If I say that "1 dollar = 1 virtual thingy" and suddenly there are a lot of virtual thingies and their price fall, then what's the crime aside me personally being a lying f*ck that can´t be trusted anymore?

I don't see how "legitDollarCoins" is legally more legit than, say, lootboxes.

You don’t need a crime to sue somebody. You need a tort.

Turns out that lying to people on a large scale is a crime named 'Fraud'.

It's a security and is regulated as such. So SEC, torts, etc.

In this case if you're marketing $TOKEN as a stablecoin and there's no resources to back it up then it's literally a $PONZICOIN.

$USDC might be okay, I know they've made moves to back their coin in dollars and treasuries.

It's simply fraud. There are laws against fraud.

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