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Comment by bhouston | Hacker News Reader

It seems that Tether will survive - why, because they have so far. Not sure why, but I figure they bluffed their way to solvency?

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Yeah, I found Tether resilience incredible indeed, but Madoff and his Ponzi scheme went on for decades too even when JP Morgan figured out it was a scam and still did business with him while informing neither the SEC nor the US government.

https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-a...

So they must be "backed" by something, we just don't know whom or how, that allows them to keep their scheme running.

Is there a way to "short" Teather? Seems like that'd be the money play.

It's possible but it's extremely dangerous. The exchanges that you'd use to short Tether are the ones preventing Tether from collapsing. These exchanges could invent an excuse to liquidate you before they allow Tether to collapse so even if you were right you'd still lose all your money.

Huh. When Patrick McKenzie aka patio11 decided to try it, he expected to lose his money, but that was not the main risk he listed.

https://twitter.com/patio11/status/1580269516331720706

Still his reason to make that bet was the comedy of being proven right about how broken crypto is when he lost his money. And not for the opportunity to be proven right and make money.

I believe something very similar to the above commenter, with the proviso that it might not be "the exchanges" engaged in market manipulation but rather Tether or a co-conspirator. Tether has printed trades far above a dollar before on various exchanges; the only reason to waste money doing that (as the buyer) is to liquidate shorts. Playing in a rigged casino seems even more -EV than playing in a fair one. But this is not top of mind or hugely relevant to the comedy gold thread.

Everything survives until it doesn't

it took 5 years for people to finally open their eyes on wirecard i think? and several years for Madoff too

Madoff took decades; there's evidence he was cooking books as far back as the early 1970s.

And Madoff was apparently ALSO an open secret amongst many in the years before it finally burst.

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