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Comment by gfh687564 | Hacker News Reader

why would it pop tether? if anything, it makes tether more profitable, as they can collect the yield on the treasuries and not have to return the principal dollars which are frozen.

think of it this way - if someone steals your iphone, and you lock it, does apple pop? No, apple sells you another one. locked devices are good for apple because it causes more demand.

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Because Tether is an obvious fraud linked to these other obviously fraudulent companies and predicated on trust in cryptocurrencies.

It's really hard to be an obvious fraud when you've been publishing attestations for years and now you have a "full independent audit" from KPMG for FY 2025, just like Circle/USDC.

https://tether.io/news/tether-completes-the-largest-inaugura...

Read up on the origins of tether, the people who founded it, deltic bank, banned for fraud in New York. In the beginning the reserves were a lie. I have no doubt they have some reserves now, but do they have $182 billiom USD, really?

CZ from Binance was also done for… fraud but miraculously pardoned by Donald Trump (I wonder why?!) and somehow still has enormous influence and inside knowledge in spite being banned from managing Binance. He talks as if he runs the company. Hmmm.

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

https://www.bbc.co.uk/news/articles/cly1qrl9l1qo

> I have no doubt they have some reserves now, but do they have $182 billiom USD, really?

This is literally what the attestations and audits are for. BDO and KPMG both have issued opinions saying yes, they do have all the money they claim to have.

You mean this KPMG?

https://www.frc.org.uk/news-and-events/news/2022/05/sanction...

https://www.bbc.co.uk/news/articles/c8znzxe5ewxo

And this BDO?

https://www.frc.org.uk/news-and-events/news/2025/11/frc-impo...

This sort of audit is pay to play and the customer has a heavy influence. I'm sorry but given they were caught lying before I don't trust the Tether people. But if you trust them and these auditors, great, you can hold Tether and be sanguine that KPMG will protect you.

Just like that EY [1], that Deloitte [2], and that PwC [3]. Yes, all of these major auditors with hundreds of thousands of employees each and probably-similar-in-magnitude clients have been sanctioned by the FRC. It's great that there is a competent regulator that can enforce regulations against all of the top accounting networks. For Tether, there are two independent auditors: BDO and KPMG. If two large auditors who take their reputation seriously both come to the conclusion that Tether has the money (and has had the money), you are just burying your head in the sand thinking everyone is committing fraud.

[1] https://www.frc.org.uk/news-and-events/news/2025/04/sanction...

[2] https://www.frc.org.uk/news-and-events/news/2026/10/sanction...

[3] https://www.frc.org.uk/news-and-events/news/2026/07/sanction...

Yes all these auditing companies accept money to say that another company is doing just fine and ticks all the boxes and has assets etc. They all often lie, in small ways and large. I'm not sure why you think proving all are untrustworthy means some are trustworthy?

We'll see whether Tether has the assets they claim when the next crypto winter comes. Till then I think we'll have to agree to disagree.

Hardly anyone actually uses crypto anymore, silly ideas like NFT, rewiring the financial system, asset tracking and apps on the blockchain have died, and all that is left are the last bag-holders, fraud and extra-legal financial transactions.

Is that what happens here? Tether just pocket the difference?

No lol

I would assume Binance is powerful enough to get Tether to issue new USDT and give it to Binance to replace the stolen-and-frozen USDT.

Frozen funds remain frozen, until they are unfrozen.

So mechanically Tether pockets the difference, unless they unfreeze. But as a matter of accounting, because of the unfreeze capability, the liabilities of the frozen Tether stay on the books. So they can't just spend the money. It also makes it hard for Tether to compensate the victims from the frozen funds.

The alternative would be to let Tether burn funds, but that is highly problematic for well intentioned users. Because a freeze can be challenged in court and reversed. A burn cannot.

If the iPhone you bought can easily poof and be gone and locked somewhere, people will stop buying and using iphone and apple will pop

Freezing bank accounts was and is possible. People don't seem to be still using them.

People are but criminals are less likely to do so. Without the money laundering usecase crypto is in for another winter.

And you say that as if this is a... bad thing?

Yes. But that doesn't happen as often as in the crypto world it seems.

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