Posted by wslh 10/29/2025
There is no other source for estimates of their financial holdings than those attestations. For years, Tether has promised that they are working on an audit. No audit has emerged. This is suspicious because audits aren't particularly hard for legitimate organizations.
People have gone looking for evidence that Tether really has as much as it has said. Nobody has succeeded. For example https://www.bloomberg.com/news/features/2021-10-07/crypto-my.... Which, after noting Tether's settlement for past fraud, and prominent executives with suspicious criminal histories, famously said that Tether "is quilted out of red flags."
And yet, many strongly believe that Tether is for real. Given that nobody has produced evidence of their wealth, I regard this belief as a question of psychology.
Said psychological belief has a simple explanation. We humans have a strong tendency towards cognitive dissonance. Meaning that we reject evidence which questions our sense of identity.
If I'm a bitcoin millionaire, my likely identity includes, "I'm a millionaire." But the financial system does not allow us to directly trade bitcoin. What I can actually trade bitcoin for is Tether. And therefore my belief in my own wealth relies on trusting that Tether is equivalent to money.
How can I support that trust? I can point to someone smart and say, "They believe in Tether, so it must be real!" I can point to someone rich and say, "They believe in Tether, so it must be real!" I can get angry at anyone who doubts Tether. It is easy to observe all three behaviors from people into Crypto.
That Bloomberg article offers an ironic example. Back in 2021, many crypto enthusiasts pointed at Sam Bankman-Fried. Who was both rich and smart, and publicly believed in Tether. Therefore he was quoted on the topic. Today, of course, he is in federal prison for having run a Ponzi scheme. If we behaved logically, any crypto enthusiast who used to look up to him, should be saying, "Wait, am I sure I'm placing my trust in the right place?" But, predictably, few do that. Instead they dismiss this past mistake, and place their trust today in someone else.
Now everyone knows that crypto is full of Ponzi schemes on top of Ponzi schemes. People are often OK with trying to take advantage of the greater fool, because they don't believe that they will be the greater fool. Others see people apparently making money and get in, driven by FOMO. But statistically, most people in a Ponzi scheme will lose money. And yet they will look like really smart people - right until the scheme collapses.
So here is the real question. Does Tether really have the money? Or does the entire infrastructure of crypto Ponzi schemes rest on yet another Ponzi scheme?
Hey, that's not true! They had several audits in progress over time, but had to fire multiple auditors for ... reasons, I guess.
And then they got one completed, but they can't let you see it! Why not? Because uhh, checks notes it's in Mandarin! (I shit you not. Straight out of their own mouths: https://tether.io/news/tether-update/ )
I'm a little surprised that they expected people to forget that translation services exist. But it fits with how people get sucked into a lot of cults, fraudulent cults, MLMs and the like. (I'm obviously listing nefarious uses. Something similar happens in many relationships.)
First get your target (emotionally or financially) invested. Then put them in a position where they have to accept something uncomfortable (investing emotionally even more), or back out. Repeat and intensify
In extreme cases you try to get them to be swallowing a stream of erratic and blatant lies. At that point you can do anything.
Yes. This says that there is likely a direct connection between Trump's erratic behavior and the fanatical loyalty that he inspires. If you trust him, you have to follow his latest whim. And following his latest whim strengthens your trust. Many charismatic leaders do this.
If there is a run on Tether, the US government will step in behind the scenes and buy Tether at a discount. This gives Tether a backstop. It also gives the US government an immediate paper profit (buy Tether for less than a dollar, get a dollar of Tether), which can be used to buy Bitcoin. The sight of Tether successfully redeeming currency and Bitcoin going up will trigger a desire to jump back in, and reverse the cash flow. Allowing the US government to withdraw as much money as was actually put in.
This results in a budget neutral investment in Bitcoin. We put $X into Tether, we got out $X. We also got y% of that as Bitcoin. Exactly as the executive order demands that the government should do.
There is no reason not to do an audit except when it’s a scam/all money gone. No accounting company wants to do their audit - guess why.
If you look at their yearly profits and liquid cash, clearly Tether is backed by something. This is not the same as saying that they have full transparency but you cannot have those profits in dollars out of thin air.
Usually the correct answer is the simplest - fraud.
Any evidence that they actually own?
“ In its own attestation report for Q2 2025, Tether stated it holds about US$127 billion in U.S. Treasuries” this is the only source. And tbh anyone can “attest” it owns billions of whatever. Again, no audit because there is nothing there. They only attest through BDO Italia. And attestations are easily gamed. Usually worthless, but useful for usdt hodlers.
I wonder why they use bdo? See below their history.
About bdo:
In the UK, a former senior manager at BDO (in the UK member firm) was banned for 20 years for creating false audit documents and mis-using signatures.
In July 2025 the UK regulator Financial Reporting Council (FRC) flagged the BDO network as having audit quality “significantly short of expectations”. Only about half the audits reviewed were deemed satisfactory
You didn't answer the audit question, which is really important.
I mean they might, maybe. But you can't point to the law as proof of something when the thing you're defending doesn't follow the law.
The most reasonable explanation is that it is a Ponzi scheme. Which will appear to work right until it doesn't. And if it stops working, the entire crypto universe will implode.
That said, the current President and many who are close to him have significant portions of money invested in crypto. That depend on Tether. There is therefore a reasonable expectation that the US government will covertly back Tether for the next several years if there is any prospect of a collapse.
This expectation is supported by Trump's declaration last March of creating a "strategic crypto reserve" for the USA. See https://www.whitehouse.gov/presidential-actions/2025/03/esta.... On the face of it, this executive order only helps crypto by taking some of it out of circulation. But the provision in 3C of creating "budget neutral" strategies for acquiring more bitcoin, could easily cover converting actual USD to Tether. Particularly if the Tether was available at a discount to the USD.
This is ultimately good for the world, good for democracy, and good for the downtrodden and underprivileged members of corrupt countries such as Nigeria, Venezuela, Lebanon, and Turkey, who have suffered their own currency crises to the great detriment of their citizens. With only an Internet connection, US dollar stablecoins give them property rights which can't be voided through an act of the corrupt ruling class.
Before the tether truthers come out, update your priors. This industry is very different than it was in 2015. It has grown up substantially. The GENIUS act is the largest banking and financial reform of the last 100 years, and the consequences will shape the 21st century and local currencies globally.
If the dollar starts undergoing wild inflation, then the whole world has a whole lot of problems, not just stablecoins.
>This is ultimately good for the world, good for democracy, and good for the downtrodden and underprivileged members of corrupt countries such as Nigeria, Venezuela, Lebanon, and Turkey.
Wow, US has found a gold mine: The super full wallets of Venezuelans, Nigerians and Lebanese! They will buy a trillion of USDT to prop up US debt!
You mentioned 4 countries that are dirt poor and need to buy food, not stablecoins. The people in those countries who have money don't need stablecoins to invest in the US.
Well, except that it ties them to USD, an ultimately doomed currency. The short-term interests are aligned, but they'd be better off with a locally-managed currency and simply banning the USD from being held by either the state or any of its representatives.
It's a luxury opinion to view the USD as trash. It means you have options. USD is the best many people in the world can hope for.
Hell, the USD isn't even managed with americans in mind. We just happen to live here.
Tether and their "original" "bank" were in The Bahamas, not the Caymans!
China had $776.5B a year ago and has $730.7B now, a roughly 5% drop. They don't seem to "rapidly winding down", unless there's some additional data I'm missing.
Look at the other holders. Belgium and Luxembourg combined have more US debt than China.
If the goal was to crash the US economy by selling their small amount of debt (which likely isn't possible for them to do, despite the rhetoric, they have less than 2% of the total debt), they would also significantly impact of all the countries listed here, which would make them very unpopular indeed:
https://ticdata.treasury.gov/resource-center/data-chart-cent...
However, stablecoins WILL cause unrest in Nigeria, Venezuela, Lebanon, and Turkey as their corrupt local currency completely erodes and the ruling class can no longer extract from their citizens.