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Tether admits insolvency in court filing: coindesk.com/tether-lawyer-…
I think the $64 million question now is where the next shoe is to drop, because it's overwhelmingly likely that they've been de facto supplying credit to the ecosystem.
I think the $64 million question now is where the next shoe is to drop, because it's overwhelmingly likely that they've been de facto supplying credit to the ecosystem.
Somebody is levered long on Bitcoin who doesn't think they are, and I think that's an arresting thought even for most Bitcoin fans.
They certainly want to have-their-cake-and-eat-it-too on the entity shell game: Bitfinex and Tether are arms-length for determining whether they're in collusion with each other, but allowed to know they're literally the same people for assessing default risk, etc etc.
Yeah in addition to treating each others' customer holdings as slush funds the fact that the market knows them to be alter egos does create some risk of reputational spillover. 
Seems like a pertinent question for somebody to ask during the run on the bank is "Hey, if we ignore the entity shell game: can your combined enterprise satisfy all demand deposits and if not what percentage can it satisfy and in what order does it satisfy them?"
Redemptions were impossible directly through Tether between, approximately, November 2017 and 2018. Tether pointed interested holders at Bitfinex or other exchanges but pointedly refused to redeem, and Bitfinex couldn't redeem (because it lacked reliable USD-banking).
One of several times that cryptocurrency enthusiasts decided to praise the practice of *checks notes* fractional reserve banking, without implementing things that banks often do, like having credit risk monitoring, an audit committee, 2+ loans, diversity of funding sources, etc.
