THREAD: @Tether_to 's risk is completely misunderstood and underestimated. Here is a scenario which is not unlikely to happen, we hope it won't.
Currently, the NYAG is pursuing an investigation of fraud. But this may just be the tip of the iceberg. If US authorities have decided to target Tether, this could just be an exploratory probe.
If US authorities can demonstrate that any US residents were customers of Bitfinex or Tether, they can reserve the right to pursue legal action, anywhere in the world.
Pre-crypto Example: Liberty Reserve in Costa Rica:
bbc.co.uk/news/technolog…
Crypto Example: BTC-E in Greece and other countries:
coindesk.com/btc-e-connecte…
This US policy allows law enforcement to seize funds suspected of being involved in a crime, and the burden of proof is not on the government -the money is considered guilty until proven innocent.
If funds are seized, business for Bitfinex and Tether would stop and they'd have to defend themselves and prove that the funds were not involved in illegal activity - without funds to pay legal fees.
Finally, customer of Tether would need to prove that the funds belong to them - and if successful, wait for the funds to be returned.
On 04/15/11 the feds shut down the entire industry overnight - and seized $3b in funds.
pokernews.com/news/2016/04/b…
These people were promised their funds back… but many of them are still waiting.
pokertube.com/article/absolu…
h/t 🎩 @EdanYago