The current Tether drama unequivocally proves that the current stablecoin regulatory regime is not good enough.
There are two possible explanations for Tether's behavior. One is, as many skeptics (including me) have argued, that Tether is basically a massive fraud and has been
There are two possible explanations for Tether's behavior. One is, as many skeptics (including me) have argued, that Tether is basically a massive fraud and has been
engaging in shadow accounting games and offering half-truth-based public statements to extend the scam for as long as they can, while continuing to invest in all sorts of risky crypto assets and pumping the market to push their price up.
The other is that Tether's leadership
The other is that Tether's leadership
are trying the best they can, but through either extremely poor decision-making or basic lack of capacity have repeatedly failed to provide the kinds of assurances and transparency that would otherwise be required for an entity of their size and activity.
I think there's little
I think there's little
doubt that the former is more true than the latter, not least because it's the only narrative consistent with the NYAG's findings thus far.
But even if that other more charitable narrative is true, the important point is that *it just as easily could not be*. In other words, we
But even if that other more charitable narrative is true, the important point is that *it just as easily could not be*. In other words, we
are, at very best, currently facing a "Schrodinger's Stablecoin" situation, where the only way to know whether it's a fraud or legit is to open the box.
But this is the problem: Tether's leadership acts like as long as the box is opened and the stablecoin backing is there, then
But this is the problem: Tether's leadership acts like as long as the box is opened and the stablecoin backing is there, then
they are vindicated. But that's wrong. The fact that Tether has been able to grow to $60bn in size *while still operating as a Schrodinger's Stablecoin, where it's (at best) uncertain whether it's legit or completely full of shit, is itself a massive, massive regulatory failure.
"Does our new mystery soda drink contain lead that may kill your children? There's only one way to find out, buy ten thousand cans today, and wait and see!"
See how insane that sounds? And yet that is basically the Tether model. Even if we happen to live in the dimension where
See how insane that sounds? And yet that is basically the Tether model. Even if we happen to live in the dimension where
this time, somehow, Tether was actually legit and telling the truth all along, and its greatest sin was poor communication strategy, the point remains that *there are a thousand other parallel universes that look exactly the same as this one except that Tether was a fraud.*
That
That
is the problem, that is the deepest issue here. We cannot and should not allow $60bn companies to exist where the core question of "are they completely fraudulent pieces of shit" can remain ambiguous indefinitely and throughout a meteoric rise.
No more Schrodinger's Stablecoins.
No more Schrodinger's Stablecoins.
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