Thread by @intel_jakal

Now let's drill down on #tether's financial alchemy.
In a diminishing market (which has just got a whole load smaller) "secured loans" increased by nearly $1.64B (nearly 40%).

Yet we know nearly $1B of its secured loans to #celsius were liquidated. It's worth noting that the 130% over collateralised loans were likely to have a far higher LVR under the terms of the lending agreement.

Assuming the typical LVR is at least 50%. i.e., when you borrow $1 you require $2 of collateral.
by end of Jun 2022 #tether held $4.5B of collateral. 8 days later after the #celsius smash and grab this was down $3.2B.

84 days later they had managed to nearly double the secured loans to $6.14B...

Which is awesome.... right? That's good business...lend your stable coin worth $1 for $2 of security.

Well, a #tethertruther might point out $6B of securities backing $3B of #tether that on redemption there would be a $3B hole in the balance sheet

and a hardcore truther might wonder how the fuck #tether managed to have $3B of tether to lend in the first place. As the only way #tether could have tether to lend is if it issued tether against its own balance sheet....So is that a $6B hole?

ok let's be fair - it's not a hole as the $6B is and will always be backed by #tether's reserves which of course includes the $6B of tether that it is backing itself. Industry standard #playbook