Tether makes a sneaky update to its terms: USDT is not 100% backed by fiat

14 Mar, 2019 | Updated: 14 Mar, 2019
by Will Heasman
News
Tether makes a sneaky update to its terms: USDT is not 100% backed by fiat

The high divisive stable coin which faced huge controversy last year for various insolvency and manipulation allegations is once again facing flak from the crypto community after the discovery of the firms updated terms. According to the Tether website USDT is no longer claimed to be 100% backed by fiat…

The revelation was pointed out by a Reddit user known as Toyake, earlier today in a thread dubbed: “Tether once again pulls a sneaky update.”

Within the thread, Toyake explains that they noticed a subtle change to Tether’s terms.

A quick google search for the old terms returns the following definition of 100% backing:

“Tether is always backed 1 to 1 by traditional currency held in our reserves, So 1 USDT is always equivalent to 1USD” 

However, the newly updated terms read:

“Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.” 

Confirming the Redditor’s case against Tether, and their sly change of terms.

Essentially Tether has (quietly) admitted that USDT is no longer 100% backed by USD reserves, and may, in fact, include debts owed from loans, as well as “other assets.”

This caused quite a stir of speculation, with many postulating that “other assets” actually relate to cryptocurrencies.

Others Redditors pointed to the term “affiliated entities,” speculating that this may include Bitfinex.

Of course, this is a major point of contention seeing as both Bitfinex and Tether share a CEO in Jan Ludovicus van de Velde, an issue that some believe point to a clear conflict of interests.

Ironically many responses to this ‘revelation’ were fairly lukewarm, with a few noting that hs confirmed what many already suspected.

However, others were more outraged:

Tether has received its fair share of criticism, especially when it comes to its reserves.

Back in June 2018 Tether hired a law firm to check to conduct an independent audit of the firm’s reserves, the report claimed that every USDT in circulation was in fact backed by USD, however the report also noted several times that it was not an official security audit, once again causing concerns and given rise to speculation of potential insolvency.

Read more: What's going on with Tether? Trading as low as $0,86, 'a lot of volatility ahead'Tether has its bank deposits confirmed by law firm

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Read more about:Tether (USDT)Bitfinex

Poll

How do you feel about this change of terms?

(11 votes)

Add a comment

i think that there is nothing sneaky and suspicious. tether is still very reliable and safe asset to trade or invest in
14 Mar, 2019 - 15:22
actually, tether is backed. the author just reads between the lines
15 Mar, 2019 - 22:41
But it is still backed. What difference does it make?
14 Mar, 2019 - 18:37
actually no difference. but haters are around :\
15 Mar, 2019 - 07:46
nothing changed, just users can;t open Tether's website and read the update attentive.
19 Mar, 2019 - 05:21
Very important to read the last sentence: "Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.” According to this no problems or big changes with USDT.
14 Mar, 2019 - 21:49
no one reads it and thinks that tether is not backed. but it is!!
16 Mar, 2019 - 00:12
But this is assets of tether and debts owed from loans is also covered by dollars!
14 Mar, 2019 - 22:58
lol, sure. not all the users understand that tether is still backed so no issue to worry about
18 Mar, 2019 - 19:52
this is easy to understand that.unfortunately not all the users understand that usdc team just added transparency, nothing else
18 Mar, 2019 - 23:42
Tether just become more transparent and is still backed by real things including dollars.
15 Mar, 2019 - 00:30
unfortunately not all the community understand it. they just read title and see `TETHER NOT BACKED` and that's all, they don't think and analyze
15 Mar, 2019 - 08:30
absolutely right! good that tether holders know all they need
15 Mar, 2019 - 08:47
But it's still backed with money and whatnot. All of the rumors about its "not being backed" remain rumors now. USDT is in fact very much backed so what that it's not just by money.
15 Mar, 2019 - 08:34
omg, even someone knows how to read and analyze info! tether is still backed and it is the most important fact for us
21 Mar, 2019 - 01:51
This is a clear indication it is backed
15 Mar, 2019 - 17:15
ofc. someone just reads between the lines. tether is still backed and it is the needed info for us
17 Mar, 2019 - 11:01
the description was changed just to simplify the life of traders, write it in detail and specify everything
15 Mar, 2019 - 17:41
users just read media and don't look for more info. yeou are right, nothing changed with tether
17 Mar, 2019 - 05:34
include traditional currency and cash equivalents and, from time to time, may include other assets etc I dont see there any problem
15 Mar, 2019 - 18:36
Tether is still backed by real assets so nothing changed.
15 Mar, 2019 - 22:56
who cares about it?
real community users read the info attentive and noted, that tether is still 1:1 pegged. nothing happened
17 Mar, 2019 - 07:28
my conclusion is not to read media. The same thought is everywhere. Seems media writes in style of copy-paste lol
19 Mar, 2019 - 16:06
they just tell the truth
18 Mar, 2019 - 13:45
so about usdt update.
why not If it includes cash equivalents and loans, USD...?!
And....can we say that USD reliable?
Think twice then trade.
18 Mar, 2019 - 14:35
as tether is still backed up with US dollars and other type of securities and derivatives i think that this stable coin is reliable
18 Mar, 2019 - 18:04
so many haters of tether come back now ) but everyone knows that tether is absolutely credible stablecoin
18 Mar, 2019 - 22:09
omg, again tether haters make fud around it.
on ToS mentioned only details, but tether is still pegged 1:1
don't worry, guys
19 Mar, 2019 - 01:05
yes, it looks like the transparency, not like tether is about smth else.
19 Mar, 2019 - 08:09
Too many hype around this topic as well as clickbait headlines. Tether is still fully backed as it's written in its description.
19 Mar, 2019 - 22:07
as you see, haters make this in loud way. tether is still backed 1:1 so we have nothing to worry about
20 Mar, 2019 - 22:51
all these rumors are about nothing.
tether became more transparent for us and we have to be happy about it.
haters will shut up very soon!
21 Mar, 2019 - 01:00
all these are haters and that is all.
tether clearly told all on the updated ToS, we need only to read it attentive
21 Mar, 2019 - 03:03
Better to bring us real arguments against Tether if you want to talk like serious people – only kids insult each other online like you do it with Tether
21 Mar, 2019 - 10:01
Tether is backed by dollar and that is defined in ToS. Recent update doesn’t change this statement, but provides it with several explanations. That’s it.
21 Mar, 2019 - 12:37
tether hatear are always ready to make rumors but anyway this update was made for transparency
22 Mar, 2019 - 09:33
usdt added details on its tos and now we know all the info about how tether is backed and that it is pegged 1:1
22 Mar, 2019 - 18:18
i do not see anything strange in the activity of tether. reserves of the stable coin consist not only with US dollar but this does not mean anything. the asset is still safe and reliable
22 Mar, 2019 - 10:23
people what is a problem? these are only details on the ToS.
I see nothing to worry about it so much.
22 Mar, 2019 - 19:15

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