THE TETHER FRAUD ALLEGATIONS

Summary from the TLDR Crypto newsletter

The New York Attorney General's investigation revealed Tether was only 74% backed when confronted, operating without banking access globally from mid-2017 to September 2017 while holding just $61 million against 442 million tokens in circulation, with executives admitting under oath to using customer reserves as a "corporate slush fund" to cover Bitfinex's $850 million losses. University of Texas research identified specific manipulation patterns where 95 one-hour periods representing 1% of trading time accounted for 60% of Bitcoin's price gains, with purchases timed following market downturns and attributed to a single large entity operating across exchanges. Despite $61 million in regulatory fines, an ongoing DOJ investigation, and never completing the independent audit promised since 2015, Tether has grown to over $120 billion circulation, potentially becoming "too big to fail" as exchanges, institutions, and regulators may prefer maintaining the illusion rather than triggering a collapse that could eliminate $2-2.7 trillion in cryptocurrency market value and destroy the industry's foundational legitimacy claims.