from Patrick McKenzie | by Patrick McKenzie

Now normally you'd think "But wait, why does Tether need market stabilization? They're a money market fund holding perfectly liquid Treasuries and generate risk-free yield." But some Tether co-conspirators are apparently a little worried what happens if they stay depegged. t.co/z8DdfoskVK

I've mentioned this before but I am short an insignificant-to-me amount of money on Tether largely for entertainment value and getting my friends/etc off my back about not being a DeFi user.

Which I mention out of high conscientiousness; I've called them the largest fraud since Madoff in print for years, which should both count as sufficient reputational skin in the game and also alert everyone to "Wow I think Patrick possibly has a point of view here."

By the by: it is a matter of the public record that Alameda were their loyal proxies for interfacing with the U.S. financial system to the tune of many tens of billions of dollars. Tether may, ah, have preferred worlds in which Alameda's books never end up under microscope.

"Wouldn't it be something if they blew up while being innocent?" No no no, that's not the theory. The theory is that another blowup costs them the cover they needed for past and/or ongoing bad deeds to stay hidden. This is an extremely common element in how frauds are discovered

OG Madoff, for example, would have been fine for even longer had the global financial crisis (which he was totally innocent of causing!) not caused his well-off depositors and fund-of-funds to say "Well shucks Bernie we find ourselves in need of cash; can you wire us our profits"

"Uh I can't wire $7 billion." "Haha Bernie such a kidder! No but seriously, we need it by the end of the week. Have you seen the markets it is a bloodbath out there. Good thing you alone were prudent in avoiding it."

"Yeah uh I don't know how to say this but... well..."