Coffeezilla gives a comprehensive history of Tether, the stablecoin issued by a company controlled by the owners of Bitfinex. He lays out accusations that it is not fully backed.
Why Hacker News points people here: HN commenters recommend it as the best single, entertaining overview of Tether's dubious history, and cite it when arguing Tether lacks real USD backing.
“one of the most comprehensive (and entertaining) takes on this”HN comment, 2021
“one of the most comprehensive (and entertaining) takes on this”
Comprehensive, entertaining and damning take on Tether.
Full comment
A YouTuber called Coffeezilla had an entertaining video yesterday that I think is one of the most comprehensive (and entertaining) takes on this. It's pretty damning when you look at all the evidence together. this video Even in the off-chance that people with a track record of lying about being backed have suddenly gone legitimate, it's a pretty big indictment of the system that it could grow to the size it did while looking incredibly like a scam .
Recommends_fat_santaJun 2021
“Saw a really good YT video[1] on Tether yesterday. Breaks down all the sketchiness.”
Breaks down the sketchiness of Tether.
Full comment
Saw a really good YT video[1] on Tether yesterday. Breaks down all the sketchiness. But the problem he mentions in the video is a problem with pretty much all stablecoins, in order to function you must have the proper reserves before generating a token, but inevatably greed kicks in and you start thinking what if you minted coins without the backing. USD pegged stablecoins are basically money printing machines in the hands of whoever runs the project. [1]: this video
RecommendssantamexJul 2021
“This one explains the Tether scam quite nice”
Explains the Tether scam nicely.
Full comment
This one explains the Tether scam quite nice: this video Edit: summary: 8 people founding the tether company, 7 of them with a criminal background. Lying and denying and then admitting after they have no other option. Yeah, seems like a nice company…
RecommendsarcticbullJul 2021
“I also really enjoyed the Calacanis podcast with Bitfinex'ed [3] and the Coffeezilla [4].”
Among recommended resources on Tether.
Full comment
I highly recommend the first five Cas Piancey and Bennett Tomlin podcasts [1] and the (albit a little bit dated) Kalzumeus post [2]. I also really enjoyed the Calacanis podcast with Bitfinex'ed [3] and the Coffeezilla [4]. [1] link [2] link [3] link [4] this video
RecommendsyadaenoJul 2021
“very good video on the history and current state of tether”
History and current state of Tether.
Full comment
What I don't understand is why major exchanges continue to give tether their customers money when it's not backed by cash? Would an exchange not be incentivised to manage the cash themselves and significantly reduce risk for their customers and business? It seems like huge risk for what looks like a minor convenience. Also, very good video on the history and current state of tether: this video
RecommendsrichbellDec 2022
“I encourage you to watch Coffeezilla's video about Tether.”
Reveals shady dealings like borrowing from Bitfinex for audit.
Full comment
> I don’t hold any tether, and I wouldn’t recommend it to others. But the common opinion that Tether is insolvent might be wrong. Tether, as a stable business, is a money printing machine. I’m not sure it’d be worth risking the business and jail time to pump shitcoins I encourage you to watch Coffeezilla's video about Tether. There's lots of shady stuff going on behind the scenes, like them borrowing $383M from Bitfinex and showing that to an auditor to prove they were solvent (~20:00). this video
Recommendsudev4096Sep 2025
“I would recommend watching this video to grasp the scope of their fraud”
Grasp the scope of Tether's fraud.
Full comment
Bullshit. The biggest stable coin, Tether, is pure scam. They are essentially creating money out of nowhere. They were found guilty of massive fraud and were fined $18M [1]. They refuse to get audited by a third-party [2]. The ones that do audit them are just as sketchy as them [3]. I would recommend watching this video to grasp the scope of their fraud [4] [1] - link [2] - link [3] - link [4] - this video
Cites itgogopuppygogoJun 2021
Supports claim Tether prints unbacked money.
Full comment
Crypto currencies today are basically all decentralized Ponzi schemes inflated in value by the very centralized tether that is is printing something like $4Bn a week of new tether with no US dollar currency known to be backing it: this video
Cites itdanukerDec 2022
“This is the same trick pointed out by Coffeezilla about a year ago, about Tether.”
Source for attestation trick pointed out about Tether.
Full comment
Yes, on a centralized entity you're required to trust ("we're totally backed by cash and bonds, for realsies"), as opposed to owning and holding your crypto outright. From their web page: > Transparent > A top auditing firm will attest to the matching supply of BUSD tokens and underlying U.S. dollars on a monthly basis. Note the future tense, as in, "sometime indefinitely away in the future". Their attestations (as opposed to audits) just say that at a certain instant in time they had the required amount in a bank account. That means Paxos could have borrowed it for a short while. Quote [1]: "Any activity prior to or after the Report Dates and Times at 5:00 pm ET was not considered when testing the assertions described above." This is the same trick pointed out by Coffeezilla about a year ago, about Tether. [2] And the one from November is missing. [1] - link [2] - this video
Cites itrichbellDec 2022
“They used to, for several years, until they were pressured to prove it and could not (27:05).”
Shows Tether could not prove USD backing.
Full comment
> They don't claim it's backed 1:1 by USD. They claim it's backed by more or less liquid alternatives They used to, for several years, until they were pressured to prove it and could not (27:05). this video They were also investigated and found guilty by the New York Attorney General, and were subsequently banned from activity in New York and fined 18.5M. > Bitfinex and Tether recklessly and unlawfully covered-up massive financial losses to keep their scheme going and protect their bottom lines,” said Attorney General James. “Tether’s claims that its virtual currency was fully backed by U.S. dollars at all times was a lie. link
Cites itrichbellDec 2022
Supports claim Tether survived via deceptive attestation.
Full comment
> HN has been talking about how Tether is a scam and how it will blow up AnyMomentNow(TM) for two years Tether managed to come back from the brink of death (user loss of confidence) by co-mingling funds with Bitfinex and getting a third-party to provide an 'attestation' based on money they didn't actually have. This was only discovered years after the fact, and were it not for this deception they would have collapsed ages ago, much like FTX. this video
Cites itnailerJan 2023
Supports preferring USDC over USDT.
Full comment
Re: 2 and 3. I'd stick to USDC over USDT. this video . USDC still has capitalisation statements. USDT doesn't. Eth is indeed slow and expensive, but more people (as in: active wallets) use Solana (a fast and cheap layer 1) than the any of the eth layer 2s these days. Coinbase staff have been caught front running their customers on new tokens listings multiple times now, even after they promised to actively stop it. Whatever's going on in Japan is going on in Japan. Don't trust other people with custody of your funds.
Cites itjay-barronvilleFeb 2023
“Coffeezilla (on YouTube) has been exposing the Tether scam for almost two years now”
Coffeezilla exposing Tether for years.
Full comment
Coffeezilla (on YouTube) has been exposing the Tether scam for almost two years now [1]. Even as a crypto believer (long-term), it’s been fascinating to see this scam survive this long despite being repeatedly exposed. [1]: this video
CriticalnailerJan 2023
“Remember Tether is bullshit.”
Full comment
Remember Tether is bullshit. Pardon the bad language but it’s a scam and as someone involved in blockchain I hate it. this video
CriticalrichbellMar 2023
“They're experts in fraud and deception.”
Full comment
> Tether has lots of experience in this field. They were "pioneer" and they went through a lot worse: Tons of FUD, the Bitfinex exchange hack, lawsuits, bank runs etc... They're experts in fraud and deception. this video
