> Ponzi schemes also only harm those who inflict it on themselves
Ponzi schemers lie to their investors. (Madoff purported to run a reputable shop.) It’s harder to argue, to the broader public, that someone buying Tether with Bitcoin could reasonably think they made a legitimate investment.
If USDT is not 1:1 backed by USD, so does Tether. If Tether and Bitfinex are different faces of the same group, and Bitfinex treats USDT and USD equivalently on their exchange relying on Tether’s backing claim as justification, so does Bitfinex.
A lot of exchanges don't give you the choice and just give you Tether when you sell Bitcoin. What are the odds that a lot of people don't know the difference between USDT and USD?
When I first started some time last year, I wasn't sure what "USDT" was but I didn't care terribly because a) it's easier to calculate things mentally versus the BTC worth of a coin which looks like .000003456 which is a nightmare to picture; b) I trusted the exchange.
So yeah, I'd absolutely smack the exchanges for passively perpetuating a fraud which has been talked about for months now.
Think it's probably easier to argue to the public that this thing which the company said was a convenient digital way of converting other digital assets to dollars but lied about the dollars suckered innocent people than most bog-standard "we've found a totally legitimate way of earning 100% weekly returns but we're really struggling to get the finance for it so we'll even pay your referral bonuses on top for promoting it" Ponzi scams.
There are plenty of examples of cryptocurrency related scams that present themselves as a legitimate investment.
Aside from that, I think an argument could be made that bitcoin itself is a form of pyramid scheme. I'm not sure if I 100% agree with that, but I understand the line of reasoning.
I'm glad regulators are looking into this and asking these questions.
Ponzi schemers lie to their investors. (Madoff purported to run a reputable shop.) It’s harder to argue, to the broader public, that someone buying Tether with Bitcoin could reasonably think they made a legitimate investment.