source: tether logo. edits.

Plastic Surgeons Are the Best Bankers.

The objective reasons for Tether’s opaque reserve reporting.

George Salapa
4 min readJul 17, 2022


Digital tokens conjured by a child actor from the The Mighty Ducks, run by an ex-plastic surgeon from Italy, banked in the Bahamas by a bank owned by the co-creator of Inspector Gadget.

Tether, one of the most gratifying subjects of financial journalism, has been blessed by many good lines like this, written by FT, Bloomberg and many other reporters on a quest to untangle its bizzare past.

The central question of all these articles? Why has there not been a bank run yet? How do people send hundreds of millions of dollars every day to the Inspector Gadget banker to mint them Tethers to trade without knowing where their dollars go. Why have they not, on so many occasions of doubt (from court cases to fines by CFTC, all regarding Tether’s reserves) rushed to redeem their dollars all at once?

Bizzare as it is, Tether continues to stand. Not even the dramatic demise of Terra-Luna at the moment of peak distrust in anything-crypto-representing-real-money, could bring Tether down. So far, at least. And yes, this article might age very badly, but let’s go:

Tether as you will know is a depositary stablecoin, meaning it guarantees that for every $1 of Tether, it holds a $1 somewhere in safe and liquid form. The problem is, where. No one really knows.

Tether’s secretiveness, its unwillingness to disclose its reserves on a granular level has brought the company trouble, entertaining publicity and million dollar fines.

So, like, why? OK, there are some explanations.


Some argue that Tether is a bad bank. Because, if you think about it, that is what Tether is, a bank. It takes in deposits that it should keep safe and mints tokens.

Unlike bank, it does not pay any interest to its depositors, and also unlike bank, its capital requirements are virtually none (0.2%). It does not want to show what it is doing with the reserves, really, because it uses them to earn interest on risky stuff, which is pure profit for Tether, i.e. the ex-plastic surgeon and his crew.




George Salapa

Founder finstora. Thoughts on money & culture. Some poetry. Mostly recycled literature. Wrote for Forbes and Venturebeat before.