Tether's Q2 Windfall Hides Grim Warning for Crypto Users

Tether's profits have reached $1.5 billion in Q2 amid the ongoing turmoil in the crypto market.

This figure is staggering, especially when compared to other cryptocurrencies that are struggling to stay afloat. Bitcoin has been down, exchanges have shut down, and hardware wallets have gotten hacked, but Tether seems to be unaffected by these issues.

The key to Tether's success lies in its ability to keep the yield on user deposits while users themselves get nothing from it. This strategy allows Tether to maximize profits without having to worry about providing any returns to its users.

However, this approach has a dark side. The excess reserve cushion that is supposed to protect users has plummeted by 50% in just three months, falling from $8.23 billion to $4.11 billion. This drastic reduction raises questions about Tether's commitment to user safety and security.