Moderate risk — the gold may be real, but Tether's corporate reputation makes this token fragile during any company-wide crisis
Risk Breakdown
Top Risks
Tether corporate contagion risk: despite separate legal structure, XAUt's association with Tether (USDT issuer) creates reputational and regulatory risk if parent company faces enforcement actions or banking failures
Physical redemption barriers: 50 oz minimum redemption (~$130K+) and requirement to physically access Swiss vaults makes exit impossible for retail holders during stress events, forcing fire sales at discounts
Custody opacity: while Tether claims 1:1 backing by LBMA gold in Swiss vaults, monthly attestations are less rigorous than NYDFS-regulated competitors like PAXG, creating uncertainty about actual reserve ratios
Frequently Asked Questions
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