It's a valid point and I have to assume that as long as cryptos are flying high over the ace of spades, the USDT business model will stay afloat. The biggest issue I have, and why I buy into the arguments that it's maybe not backed at all is that tether's whitepaper as well as follow up comments by the team talk about transparency and auditible records that will be regularly published for anyone to verify all claims on reserves. This has yet to happen, so until it does, it begs the question in my mind, "why not?"
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@gibberishcode - They have made some efforts to provide greater transparency, example:
https://tether.to/wp-content/uploads/2017/09/Final-Tether-Consulting-Report-9-15-17_Redacted.pdf
It is concerning that these reports aren't coming out more often, but I think there might be concerns about disclosing too much information to competitors (and regulators) about where and how their money is being held.
Crypto is in an uncertain time where there's a great risk of government regulation or asset freezes for connections to illegal activities. Disclosing their banking information to too many parties could put Tether at risk.