If Tether is legit - newly printed Tether can only represent new dollars, as you can't create Tethers by selling Bitcoin for them.
I don't believe Tether is legit, they don't do audits and even their attestations do not break down the make up of their reserves. I do think they have reserves, but they've been playing a dangerous game - and it certainly doesn't operate as they have described it in their white paper.
Everyone says that they don't think Tether is legit, but the train keeps on going.
They had a court case, and I think they just settle that down. Not a 100% sure.
I'm also in doubt about their reserves, but the thing is they keep operating without any major issues.
Although there was one time in 2018 when the USDT dropped to 0.9$ ... but recovered fast. I'm wondering will we see something like that in the next bear market :)
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South Sea Company operated for 31 years as a scheme, Enron 16 years, Bernie Madoff's scheme lasted 17 years. Tether is not that long in the tooth yet.
That settled court case did not clear them of wrongdoing, in fact the attorney general still claims their investigation found Tether lying about their reserves.