That is an interesting question.

Digital "currency" is unregulated so the question is which law is violated.

If, in purchasing a tether, there is some underlying contract that says the tether is backed by a dollar, then you might claim a violation of the contract. You may have to look at the fine print. Who was the counter party? What were the terms? Who is on the hook for it? Is it an entity that is outside the US?

However, if there isn't such a contract and someone makes the claim, you might claim there was an implied contract. This is harder. Not being a lawyer, I won't even venture to guess how this would play out.

In the absence of those two, I don't know if you can claim there was a violation of the law.

Edit: There is one more law you can violate, and this is the obvious one: Fraud!

In the US it is fraud if:

- somebody misrepresents a material fact in order to obtain action or forbearance by another person,

- the other person relies upon the misrepresentation, and

- the other person suffers injury as a result of the act or forbearance taken in reliance upon the misrepresentation.

So now the question is where is the injury? Especially if they are able to sell of Bitcoin and actually back up the Tether?

Now it might be a question of: the buyer took a risk they had not intended on taking.