Actually yes, because FDIC backing would mean they've gone through all of the necessary steps to become a real bank. I would have some confidence that they actually have the USD to back up their holdings as they claim. If still turn out to be a scam then at least I'd have something to fall back on, and some people over at the FDIC would have some questions to answer.

Not OP, but I presume the regulations would be important too. Part of being FDIC backed is maintaining a certain amount of currency that is VERIFIED.

Issue here is that there is no one giving confidence that Bitfenix has any currency at all, we have to trust their word.

If Tether was FDIC backed, it'd essentially be a bank with weird procedures for putting money in and getting money out.

No, as I said,

> Tether is sold as a fully-backed instrument, so there's major (potentially billions of dollars of) fraud if it's not fully backed

The fraud issue (not to mention the securities price manipulation issue) is still a big deal.