No one has seen any of their collateral or knows how much of it they actually have. I believe the finance people call this being over-leveraged but I'm not an expert. Seems kinda weird that the SEC hasn't looked into it.
Auditors quitting is never a good sign.
https://www.coindesk.com/markets/2018/01/27/tether-confirms-...
From the very same article: "Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable time frame."
Even Friedman LLP says in the internal memo “Do not rely on this report”.
It's been almost 4 years since that and no independent firm has ever audited Tether.
> In addition to market integrity, investor protection, and illicit finance concerns, the potential for the increased use of stablecoins as a means of payment raises a range of prudential concerns. If stablecoin issuers do not honor a request to redeem a stablecoin, or if users lose confidence in a stablecoin issuer’s ability to honor such a request, runs on the arrangement could occur that may result in harm to users and the broader financial system. Further, to the extent stablecoins are widely used to facilitate payments, disruptions to the payment chain that allows stablecoins to be transferred among users could lead to a loss of payments efficiency and safety and undermine the functioning of the broader economy. The potential for stablecoin arrangements to scale rapidly raises additional issues related to systemic risk and concentration of economic power.
I see this as the government equivalent of shouting from the rooftops. It's just a shame no one will treat it that way.
https://home.treasury.gov/system/files/136/StableCoinReport_...