The problem with Tether is that for all we know, it could be completely unbacked and therefore worthless.
On the other hand maybe people holding a lot of USDT wouldn't not want to tell anyone else if they were unable to redeem it before they had sold it all on the exchanges...
Have there been reports of people using the exchange successfully?
There were no reports of Bernie Madoff not being able to repay investors until the day he ran out of cash.
His kids reported him to the police before they could be found out by anyone else. Of course, as part of the reporting, they also got immunity from the consequences of the company they worked for being an elaborate ponzi scheme.
I suspect it's highly likely that this was a scheme they came up with to ensure that no one in the family, other than Madoff himself, would have to suffer the consequences of their crime.
Until the day it collapsed. It collapsed because he didn't have enough cash to cover withdrawals and he could not find new victims.
That's how all Ponzi schemes collapse.