The problem is they have never demonstrated they actually have the money. It's very simple really to ask your bank to provide a certified and digitally signed account statement. This routinely happens in audits. Tether has never showed this. So the accusation is that its operation is basically fraud.

But it's claimed that it's not really a peg system at all - that Tether were fraudulently created while claiming they were pegged.

yes and because someone wrote about it then it's true right? I can't think of anybody wanting to spread FUD to profit from shorting...for the life of me, really. Who is the manipulator in this case?

Except Tether hasn't actually proved they have the cash they claim. So why should we take their word that they're a peg system when they haven't proved it?