I believe Tether's claim is essentially "We can't tell you what dollar-denominated assets we're backed by, or get any competent auditors to sign off on our accounts, but the reserves are there. Trust us. Would a cryptocurrency company lie to you?"

Could be a piece of tissue paper with an IOU for a trillion dollars from Deadbeat Dan. Could be a deed to lovely waterfront property on the moon. Could be a controlling interest in Bitfinex. We don't know.

It's backed by Tethers.

They won't say.