Have you considered they may have audited it themselves? Just because there wasn't an audit published by an external auditer that doesn't mean no one has ever audited their accounts.
I would consider this every bit as bad. “We marked our own homework! And guess what? It was great!”
The whole concept is ludicrous.
Internal audits still have value as it means that someone can't steakily steal money from the reserves without them noticing.
Further, they paid $41 million to settle a case over their lies - https://fortune.com/2021/10/15/tether-crypto-stablecoin-fine...
I don't think it's a stretch at this point to say they have a history of, at the very least, being highly economical with the truth and misrepresenting their own level of transparency. And I do think your argument is unreasonable.
Take a look back to 2017 on the wayback machine -
"Every tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USD₮ is always equivalent to 1 USD."
"Our reserve holdings are published daily and subject to frequent professional audits."
We know that neither of those things was true.
For years their website claimed that the company was regularly audited, when they hadn't (still haven't AFAICT) undergone a single audit.
> This has to do with the auditing companies being risk adverse as regulatory pressure around crypto increases.
In at least some cases I think it has more to do with concerns over how the reports they were producing were being used by their clients -
"Mazars Group said in a statement to CNBC that it had “paused its activity relating to the provision of Proof of Reserves Reports for entities in the cryptocurrency sector due to concerns regarding the way these reports are understood by the public.”
“They do not constitute either an assurance or an audit opinion on subject matter. Instead they report limited findings based on the agreed procedures performed on the subject matter at a historical point in time,”
https://www.cnbc.com/2022/12/16/mazars-suspends-all-work-wit...