The most reasonable explanation is that it is a Ponzi scheme. Which will appear to work right until it doesn't. And if it stops working, the entire crypto universe will implode.
That said, the current President and many who are close to him have significant portions of money invested in crypto. That depend on Tether. There is therefore a reasonable expectation that the US government will covertly back Tether for the next several years if there is any prospect of a collapse.
This expectation is supported by Trump's declaration last March of creating a "strategic crypto reserve" for the USA. See https://www.whitehouse.gov/presidential-actions/2025/03/esta.... On the face of it, this executive order only helps crypto by taking some of it out of circulation. But the provision in 3C of creating "budget neutral" strategies for acquiring more bitcoin, could easily cover converting actual USD to Tether. Particularly if the Tether was available at a discount to the USD.
There is no reason not to do an audit except when it’s a scam/all money gone. No accounting company wants to do their audit - guess why.
You didn't answer the audit question, which is really important.
I mean they might, maybe. But you can't point to the law as proof of something when the thing you're defending doesn't follow the law.
If you look at their yearly profits and liquid cash, clearly Tether is backed by something. This is not the same as saying that they have full transparency but you cannot have those profits in dollars out of thin air.
Usually the correct answer is the simplest - fraud.
Any evidence that they actually own?
“ In its own attestation report for Q2 2025, Tether stated it holds about US$127 billion in U.S. Treasuries” this is the only source. And tbh anyone can “attest” it owns billions of whatever. Again, no audit because there is nothing there. They only attest through BDO Italia. And attestations are easily gamed. Usually worthless, but useful for usdt hodlers.
I wonder why they use bdo? See below their history.
About bdo:
In the UK, a former senior manager at BDO (in the UK member firm) was banned for 20 years for creating false audit documents and mis-using signatures.
In July 2025 the UK regulator Financial Reporting Council (FRC) flagged the BDO network as having audit quality “significantly short of expectations”. Only about half the audits reviewed were deemed satisfactory