[wmf]

By Tether's own admission, you can't cash out. Tether's backing would only matter when cashing out but since you know you can't cash out... it doesn't matter?

I also think people who care about Tether's shadiness have self-selected out of crypto and the remaining traders just treat it as yet another existential risk not to worry about.

[ryanlol]

As long as Tether maintains the peg on exchanges you can cash out, this is no different than cashing out directly via Tether

[wmf]

When you sell USDT on an exchange the money comes from another trader; this works as long as there are traders who want USDT. If you could redeem and destroy USDT from Tether the money would come from the reserve. If aggregate demand for USDT drops enough then it will matter.

[alisonkisk]

Isn't it Tether itself who "wants USDT"? That's how they maintain the peg.

[wmf]

No, they don't maintain the peg at all.

[ryanlol]

This is strictly not true, Tether makes trades on exchanges in order to maintain the peg.