[jqpabc123]

Tether allows USDT to be redeemed for USD.

It is only allowed for verified customers --- those with $100,000 or more to redeem. This severely limits any exposure to a bank run.

If Tether was minting unbacked USDT, then Tether would eventually be shown to be insolvent.

By whom? Lots of people think it's always been insolvent. Can you prove it's not?

executing a pump and dump scheme is a lot of work and very risky for very little reward with such expensive, highly traded asset like BTC.

When you have control and influence over both the pump and the dump, it's easy. And price is pretty irrelevant when you can just mint money and "loan" it to select others (aka "whales") so they can participate.

https://www.wsj.com/articles/rising-tether-loans-add-risk-to...

   The company behind the tether stablecoin has increasingly been lending its 
   own coins to customers rather than selling them for hard currency upfront.

[halpmeh]

I think you're "begging the question." You believe that Tether is a fraud. You're using the fact that the price on a CEX and DEX are the same to justify that belief. "See, the price on a DEX matches that on a CEX, therefore Tether is a fraud."

Whether or not Tether is a fraud has nothing to do with the price match on a CEX and DEX. The price on CEXs and DEXs will always match due to arbitrage.

(This isn't a statement on whether or not Tether is a fraud. I'm just pointing out that the price on a CEX and DEX will always match with sufficient liquidity in the market).

[jqpabc123]

Whether or not Tether is a fraud has nothing to do with the price match on a CEX and DEX. The price on CEXs and DEXs will always match due to arbitrage

Agreed.

The point is --- any market manipulation will affect DEX the same as CEX. People often erroneously point to DEX as a way to avoid CEX influence and control. It's not.

[halpmeh]

I'm still not understanding the correlation between a centralized exchange and perpetuating a scam. Tether doesn't rely on a centralized exchange. If an entity, centralized exchange or otherwise, is willing to pay off the entire market to perpetuate a scam, then yes, DEXs will be impacted. That doesn't seem related to whether or not an exchange is centralized.