As it stands, according to Bitfinex (who is has same management as Tether) individuals do not buy tether from the Tether (the entity). They buy from Bitfinex, w

As it stands, according to Bitfinex (who is has same management as Tether) individuals do not buy tether from the Tether (the entity). They buy from Bitfinex, with dollars, transfer internally to Tether, Tether generates new tethers, they transfer to Bitfinex tether hot wallet, who then deposit in customers trading account. One issue, is that they just revealed this arrangement. The Tether website makes it look like you can both buy and redeem tethers through an online wallet on that site, but apparently nobody has done so. The core issue is, that despite promising to do so, Tether has not released an audit proving that they only issue new tethers on receipt of dollars. If in fact they are issuing them unbacked, they can easily fake demand for Bitcoin. Tethers are transferable via block chain between exchanges, and are used by exchanges without access to real US dollar banking to conduct trade in (nominal) across cryptocoin-USD(T) pairs. It’s unclear whether there have been any significance redemptions of tethers for dollars. There have been ~$800m tethers issued this year.