Issuing tether was basically an unregulated bank loan system. With a regular loan the created money is destroyed when you repay it. In theory that would happen

Issuing tether was basically an unregulated bank loan system. With a regular loan the created money is destroyed when you repay it. In theory that would happen to the tether when you redeem it for dollars. The problem is really just that tether was lying about how they were operating.