How can it "become backed"? Anyone who buys Tether expects to get Tether tokens. If the issuers created Tether tokens from nothing, there's no way they can become backed. Where would the money come from?
Tether isn't redeemable, anyway. You can't go to the Tether issuers and demand a dollar for your Tether token.
Financial Times:
Meanwhile, the supply of Tethers rapidly ballooned, from $50 million to $2.2 billion. That led to an increasing number of questions over whether the dollars that were meant to back the cryptocurrency really existed. It was reported in January that both companies had been subpoenaed in December last year by US regulators, who wanted to look into this.[1]
No no, if you can acquire a $6,000 bitcoin for $0 and sell it, your scam has a 100% margin. It is still profitable whenever you can run the scam, at whatever price above $0.
Right, but if they acquire $6000 for 20000 tether (that they paid $0 for), and promise that tether is full redeemable for $20000, they are $14000 short when the tether holder comes knocking.
What if tether is the tether holder and they simply decide to never call in that debt against themselves? That would mean they lost their own money, but they still may have made enough money over the course of the entire scheme to pay off their "legitimate" customers and thus avoid getting publicly called out.
So long as the printing press keeps running, the solution is to print yourself another 14000 in tether, convert to BTC and sell the BTC for 14000 in real USD.
Tether isn't redeemable, anyway. You can't go to the Tether issuers and demand a dollar for your Tether token.
Financial Times: Meanwhile, the supply of Tethers rapidly ballooned, from $50 million to $2.2 billion. That led to an increasing number of questions over whether the dollars that were meant to back the cryptocurrency really existed. It was reported in January that both companies had been subpoenaed in December last year by US regulators, who wanted to look into this.[1]
[1] https://ftalphaville.ft.com/2018/06/13/1528904202000/Has-bit...