Tether used to claim that 1 USDT was backed by 1 USD in reserves. This has now been silently changed to
Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.
They openly admit they send funds to bitfinex.
USDT is now officially not backed 100% by USD.
I guess we're back to trusting 3rd parties, running fractional reserves, to run the market.
Proof of funds link also leads to a dead page.