charts and diagram
tether and token redemption history
bitfinex/tether announcement claiming they would not make more tethers, yet continue to issue more
in december of 2016, the amount of outstanding tethers was around 6 million. today it stands at 65 million.
when people withdrew usdt/tethers from bitfinex new tethers would be issued and bitfinex became the legal owner of the USD on bitfinex, the usdt/tether token is not really backed by usd, and tether legally does not have to redeem them per their terms:
Tethers are not money and are not monetary instruments. They are also not stored value or currency. There is no contractual right or other right or legal claim against us to redeem or exchange your Tethers for money. We do not guarantee any right of redemption or exchange of Tethers by us for money. There is no guarantee against losses when you buy, trade, sell, or redeem Tethers. https://tether.to/legal/
bitfinex was then able to retire BFX tokens with that USD, since tethers are not legally redeemable per their TOS, they can choose to redeem these at their leisure or simply not at all. USDT/Tether are not legally their liabilities per the terms.
there are 65 million USD of tethers in the cryptocurrency space bidding up prices. people think these are backed but when you look at the fine print, they are not.