Tether white paper says "At any given time the balance of fiat currency held in our reserves will be equal to (or greater than) the number of tethers in circulation."
At the same time they are showing a near million dollar negative reserve balance to USDT in circulation. Transperency
While the terms of service says "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." Terms of Service
Tether claims they are removing the counter party risk but they have far more counter party risk then a traditional bank! 1) you are subject to wallet hacking/theft that all blockchain users are subject to but that a traditional bank would insure on your behalf 2) you are subject to the same risks facing all banks with minimal reserves because tether has to bank their reserves that link to USDT 3) you are subject to the risk of the company itself, the same risk that faced bitfinex and mt.gox. Proceed with extreme caution!