NYAG, US DOJ and CFTC all found it was backed, from their own subpoenas. NYAG settlement with Tether forces them to keep updating disclosures.

Its 2/3rd backed by dollars and 1/3rd a mixture of commercial paper, which we don't have further information about. Rumor mill always swirls about that paper, but its probably not that controversial and would only be 33% of Tether. Likely would result in a liquidity crisis if more than 70-80% of Tether's were redeemed at once. Although I wonder if that's even possible now given how much USDT is locked in DeFi apps and liquidity pools and burned.

(Projects often lock assets in a liquidity pool share and then destroy their access to that share, to ensure to their community that there is always the ability to trade)

So Tether will probably continue working for partially the dumbest reasons.