critique:  Tether is a ponzi-scheme; new units are issued out of thin air and used to buy bitcoin, dramatically and artificially inflating the price of BTC.

rebuttal:  There is indeed a lot of uncertainty around various details of tether, but there is no serious evidence of unbacked new issuance artificially inflating the price of bitcoin. This is a detailed topic beyond the scope of this page, so this section will primarily point readers to an array of detailed content addressing the issue.

1) Bitfinex, Tether settle with New York's Attorney General for $18.5 million: https://www.theblockcrypto.com/post/95207/bitfinex-tether-new-york-ag-settlement-lawsuit


2) Academic papers showing tether issuance does not cause BTC price movements:

"The Impact of Tether Grants on Bitcoin", by Wang Chun Wei, 2018
Abstract:
In recent years, Tether issuances (or 'grants') have increased significantly, which correlated broadly with a significant rise in Bitcoin valuation. This paper examines the impact of cryptocurrency issuances on subsequent cryptocurrency returns. It is argued that as Tether is the undisputed 'stable coin', the minting of new Tether acts similarly to monetary expansion in cryptocurrency markets, inflating the prices of Bitcoin. We construct a VAR model and show contrary to investor expectations, Tether issuances do not impact subsequent Bitcoin returns, however, they do impact traded volumes. We also document an increase in Tether trading following a subsequent decrease in Bitcoin returns. This illustrates investor preferences for lower volatility crypto-assets in periods following negative Bitcoin returns.


"What Keeps Stablecoins Stable", by Lyons and Viswanath-Natraj, 2019, 2020
Abstract:
We take this question to be isomorphic to, "What Keeps Fixed Exchange Rates Fixed?" and address it with analysis familiar in exchange-rate economics. Stablecoins solve the volatility problem by pegging to a national currency, typically the US dollar, and are used as vehicles for exchanging national currencies into non-stable cryptocurrencies, with some stablecoins having a ratio of trading volume to outstanding supply exceeding one daily. Using a rich dataset of signed trades and order books on multiple exchanges, we examine how peg-sustaining arbitrage stabilizes the price of the largest stablecoin, Tether. We
find that stablecoin issuance, the closest analogue to central-bank intervention, plays only a limited role in stabilization, pointing instead to stabilizing forces on the demand side. Following Tether’s introduction to the Ethereum blockchain in 2019, we find increased investor access to arbitrage trades, and a decline in arbitrage spreads from 70 to 30 basis points. We also pin down which fundamentals drive the two-sided distribution of pegprice deviations: Premiums are due to stablecoins’ role as a safe haven, exhibiting, for example, premiums greater than 100 basis points during the COVID-19 crisis of March 2020; discounts derive from liquidity effects and collateral concerns.


"On the Role of Stablecoins in Cryptoasset Pricing Dynamics", by Ladislav Kristoufek, 2020
Abstract:
We examine the interactions between stablecoins, Bitcoin, and a basket of altcoins to uncover whether stablecoins represent the investors' demand for trading and investing into cryptoassets or rather play a role as boosting mechanisms during cryptomarkets price rallies. Using a set of instruments covering the standard cointegration framework as well as quantile-specific and non-linear causality tests, we argue that stablecoins mostly reflect an increasing demand for investing in cryptoassets rather than serve as a boosting mechanism for periods of extreme appreciation. We further discuss some specificities of 2017, even though the dynamic patterns remain very similar to the general behavior. Overall, we do not find support for various scandalous claims about stablecoins.


3) Nic Carter on Grant Williams podcast, debating Mike Green about BTC in general, and about what's reasonable to worry about with respect to Tether specifically (2nd half of the episode): https://ttmygh.podbean.com/e/gwp_002/


4) Tether’s Bank Deltec Says Stablecoin Is Fully Backed by Reserves: https://finance.yahoo.com/news/tether-bank-deltec-says-stablecoin-141533131.html


5) Tether Produces More Than 2.5 Million Documents to NYAG: https://decrypt.co/54715/tether-produces-more-than-2-5-million-documents-to-nyag


6) Crypto exchange Bitfinex says it repaid $550 million Tether loan central to fraud probe: https://fortune.com/2021/02/05/bitfinex-repaid-550-million-tether-loan-central-to-fraud-probe/


7) Dan Matuszewski, Founder of CMS Holdings and former head of trading at Circle Financial, sheds light on crypto market structure, tether's growth, and executing large tether redemptions: https://onthebrink-podcast.com/dan-matuszewski-ii/