Tor hides your location from destination servers, but it does not encrypt <i>all</i> your communication. The last relay of a Tor circuit, called the <i>exit node</i>, establishes the actual connection to the destination server. This last step can be unencrypted, for example, if you connect to a website using HTTP instead of HTTPS.
Tor exit nodes have been used in the past to collect sensitive information from unencrypted connections. Malicious exit nodes are regularly identified and removed from the Tor network. For an example, see <a href="https://arstechnica.com/information-technology/2007/09/security-expert-used-tor-to-collect-government-e-mail-passwords/">Ars Technica: Security expert used Tor to collect government e-mail passwords</a>.
The Tor network has more than 6 000 relays. Organizations running Tor relays include universities like the MIT, activist groups like Riseup, nonprofits like Derechos Digitales, Internet hosting companies like Private Internet Access, and so on. The huge diversity of people and organizations running Tor relays makes it more secure and more sustainable.