Tether has officially confirmed that the firm, Friedman LLP, in charge of auditing the company has been officially terminated.
Tether is a cryptocurrency and service that claims to back each tether token with the respective currency. in this case, USDT is, according to Tether, backed 1:1 by US dollars. This means that for every tether token issued, Tether the company has one dollar in a bank account owned by them.
There has been much controversy over whether Tether actually has these funds in their account. In fact, on 6 December 2017 the Commodity Trading Futures Commission (CTFC) sent a subpoena to Tether in order to get the company to prove that they do in fact have at minimum of 2,3 billion USD in reserves. Tether has responded publicly to a large amount of concern regarding their business’ stability by providing this document from Friedman LLP which shows that they had $443 million and 1,590 euros ($1,970) in bank accounts as of September 15. At that time, 420 million USDT tokens had been issued. Friedman said in its report that it didn’t investigate the reliability of Tether’s records.
“Given the excruciatingly detailed procedures Friedman was undertaking for the relatively simple balance sheet of Tether, it became clear that an audit would be unattainable in a reasonable timeframe,” Tether said in relation to terminating the relationship.
Tether also gave the following statement in the announcements section of their website:
“Friedman LLP has been engaged to perform historical balance sheet audit procedures for Tether Limited. However, as the amount of Tethers in circulation has increased substantially in recent months, we have also asked Friedman to analyze our bank balances and our issued and outstanding token balance on an interim basis. Friedman agreed to perform consulting services for us in an effort to provide management with useful information concerning Tether’s cash position and Tether tokens issued and outstanding as of an interim date. Friedman was able to provide consulting services for us on an expedited basis, using a procedures date of September 15, 2017. These consulting services do not constitute an audit or attestation engagement, which would include a significantly expanded scope of procedures and take substantially more time to complete.
We hope that the community considers the attached memorandum for what it is: a good faith effort on our behalf to provide an interim analysis of our cash position and our issued and outstanding tokens, as part of ongoing efforts to further professionalize the transparency mechanisms of Tether Limited.
We thank all of our users for their continued patience and support.”
Since then, the company has not released any further information, nor provided any details on the tokens released after September 15th, and therefore the public has no real proof that the token is stable. This is a matter of concern for many users, in particular after the implosion and shutting down of Bitconnect and many other cryptocurrency based scams.
Tiaan Wolmarans is a cryptocurrency investor and trader, airplane pilot, musician, and writer.
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