Tether engaged former FBI director’s law firm for unofficial audit
Findings provide “independent verification” that all circulating USD Tethers are backed by USD reserves.
Tether has released a statement that suggests that the company does have sufficient US dollar reserves to back up its claims of authenticity, following an unofficial audit by former FBI director Louis J. Freeh’s law firm.
Tether is a digital currency reportedly pegged to the US dollar. This allows it to act as a market stablecoin.
In a transparency update on its website, Tether revealed that earlier this year it had engaged US law firm Freeh, Sporkin & Sullivan LLP (FSS) to carry out a review of its bank account documentation and to perform a randomized inspection of the numbers of Tethers in circulation and the corresponding currency reserves.
FSS reportedly conducted comprehensive in-person interviews with key personnel at Tether and its banks. These examinations took place in Washington, D.C. and elsewhere in the US and around the world. Those interviewed included the company’s chief operating officers, chief technology officer, chief compliance officers, account relationship managers, general counsel members and others.
The firm was also granted access to Tether’s 2018 AML/anti-terrorist financing risk advisory report, extensive documentation on Tether’s account registration process and procedures, unredacted consulting reports, bank account information and paperwork and documentation with respect to personnel and corporate structure.
“The FSS report, based on a random date balance inspection and a full review of relevant bank account documentation, confirms that all Tethers in circulation as of June 1, 2018 are fully backed by existing USD reserves,” Tether said in a statement.
However, FSS stated that it was not an accounting firm and “did not perform the review and confirmations using generally accepted accounting principles,” according to its full report. “FSS has not performed any procedures or made any conclusions for activity prior to or subsequent to June 1st, 2018, close of business.”
Tether said that transparency efforts will continue. However, it is the company’s hope that the unofficial report helps address consumer concerns as these issues continue to be examined by potential assurance advisers.
All Tethers in circulation are fully backed by USD reserves. Full stop. Memoranda, consulting reports, industry leaders, cryptocurrency pioneers and competitors have all confirmed this. Reserves have always, and will always, match the number of Tethers in circulation.
Tether in a statement regarding Freeh, Sporkin & Sullivan LLP’s findings
Tether and Bitfinex have been the subject of scrutiny over the course of the past several months.
A research report released last week, using algorithms to analyze blockchain data, suggests that Tether may have been used to influence the price of bitcoin and other cryptocurrencies during the recent price explosion. However, the report cannot definitively prove price manipulation. Patterns suggest that exchanges with support for Tether saw prices of alternative coins increase more than on exchanges that did not support Tether.
You can learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.
- Bitcoin weekly price analysis 28 August: Token’s value soars in face of ETF rejections
- Most global companies are slow to adopt blockchain technology: PwC survey
- Leading universities are offering a growing number of crypto courses: Coinbase
- Cryptocurrency: Value-making coins vs value-giving coins
- EOS weekly price analysis 27 August: Coin’s value jumps due to US$1 million whale