Earlier this year Tether engaged Freeh, Sporkin & Sullivan LLP to review bank account documentation & to perform an inspection of the numbers of Tethers in circulation & the corresponding currency reserves.
The report can be viewed in its entirety here: https://t.co/BeLXhQY6FV
— Tether (@Tether_to) June 20, 2018
In the company’s “Transparency Update,” Tether shares that it had engaged Freeh, Sporkin & Sullivan LLP (FSS) earlier this year to review bank account documentation and to perform randomized inspections on the USD currency reserves.
FSS, a Washington-based law firm founded by a former Director of the FBI, conducted a number of comprehensive in-person examinations and telephone interviews of key personnel at Tether and its banks to confirm balances in accounts owned or controlled by Tether.
In the face of some recent coverage, we have stood by the fact that all circulating USD Tethers are backed by USD reserves, and we are pleased to be able to present independent verification of this.
FSS randomly selected June 1st as the date for balance inspection, showing that Tether had reserves of $2.54 billion, which interestingly is in conflict with CoinMarketCap data that shows a total of about 2.8 billion USDT.
It’s important to note that this inspection does not constitute a formal audit. When asked why one was not conducted, Tether’s general counsel Stuart Hoegner told Bloomberg that large accounting firms are not taking on cryptocurrency clients at this time.
“The bottom line is an audit cannot be obtained […] The big four firms are anathema to that level of risk. We’ve gone for what we think is the next best thing.”
This report was released just a week after a paper was published by a professor at the University of Texas titled “Is Bitcoin Really Un-Tethered?” claims that fraudulent transactions of Tether were responsible for approximately 50% of the meteoric rise in Bitcoin and 64% of other top cryptocurrencies.
While this is a step in the right direction, Tether states that its plans to further expand transparency efforts to address concerns from investors and regulators.