January 30, 2018 12:09 AM
The latest announcement regarding Tether’s audit cancellation leaves more questions than answers.
In a statement issued on January 27, 2018, by a company spokesperson, it has become clear that Tether and auditors at Friedman LLP will go their separate ways.
Tether, which issues the US Dollar Tether (USDT) at a 1-to-1 dollar-to-USDT ratio, has borne the scrutiny of skeptics regarding the validity of its fiat reserve. In response to these concerns, Tether had engaged the services of Friedman LLC last year, in order to review the adequacy of its reserves and, according to a company release last fall, “to analyze our bank balances and our issued and outstanding token balance on an interim basis.”
The sudden announcement of the audit’s cancellation may fuel the fires of doubters who regard Tether with suspicion. An audit would have gone a long way towards reassuring those that question Tether’s practices (such as issuing millions worth of USDT without readily-available clear balance sheet disclosures).
In a statement, a Tether spokesperson confirmed that “the relationship with Friedman is dissolved.” The statement went to say, “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 time frame. As Tether is the first company in the space to undergo this process and pursue this level of transparency, there is no precedent set to guide the process nor any benchmark against which to measure its success.”
Last year, on November 21, 2017, Tether was in the headlines because a treasury wallet under the company’s management was usurped of over 30 million USDT.
Regarding the split between Friedman and Tether, it remains unclear as to which party instigated the discontinuation of the business relationship.
Jeremy Nation is a writer living in Los Angeles with interests in technology, human rights, and cuisine. He is a full time staff writer for ETHNews and holds value in Ether.
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