Tether has been the subject of immense scrutiny as critics raise questions about the company’s dollar reserves. But Tether released a transparency update on June 20th that says a law firm has confirmed, as of June 1st, the company’s “unencumbered assets exceed the balance of fully-backed USD Tethers.”
Tether’s Troublesome Road
Tether, the cryptocurrency pegged to the United States Dollar, has many doubters. A sensationalist article in the beginning of the year from News.com.au asserts the stablecoin is a “ticking time bomb” after accusing the Bitfinex exchange of creating USDT without having adequate USD reserves.
The company split with Friedman LLP in late January amid concerns about an auditing timeframe. Tether says Friedman’s “excruciatingly detailed procedures” made it clear “that an audit would be unattainable in a reasonable amount of time.”
Two researchers at the University of Texas at Austin claimed they found potential evidence of Bitcoin and major altcoin price manipulation that was due to Tether flooding the market. The paper, published on June 13th, entitled Is Bitcoin Really Un-Tethered?, asserts that blockchain data analysis found “purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices.”
Tether acknowledged the scrutiny in their latest transparency update and write how they believe “much of the speculation and negative reporting” is due to “misunderstandings” about how Tether functions.
‘Reserves Match Number of Tethers’
According to the update, Tether enlisted the services of Freeh, Sporkin & Sullivan LLP (FSS) to look over bank account documents and to randomly inspect circulating Tethers and corresponding USD reserves. The FSS report says balance confirmation dates were chosen without giving any notice to Tether.
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
The firm writes:
FSS is confident that Tether’s unencumbered assets exceed the balance of fully-backed USD Tethers in circulation as of June 1st, 2018.