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The controversial cryptocurrency Tether (USDT), which is pegged to the dollar on a 1:1 ratio, has issued a detailed clarification refuting the allegations and a random account verification report issued by Freeh, Sporkin & Sullivan LLP (FSS), a Washington-based law firm. With this clarification and law-firm’s report, Tether hopes to put an end to all kinds of negativity surrounding the cryptocurrency.
While Tether acknowledges that it has failed to engage the greater crypto community, the company believes that much of the rumors were because of a lack of proper understanding of how Tether functions. To clear the air, Tether has once again reaffirmed that all Tether tokens in circulation are fully backed by the greenback reserves. Tether further states that industry leaders, consulting reports, cryptocurrency pioneers, competitors, and memoranda have confirmed this. Furthermore, Tether says that the reserves have always matched the tokens in circulation and will be so in the future.
Tether has also spoken about Bitfinex, which is generally perceived to be working as hand in glove with the former. Tether maintains that it shares a healthy and transparent relationship with financial institutions, banks, regulators, government agencies, and law enforcement. All users of Tether on Bitfinex have to pass through the compliance system prepared in collaboration with law enforcement agencies, industry experts, and regulators.
Tether management has also pointed out that all “all issued, redeemed, and existing Tethers, including all transactional histories, are publicly auditable by means of the tools provided at Omnichest.info and Etherscan.io.”
Furthermore, to reinstate trust among retail cryptocurrency investors, Tether employed the law firm Freeh, Sporkin & Sullivan LLP (FSS) to conduct a detailed review of the bank account documents. The law firm was also given a free hand to perform a randomized cross checking of the Tethers in circulation and corresponding currency reserves. FSS, which provides investigation, monitoring, and legal services to organizations across the globe, was established by three former Federal judges, including a formal director of the FBI.
FSS was given the task of investigating the greenback balances in accounts under the control of Tether. The date for balance confirmation was selected randomly and Tether was not provided any prior information. FSS was also given authorization to conduct unlimited examinations of the balances, while communicating with authorized representatives of various institutions and reviewing hundreds of pages of relevant documents. Even an in-person and telephone interview of top executives at Tether and its banks was conducted.
The law firm had access to Tether’s accounts for two weeks. As of June 1, 2018, the law firm found the total bank account balance to exceed the issued Tethers.
Tether’s two bank accounts had a total of $2,545,067,236.82
Tether in circulation (dollar value): $2,538,090,823.52
The report has clarified that “FSS is not an accounting firm and did not perform the above review and confirmations using Generally Accepted Accounting Principles.” It should be also remembered that the law firm did not conduct a complete audit and a cross verification was only carried out.
