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Skepticism on Tether increases- news on termination of Friedman Audit surfaces

Jan 30, 2018 Posted /  2268 Views

Skepticism on Tether increases- news on termination of Friedman Audit surfaces

On Saturday night, media started flooding with the news that Tether and its auditor Friedman LLP had dissolved their relationship, however, there was no official confirmation and all calls to the auditor went on a voicemail. Reports surfaced Saturday night that Tether and their auditor, Friedman LLP, had dissolved their relationship. Due to the weekend, independent confirmation has not been received. Calls to Friedman LLP have gone to voicemail.

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Friedman had been working on an audit of Tether, which has appropriated relationship with the cryptocurrency exchange Bitfinex. There are many critics of the two companies, and most well-known is the blogger with the handle Bitfinex’d, who have insisted that Tether had been printing tokens out of thin air to drive up the price of bitcoin on the exchange.

It is unusual for both Tether and it auditor to take such an action without a formal statement, specifically since this would create a further shutter in the market. Time and again the crypto community has raised its doubts, which means if Tether truly sustains sufficient resources to purchase all the outstanding tether tokens. The company had hired Friedman LLP to administer an audit in an endeavour to fix these doubts and community’s concern.

Tether spokesperson wrote an email to CoinDesk and the statement read:

“We confirm that the relationship with Friedman is dissolved.  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.”

The company remains “committed to the process,” the Tether spokesperson added.

It can be seen that the cryptocurrency market has its reservations maintained as the price of the token fell overnight, seems to less than a dollar. BTC is about $400 lower on GDAX/Coinbase than Bitfinex at least for now, as GDAX ventures in actual dollars and Bitfinex in tokens that the market quite does not believe. This is why traders are selling their not- USD on Bitfinex and buying BTC, which they can take elsewhere to sell for USD. This increases the “price” on Bitfinex and decreases it on the other exchange.

The company have many similar owners as with Bitfinex, a major cryptocurrency exchange, and it was owing to scepticism in the market that the company had to issue the following statement last year:

“Friedman LLP has been engaged to perform historical balance sheet audit procedures for Tether Limited. However, as the amount of Tethers in circulation has increased substantially in recent months, we have also asked Friedman to analyze our bank balances and our issued and outstanding token balance on an interim basis. Friedman agreed to perform consulting services for us in an effort to provide management with useful information concerning Tether’s cash position and Tether tokens issued and outstanding as of an interim date. Friedman was able to provide consulting services for us on an expedited basis, using a procedures date of September 15, 2017. These consulting services do not constitute an audit or attestation engagement, which would include a significantly expanded scope of procedures and take substantially more time to complete.”

Any “dissolution” of the relationship between Tether and Friedman LLP would be a summon for exceptional misgiving in the community, as this would appear to operate antagonistically to Tether’s appetite for greater clarity.

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