Tether Ltd., which issues a stable coin allegedly tied to U.S. dollar reserves, claims it has hired Freeh Sporkin & Sullivan LLP — a law firm co-founded by FBI Director Louis Freeh — to confirm its bank deposits and assure investors that its cryptocurrency is backed by USD. While the law firm did not perform an official audit, it did have access to Tether’s bank accounts and has released data regarding how much money the company holds.
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According to Tether CEO Jan Ludovicus van der Velde, the amount confirmed by Freeh Sporkin & Sullivan is equal to the $2.54 billion in coins Tether claims to have in circulation. This reportedly confirms that all Tethers were sufficiently backed by USD as of June 1, 2018.
Van der Velde said[2], “We’re glad to have independent verification of this to answer some of the questions posed by the public. We are by no means done with our efforts to promote increased transparency at Tether. We are planning to build on this report moving forward and, despite the challenges of applying current accounting and assurance standards to cryptocurrency clients, we continue to discuss these issues with potential audit partners.”
A full audit cannot be obtained, according to Tether’s general counsel Stuart Hoegner. He states that the cryptocurrency market looks “too nascent for large accounting firms to consider taking on clients who offer digital coins” and that “the big four firms are anathema to that level of risk. We’ve gone for what we think is the next best thing.”
Tether has been the subject of mass controversy over the last week after a 66-page document[3] was issued by University of Texas finance professor John Griffin. It alleges bitcoin’s spike to $20,000 in December 2017
