Tether recently announced that they are using a reputable third-party audit but did not immediately name the auditing company. This has raised concerns that the company is still in crisis mode despite an October settlement with the Attorney General’s Office of the State of New York in which Tether paid $41 million.
The Commodities Futures Trading Commission (CFTC) in a statement about Tether prior to the fine had said that Tether’s claim that all its tokens are backed by assets are wildly misleading.
“This case highlights the expectation of honesty and transparency in the rapidly growing and developing digital assets marketplace,” said acting CFTC Chairman Rostin Behnam.
In a release after the settlement, Tether and Bitfinex maintained that they did no wrong, but had to agree to a settlement to enable the companies focus on their operations.
The settlement was the outcome of an investigation into the activities of Tether, some of which was an undisclosed loan of $850 million to Bitfinex when the exchange was struggling to access its funds with a payment processing company in 2018.
A statement from Tether concerning the matter stated:
“Over the past two and a half years, we worked in full cooperation with the Attorney General’s Office and provided more than 2.5 million pages of documentation to answer their questions and bring this matter to a close. “
Considering that the Attorney General’s Office considered the non-disclosure of events tantamount to violation of legal obligations on the part of Tether, the recent announcement that the company hired an independent auditor would have reflected the elusive transparency if they did not name the company auditing the company’s reports.
This is the view of some market watchers who insisted that the company may still be going through some crises behind the scenes despite the fact that its travails have not affected customer loyalty to the company’s products. In fact, during the course of the investigation, the market capitalization of tether tokens rose to $34 billion from $2 billion.
Tether lied and said they’re being audited by a reputable firm, yet refuses to say by who, and is also late on their quarterly report.
Tether is in crisis mode behind the scenes. They have limited time left before the dominoes start falling.
— Mr. Whale (@CryptoWhale) November 12, 2021
However, in a recent release, Tether announced that the company behind the audit is Moore Cayman, an independent accounting firm and a member of Moore Global, a network of accounting firms which is one of the top auditing companies in the world.
According to a release by Tether titled, “Assurance Opinion Confirms Tether’s Reserves Fully Backed; Company Shares as Part of Ongoing Transparency Commitment”, the company reiterated the findings of the auditing firm that Tether token are all backed by Tether reserves, contrary to insinuations that the company has been minting its tokens arbitrarily.
A statement from Tether stated:
“Tether has always been fully backed, and the assurance opinion we made available today confirms it once again. As Tether’s growth in the market continues to validate our business, we understand the public’s interest in this matter and are pleased to share this attestation as part of our ongoing commitment to transparency.”