Tether have received a great deal of scrutiny for their flagship USDT product across the last 6-8 months, with many speculators expressing their belief that the company didn’t hold equivalent U.S. dollar reserves to match all of the Tether tokens in circulation. As is all too often the case within the cryptocurrency community, disinformation leads to a huge amount of speculation which suggested that the issuance of Tether was somehow directly responsible for the run-up in cryptocurrency prices to all-time highs.
In spite of this ongoing speculation, Tether appear to be focussed on trying to ensure clear transparency in their offering, which tends to be a useful addition to the growing cryptocurrency market that traditional banks and custodians are still hard-pressed to serve effectively. There have been many demands that Tether simply complete a full audit to give investors reassurance in their product, however, this is no simple task for a unique and innovative operation like Tether, that operates in the nascent cryptocurrency markets.
There are no set rules for handling audits of such operations and the risk-averse large accounting firms don’t appear to be too keen to engage with companies handling cryptocurrencies at this stage. In 2017, the company had an ongoing engagement with Friedman LLP, which culminated in a memorandum which confirmed Tether’s bank balances at the time matched the current Tether tokens in circulation. Some commentators were concerned that this was not a full audit, but as stated to Coindesk at the time by a Tether spokesperson, this was deemed not to be feasible:[1][2]
“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
