The increasingly growing ‘stablecoin,’ Tether, is no stranger to controversies and it has recently surged up in its growing importance once again, after being investigated by FSS.
The digital token which is claimed by its founders to be backed by the physical US dollars at a sizeable one-to-one ratio recently courted people’s attention when it was discovered that Louis Freeh’s agency, Freeh, Sporkin & Sullivan (FSS) had been tasked with investing the cryptocurrency company’s assets.
The consensus towards Tether itself is not definite, as some commend its innovation thing while a reasonable amount of crypto traders are of the belief that the company is potentially the biggest risk to hit the virtual market.
Tether’s problem started about two months ago, in June when a paper from the University of Texas claimed that Bitcoin’s sudden price surge at the end of 2017 was partly due to the market manipulation of Tether on another token, Bitfinex.
The published academic report was soon taken by the new media with many sources speculating non-transparency in Tether dealings. This, perhaps, forced Tether to hire FSS, Louis Freeh’s firm to investigate and instill some credibility in the company’s operations.
After FSS’s investigation, the crypto company published a “transparency update” recently and it was reported:
“All Tethers in circulation are fully backed by USD reserves… Earlier this year Tether engaged Freeh, Sporkin & Sullivan LLP (FSS) to review bank account documentation and to perform a randomized inspection of the number of Tethers in circulation and the corresponding currency reserves.”
The transparency also confirmed that FSS, after being given complete access to bank accounts, and all statements, is confident that Tether’s unencumbered assets exceed the balance of fully-backed USD Tethers in circulation as of the 1st of June of this year.
Reservations Towards Tether’s Report
However, despite the positive publication and report, eyebrows are still being raised. That Judge Eugene Sullivan, FSS partner sits on one of Tether’s banks’ advisory board is not exactly a vote of confidence people would like to see.
This is not the only problem. Louis Freeh also insisted after, that the investigation was not an ‘official audit’ as his firm is not an accounting firm. Interestingly, big accounting firms such as Deloitte and KPMG has declined to audit cryptocurrency related companies. It is therefore little wonder that the Next Web has called it another phony audit.
Louis Freeh in response to the skepticism his investigation has met admitted it was part of the occupational hazards attached to it and has revealed he and his team would be working on more related cryptocurrency cases in the future.