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Well, right on tether.to they say, and I quote: > Our reserve holdings are published daily and subject to frequent professional audits. All tethers in circulat

by lagadu 8y ago

Well, right on tether.to they say, and I quote: > Our reserve holdings are published daily and subject to frequent professional audits. All tethers in circulation always match our reserves. They've been around for years and the grand total of independents audits is 0 (zero). Sure, assumptions don't make rumors true but them flat-out lying about audits and transparency speaks louder than anything else and we're not even getting into how it took the Panama papers leak for the public to find out that several of the people in charge of Tether and the people in charge of Bitfinex being the same.

carrja99 8y ago
Their cheerleaders usually reply claiming that they're under no obligation to publish audits and pretend that statement doesn't exist on the website, or is an old outdated webpage they forgot to remove.
anonymouz 8y ago
Even worse, they tried to get an audit, but it ended up with them and their auditor ending the process without producing an audit. Apparently they weren't too happy the auditor wanted to actually take a close look: “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.” - Tether spokesperson See https://medium.com/@bitfinexed/bitfinex-and-tether-is-unauditable-why-they-will-never-do-a-real-audit-3324e002b185 https://medium.com/@bitfinexed/bitfinex-and-tether-is-unaudi...
- spookthesunset 8y ago
  The fact that people still support tether after getting fired by their auditor and then releasing the statement you quoted astounds me. It is the most clear cut indicator that there is some super sketchy shit going on ever. People seem to be willing to believe whatever they want despise clear signs they are wrong. Especially when there is the possibility of getting lambo-rich with Bitcoin....
  - throwawaylolx 8y ago
    >It is the most clear cut indicator that there is some super sketchy shit going on ever. Yes, there is something that they're hiding, but there is no evidence that this has anything to do with their 1:1 USD reserve being a bogus. It's far more likely they are encountering regulation problems given the regulation uncertainty surrounding crypto. >People seem to be willing to believe whatever they want despise clear signs they are wrong. Or perhaps I'm not willing to commit to conspiracy theories based on baseless speculations.
- SilasX 8y ago
  So wait, am I reading this right? They want to say that their holdings are audited, but want an auditing process that stops at "yes, this bank account as a $X balance" and doesn't include anything about who actually owns the account or what its liabilities are? In fairness, I can kind of understand the bind: it seems that use-case of tethers depends on not being a legally enforceable claim to dollars, specifically so they can't legally be regulated as such (which would trigger reporting requirements, accreditation as a money transmitter, etc). But that's a double-edged sword: it also means that no (ethical) auditor will sign off on a statement saying they legally own the assets they claim to have.
  - ttul 8y ago
    For example... let’s say Bitfinex really does have $2.4B (or whatever) in the bank. But they have borrowed $2.3B using the cash as collateral. This is the sort of shenanigans that come out during an audit.
tomjakubowski 8y ago
> Sure, assumptions don't make rumors true but them flat-out lying about audits and transparency speaks louder than anything else and we're not even getting into how it took the Panama papers leak for the public to find out that several of the people in charge of Tether and the people in charge of Bitfinex being the same. An interesting fact is that all of the original RealCoin/Tether founders (Brock Pierce, Reeve Collins, Craig Sellars) are now associated with a pair of connected blockchain startups: BLOCKV[1] and vAtomic[2]. [1]: https://blockv.io/#team https://blockv.io/#team [2]: https://www.vatomic.io/ https://www.vatomic.io/ (this is, incidentally, another of vAtomic's founders, "accused of paying $2.5 million of bribes to two technology executives at the bank, so they would arrange $10.4 million of contracts to inflate his company’s revenue." https://www.reuters.com/article/us-servicemesh-cba-bribery/ex-u-s-software-chief-ex-australia-bank-exec-charged-in-bribery-scheme-idUSKCN1C302P https://www.reuters.com/article/us-servicemesh-cba-bribery/e...)
throwawaylolx 8y ago
>flat-out lying about audits Huh? They did do audits https://tether.to/announcement-transparency-update/ https://tether.to/announcement-transparency-update/ and they don't say they must be as public or as comprehensive as the community demands.
- lagadu 8y ago
  Erm, quoted from the exact announcement you linked (including the typo): > These consulting services do not constitute anaudit or attestation engagement They're saying themselves that they weren't audited.
  - throwawaylolx 8y ago
    Not quite--they're saying that the consulting services that Friedman offered on top of the audit procedure they were hired to do are not an audit. Friedman audited Tether, but it was not "a full audit" (https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved/ https://www.coindesk.com/tether-confirms-relationship-audito...) and, according to Tether, the reason for the that is as follows: >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."

by lagadu 8y ago

carrja99 8y ago

Their cheerleaders usually reply claiming that they're under no obligation to publish audits and pretend that statement doesn't exist on the website, or is an old outdated webpage they forgot to remove.

anonymouz 8y ago

Even worse, they tried to get an audit, but it ended up with them and their auditor ending the process without producing an audit. Apparently they weren't too happy the auditor wanted to actually take a close look: “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.” - Tether spokesperson See https://medium.com/@bitfinexed/bitfinex-and-tether-is-unauditable-why-they-will-never-do-a-real-audit-3324e002b185 https://medium.com/@bitfinexed/bitfinex-and-tether-is-unaudi...

spookthesunset 8y ago
The fact that people still support tether after getting fired by their auditor and then releasing the statement you quoted astounds me. It is the most clear cut indicator that there is some super sketchy shit going on ever. People seem to be willing to believe whatever they want despise clear signs they are wrong. Especially when there is the possibility of getting lambo-rich with Bitcoin....
- throwawaylolx 8y ago
  >It is the most clear cut indicator that there is some super sketchy shit going on ever. Yes, there is something that they're hiding, but there is no evidence that this has anything to do with their 1:1 USD reserve being a bogus. It's far more likely they are encountering regulation problems given the regulation uncertainty surrounding crypto. >People seem to be willing to believe whatever they want despise clear signs they are wrong. Or perhaps I'm not willing to commit to conspiracy theories based on baseless speculations.
SilasX 8y ago
So wait, am I reading this right? They want to say that their holdings are audited, but want an auditing process that stops at "yes, this bank account as a $X balance" and doesn't include anything about who actually owns the account or what its liabilities are? In fairness, I can kind of understand the bind: it seems that use-case of tethers depends on not being a legally enforceable claim to dollars, specifically so they can't legally be regulated as such (which would trigger reporting requirements, accreditation as a money transmitter, etc). But that's a double-edged sword: it also means that no (ethical) auditor will sign off on a statement saying they legally own the assets they claim to have.
- ttul 8y ago
  For example... let’s say Bitfinex really does have $2.4B (or whatever) in the bank. But they have borrowed $2.3B using the cash as collateral. This is the sort of shenanigans that come out during an audit.

tomjakubowski 8y ago

> Sure, assumptions don't make rumors true but them flat-out lying about audits and transparency speaks louder than anything else and we're not even getting into how it took the Panama papers leak for the public to find out that several of the people in charge of Tether and the people in charge of Bitfinex being the same. An interesting fact is that all of the original RealCoin/Tether founders (Brock Pierce, Reeve Collins, Craig Sellars) are now associated with a pair of connected blockchain startups: BLOCKV[1] and vAtomic[2]. [1]: https://blockv.io/#team https://blockv.io/#team [2]: https://www.vatomic.io/ https://www.vatomic.io/ (this is, incidentally, another of vAtomic's founders, "accused of paying $2.5 million of bribes to two technology executives at the bank, so they would arrange $10.4 million of contracts to inflate his company’s revenue." https://www.reuters.com/article/us-servicemesh-cba-bribery/ex-u-s-software-chief-ex-australia-bank-exec-charged-in-bribery-scheme-idUSKCN1C302P https://www.reuters.com/article/us-servicemesh-cba-bribery/e...)

throwawaylolx 8y ago

>flat-out lying about audits Huh? They did do audits https://tether.to/announcement-transparency-update/ https://tether.to/announcement-transparency-update/ and they don't say they must be as public or as comprehensive as the community demands.

lagadu 8y ago
Erm, quoted from the exact announcement you linked (including the typo): > These consulting services do not constitute anaudit or attestation engagement They're saying themselves that they weren't audited.
- throwawaylolx 8y ago
  Not quite--they're saying that the consulting services that Friedman offered on top of the audit procedure they were hired to do are not an audit. Friedman audited Tether, but it was not "a full audit" (https://www.coindesk.com/tether-confirms-relationship-auditor-dissolved/ https://www.coindesk.com/tether-confirms-relationship-audito...) and, according to Tether, the reason for the that is as follows: >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."