
Tether releases law firm report attesting to $2.55 billion USD reserves - neom
https://uk.reuters.com/article/us-cryptocurrencies-tether/cryptocurrency-firm-tether-releases-law-firm-report-attesting-to-u-s-dollar-reserves-idUKKBN1JG1SB
======
ledriveby
This only raises more questions.

The law firm is seriously sketchy.
[https://www.reddit.com/r/Buttcoin/comments/8slnho/freeh_spor...](https://www.reddit.com/r/Buttcoin/comments/8slnho/freeh_sporkin_sullivan_llp_authors_of_the_report/)

And... they didn't actually verify anything. Look at these disclaimers!
[https://twitter.com/Bitfinexed/status/1009433789456666627](https://twitter.com/Bitfinexed/status/1009433789456666627)

~~~
SilasX
Heh, so it's like they had to search far and wide to find someone shady enough
to sign off on them having the money, and even then the form would only do so
after adding disclaimers that amount to, "we didn't do a real audit, we
assumed that the employees were providing valid information, we haven't
checked compliance with any law".

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philiphodgen
This is so interesting to me. A curiosity.

Usually, when you want your financials vetted you go to an accounting firm. I
find it curious that they chose a law firm — with some PR-value name like
Louis Freeh attached to it. Celebrity endorsement?

Why not get a proper audit by Ernst & Young, Deloitte or PwC?

We don’t see mutual fund financials vetted by law firms. Tether is a type of
money-market fund.

It doesn’t add up. People behaving strangely . . . .

~~~
zik
It is weird. And really this report comes down to them getting a couple of
signed letters from third parties. Why do it this way rather than a normal
audit?

~~~
sanxiyn
A positive interpretation is that Tether is solvent and wants to prove
solvency but does not want to deal with non-solvency related audit issues.
That's assuming some goodwill... If you don't assume goodwill, what you should
conclude from this is anyone's guess.

~~~
TAForObvReasons
Designed to distract and deflect. Goodwill on financial solvency matters was
completely destroyed after they suspiciously "dissolved" their relationship
with audit firm:

[https://www.coindesk.com/tether-confirms-relationship-
audito...](https://www.coindesk.com/tether-confirms-relationship-auditor-
dissolved/)

This is somewhat reminiscent of Michael Cohen's "proof" that "[he has] never
been to Prague in [his] life." (in his case, a picture of a cover of a US
passport). It is not actually proof of anything useful, but does manage to
help control the narrative in a specific way

[https://twitter.com/MichaelCohen212/status/81899127768556748...](https://twitter.com/MichaelCohen212/status/818991277685567489)

~~~
sanxiyn
Friedman LLP fiasco is consistent with my positive interpretation.

------
jsmeaton
Tether releases law firm report confirming existence of a declaration from
unnamed bank that attests to 2.5 billion USD in reserves. Oh, and members of
said law firm are on the advisory board of said unnamed bank.

> Eugene Sullivan, a former federal judge and FSS cofounder, is an advisory
> board member of one of Tether’s banks, the report said.

So the unnamed bank sent documents confirming deposits. The law firm confirmed
receipt of those documents.

So - the exchange (bitfinex) and tether are in cahoots. The law firm and at
least one of the banks are in cahoots. It's just so __strange __that no
legitimate proof of accounting has been provided, and that people are still
putting their trust into tether.

One of these things is correct:

    
    
      1. Tether and all claims made are legitimate.  
    
      2. Tether don't actually have the money, but are trying desperately to make it all up before any kind of audit is begun. This is currently fraud but hoping not to be fraud in the future.  
    
      3. Fraud.
    

If 1. is true, then you would have to imagine some kind of proof would have
been provided by now.

~~~
windows_tips
Why does Tether need the money? The tokens aren't redeemable for USD, are
they?

~~~
talltimtom
I think legally they are in the clear, but if what I suspect is true and they
gambled the backing money on the crypto markets and now have less than the
amount of tether circulating, a discovery of that fact will likely instantly
evaporate any liquid assets they have, and they are likely trying like hell to
get into the green so they can do an audit and start pulling in more money.
Assuming I’m right, it’s kind of like if you somehow managed to loan a couple
of billion dollars and then lost 10%, you still have billions of liquid funds
available to you, so what do you do? Declare bankruptcy or start putting
chunks of it on black hoping to score a potential million dollar surplus for
yourself before you close the loan?

~~~
jsmeaton
That’s called fraud.

------
shiado
It took the Paradise papers to show that Bitfinex and Tether were connected
and it will likely take a lawsuit to show how their banking is too. My guess
is they proved their reserves by borrowing from their customers for a short
period of time.

------
steve19
Couldnt they simply borrow $2.55 billion for a day, put it in a bank account,
show lawyer, then transfer it out? Such as borrow from the company founders
who have made a fortune selling tether?

~~~
bmelton
I dunno who gets a loan for $2.55 billion without showing sizable assets...
somewhere, but the fact that the money is in separate accounts reminds me of a
story.

There was a car-maker (I wish I could remember who -- I want to say Audi, but
that feels wrong) who was trying to get their car entered into a race. The
requirements for the race was that the car had to be a production car, and of
course there's wasn't, so they made _just_ enough (I think it was 50) to get
classified as production.

Well, they didn't meet the production quota, and when the inspectors came by
to check, they showed them the 30 or so cars they had made, but told them the
other cars were at a different lot. "Let's go there now, only maybe we'll stop
off for lunch on the way," while every employee they had was tasked with
moving one of the 30 cars to the second lot so that when the inspectors
arrivd, the first 30 + the second 30 was definitely greater than 60.

Edit: If anyone remembers the story better, I'd love a refresher on it. I
can't remember where I heard it from, but it was probably either a Netflix
documentary or The Grand Tour on Amazon.

~~~
thereisnospork
Its Lancia you are thinking of:

[https://www.facebook.com/thegrandtour/videos/732926230239254...](https://www.facebook.com/thegrandtour/videos/732926230239254/)

~~~
Theodores
[https://historicdb.fia.com/sites/default/files/car_attachmen...](https://historicdb.fia.com/sites/default/files/car_attachment/1486729201/homologation_form_number_276_group_b.pdf)

There is the paperwork for you from the FIA database. If you like your cars
then you could be there for a while.

[https://historicdb.fia.com/](https://historicdb.fia.com/)

------
ucaetano
> Eugene Sullivan, a former federal judge and FSS cofounder, is an advisory
> board member of one of Tether’s banks, the report said.

Wow, how can anyone believe in this? Massive conflict of interest there.

------
asasidh
No accounting firm was ready to vouch for them ? This sounds like Theranos all
over again

------
thisisit
Discussed earlier today:

[https://news.ycombinator.com/item?id=17355171](https://news.ycombinator.com/item?id=17355171)

------
Rjevski
Just wondering, if you've got 2,55 billion laying around, would you use it to
solve a real-world problem or invest it, or will you burn it in some sketchy,
potentially-illegal cryptocurrency bullshit with no real-world purpose?

------
phobosdeimos
I would be more concerned if they really DID have 2.5 billion of reserves.
What would be the source of that money, drug cartels?

I'd love to find out who is propping up Tether!

