Personally, I’ve worked with one of the largest legal marketing companies (LexisNexis) and the Tether response sounds like marketing spin by their PR team. Friedman LLP is one of the top 100 accounting firms in the United States. Their processes are followed to the letter because that’s their job. Any successful law firm or accounting firm will have strict processes and policies to follow. That is how they succeed and ensure that when they get audited (yes, audit firms get audited as well), they can make sure their I’s are dotted and T’s are crossed.
Here’s Tether’s response to why the relationship was dissolved:
“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.”
I’d like to break this down a bit as both a legal marketing professional and as someone who is currently in digital marketing.
First…the use of the phrase “excruciatingly detailed procedures”
As I mentioned above, they don’t have detailed procedures because they want to make your life miserable, they have it ensure that their findings and audit are as accurate & correct as possible. The processes they have in place ensure they always deliver a high quality product (correctly assessed audit of their client) and to protect themselves in case of an audit on them. The fact that Tether used the word “excruciatingly” to describe the procedure is an attempt to make you feel that what Friedman LLP was doing was overbearing.
From a company currently under subpoena from the U.S. Commodity Futures Trading Commission (source: Bloomberg), it feels like they are on the defensive and have responded accordingly. The way I see it, is that Tether was uncomfortable with the extreme detail that Friedman LLP’s processes involved and as a result, had to dissolve the relationship. I would not be surprised if the negotiation to opt out of their contract with Friedman LLP forbids Friedman LLP from discussing any irregularities they discovered while under contract.
Next…“simple balance sheet”
I can guarantee to you that no balance sheet in the world for a financial institution, especially one that is claiming that it’s newly created currency is backed by a 1:1 ratio of coin to USD, is simple.
If you think that Tether’s balance sheet that was being audited looks like above, and is the ONLY thing that Friedman LLP was looking at, please educate yourself further. A company claiming to hold enough cash reserves to ensure a 1:1 trade for coin to USD will have to produce more paperwork than a simple assets & liabilities chart to pass a legitimate accounting audit.
As with any reputable audit firm, Friendman LLP would not just verify if the company’s financial statements are true, but they also examine the company’s internal controls to ensure that processes & measures are in place to reduce or eliminate accounting errors or fraud.
Also…”unattainable in a reasonable time frame”
Tether – what is a reasonable time frame? It’s been months and if you truly have $2.3 billion dollars in reserve, your company should have been able to pay for Friedman LLP to audit your company within a “reasonable” time. You could pay an audit firm for a small team, or a large team. Given that Tether claims they have more than $2B in reserves, this is just an excuse to redirect your attention from the overall PR spun statement and makes it seem that Friedman LLP was dragging their feet (they wouldn’t be a top audit firm if that was the case).
Finally, executives of Tether have no digital footprint
CEO J. L. van der Velde’s LinkedIn looks awfully like a fake LinkedIn profile like the one we covered in our AstorGame Scam article. 119 connections, with a blurry picture, and his name is not connected with any of the companies listed in his profile seems like this is the making of the largest scam in crypo history.
Here’s his LinkedIn profile: https://www.linkedin.com/in/j-l-van-der-velde-26a24b6/
Want to read more? We found an article looking into his social connections but have come up short in discovering who he really is: EthNews – Who is the CEO of Tether?
Oh – and try to find the other “executives” of Tether digitally…let us know how that goes!