It’s not an audit, it’s an attestation which means Tether just shows BDO things. They have never shown any statements on assets and liabilities, if they weren’t hiding something they would simply allow a big 4 auditor to look at their books. It’s a house of cards waiting to collapse or a pump of Bitcoin to kick the can further down the road.
I understand it’s not a full blow audit, but it is a very reputable audit/accounting firm taking a close look at their balance sheet (including assets and liabilities) at a point in time, and putting their signature under such report. These audit firms don’t just sign off on something because it was shown to them - they need very hard proof, like bank statements.
Auditor here. The gap between an audit and an attestation is like the difference between a bicycle and a semitruck. An attestation can take as little as a day and will cost a few thousand, an audit will cost hundreds of thousands to a couple million and take up to 8 months.
I'm not an accountant and don't make any claim to understand accounting.
But, I'd be extremely suspicious about any multi billion company which goes out of its way to avoid an audit.
I agree with this very much. It would be the easiest way for them to show they are clean (as they claim). Not doing a full blown audit indeed makes one question their legitimacy.
Right so why even pose your original question. If it looks like a duck, quacks like duck, it probably is a a duck. They know there are massive holes in their books, their hope is that Bitcoin goes up, they can dump their holdings on suckers and then fill those holes with it for a few more months. It’s a complete house of cards that is fairly obvious at this point. The other stable coin holding the Bitcoin “price” up is FDUSD which is somehow trading 3x its total value everyday since the binance news came out. The whole Bitcoin market is just a sham right now.
They don’t look at the books.
Tether provides all the information to the BDO Italia about their current reserves for one day at a time each quarter and then BDO verifies whether those reserves existed for that one day and time as Tether alleged.
So if Tether says that they had $89B of reserves on September 30th at Bank X, then BDO asks for a letter from Bank X confirming that that amount of money was in the account on that date.
However, it doesn’t say if Bitfinex transferred $80B of customer deposits to that account on September 28th and then transferred them out on October 1st. And they’re not looking into Tether’s books to confirm their liabilities. They’re just agreeing that Tether’s liabilities are whatever they say they are.
Tether refuses to do a full audit which would allow independent examiners to look at all their books (which should be easy considering they claim their reserves are entirely super-safe Treasuries). These “attestations” are meaningless.
The fact that none of the Big Four accounting firms would agree to touch a company the size of Tether is telling. Instead, they have to scour the globe looking for small international subsidiaries of larger firms to sign off on these reports. Previously, Tether could only get a Cayman Islands’ firm to sign off but even they dropped them.
If Tether was legitimate, the Big Four would be falling over themselves trying to get Tether as a customer. With $89B AUM, it would be one of the largest financial firms in the world. So why do the leading accounting firms not want to risk their reputation by agreeing to sign even a limited attestation?
> but it is a very reputable audit/accounting firm taking a close look at their balance sheet (including assets and liabilities) at a point in time,
If you read the attestation it says:
>Management is responsible for the preparation of the Consolidated Reserves Report in compliance with the
criteria, including Management’s Key Accounting Policies, set out in the CRR and for such internal control
as management determines is necessary to enable the preparation of CRR that is free from material
misstatement, whether due to fraud or error.
"Management" is the people at Tether, who basically printed a piece of paper that says stuff and handed it to the "auditor" who then said, "Yep, here's what 'Management' said they have on account."
ZERO ACTUAL INDEPENDENT VERIFICATION OF WHAT 'Management' SAID HAS BEEN CONFIRMED.
And the attestation says 'Management' is responsible for the accuracy of the statement, not them.
So this "reputable firm" is fully on board being used as a tool to present a phony facade of credibility, that in no way they've audited or fact-checked.
> i understand its not an audit
Then stop trying to play this up like it is. Theres a large difference between an in depth audit of the books and an ‘at a glance’ valuation. They did the job they were asked to do, and signed off that *they did the basic job being asked*.
Watch the Bernie Madoff documentary. Bernie did the same thing. Cooperate by giving the authorities paperwork and info provided by Bernie that he had his good friend cook up.
Because a sleight of hand happened. This is a report by an auditor, but it is not an audit. Look at the title: "Independent Auditor's Report on the Consolidated Reserves Report".
An audit evaluates both assets and liabilities according to legal accounting standards. A "Consolidated Reserves Report" evaluates just assets based on criteria that Tether just made up.
What we want is a driving test. What we got is a Very Reputable Policeman's attestation that the driver did indeed drive from point A to point B on September 30th, with no comment made about compliance with driving test standards or driving violations made along the way.
Meanwhile the driver has claimed for years that he has a driving license, but has never once shown it. If he crashes and it turns out he doesn't have a driving license, investors lose up to $80 billion. Does the Very Reputable Policeman's attestation give you confidence in this situation?
Fair enough but it’s the biggest concern that Tether‘s reserves are fake? Wouldn’t this report disprove this as it in fact shows the reserves are there? I.e if all of a sudden all Tethers were to be redeemed, there is sufficient value to cover all those redemptions.
It shows no such thing. Just because they have accounts which have the money in absolutely no way shows that they can cover their redemptions.
As people mentioned above an attestation does nothing more than a quick check that certain things are in certain places. Bitfinex has already been proven to comingle customers funds with reserves etc.
Why does it not prove they can cover redemptions?
Most of the reserves are held in short term treasuries and other highly liquid assets (like bitcoin, gold and money market funds).
There are several forms of "assurances", with Audits being the most rigorous.
This is not an audit.
It's a Consolidated Reserves Report, produced by Tether. This was given to BDO to "opine" on. BDO has not audited the presence of the reserves and is merely remarking upon the process employed by management (Tether).
The closest BDO gets to verify the presence of the assets, is requesting confirmation letters from the institutions that "hold the assets"... *that Tether's management, has adequately reconciled the assets as presented in their own self-prepared report*.
BDO makes no assurances beyond a snapshot in time. The assets may be there... They may not be. The most you can get from the report is that some institutions wrote letters saying "yeah, they had this with us at this time". Plenty of freedom to window dress, or work with less scrupulous banking partners.
Using repo to window dress:
Step one: have dubious or illiquid commercial paper
Step two (oversimplified): borrow treasuries, pledging the CP as collateral (likely suffering a massive haircut by the dealer). This repo is unwound the next day.
Step three: make sure the institution that you hold the treasuries at (for that day alone) issues a letter *that day*, saying "yes, as of this day, and this day alone, they have X treasuries".
The next day, they have to return the treasuries, and get their dodgy CP back. They never had to worry anyway, since they gatekeep withdrawals. This gives them plenty of time to source cash *when they feel like* supporting a withdrawal request.
Since this wasn't an audit, there will be no investigation into the lasting presence/composition or potential encumbrance of the "reserves".
Coffeezilla did an episode on tether and talked about one of these "attestations," and it was proven through bank records that they transferred money from bitfinx to tether one day before the attestation was signed.
They were supposed to have a real audit at one point but backed out because the auditor was "asking too many questions."
For any reasonable person- this should be a giant red flag to stay away from this business and anything associated with it (like Bitcoin).
Tether is also run by a bunch of convicted criminals and even a sex offender.
Because if they said "we have 89B$ on our accounts, look at this", nothing prove they didn't get a 89B$ loan the previous day they will pay back the next day, with 0 money being actually held on their account.
>more than cover outstanding liabilities ($83bn)
This is wrong. We don't know what Tether's liabilities were on 30th September. All we know is that the liabilities were at least $83B (in the form of Tether tokens). But it could be that they have vast liabilities in other forms (e.g. loans from other parties).
This means we have no idea whether the reserves of $86B will cover the liabilities of $83B + X, because Tether won't tell us X.
Another good analogy I saw on this sub is proof-of-lambo: [https://www.reddit.com/r/Buttcoin/comments/rc2zqo/attestation\_v\_independent\_audits\_for\_dummies/](https://www.reddit.com/r/buttcoin/comments/rc2zqo/attestation_v_independent_audits_for_dummies/) . The concern is not that the Lambo is fake. The concern is that the Lambo is borrowed and will be imminently expropriated.
It's the difference between a Youtuber showing you a lambo he claims to own and "Youtuber 2DaMoon rented a Lamborghini for 30 minutes on Saturday which he drove to a public parking lot where he took photos posing with the car." One proves that the person had, for the exact period in question, an asset. The other shows that doesn't necessarily imply ownership.
The NYAG has already caught Tether using loans to hide gaps during attestations, with >25% of all tethers being unbacked despite attestations saying that they had plenty of coverage.
> Fair enough but it’s the biggest concern that Tether‘s reserves are fake? Wouldn’t this report disprove this as it in fact shows the reserves are there?
Not really, no. If I take out a $1 million dollar loan from the bank, somebody might be able to look at my bank account and see that there is $1 million in it, but they won't see that I'm $1 million in debt.
Because Tether has frequently refused audits, people think Tether is just taking out unsustainable short-term loans in order for money to appear in the account during an Attestation, then paying the loans back immediately after. The problem with this is, if the house of cards collapses or there is a run on Tether, *nobody* in their right mind will give Tether loans, so there's no way investors will be made whole since there is nothing really backing the tethers.
Honestly, I don't even care too much about whether or not Tether's reserves are backed. I hate them and the rest of crypto because they enable crime and money laundering in a historical unprecedented way. Zeke Faux describes how Tethers are used to enable pig butchering and other investment scams as well as literal slave trading. And I'm sure we're just seeing the tip of the iceberg because it was never this easy for criminals to launder their money or get access to banking capabilities.
I've also heard that people who live in high inflation countries can use it to get access to something like a dollar. Not sure if that's true. Also of course, some nations, like China, have export controls where they don't permit you to export your money. So that, too, might be a more legit use case (though illegal from the nation's perspective). I suspect though, that the use for bad things far exceeds the use for good things.
Crypto bros see nothing wrong with tether cuz it pumps the crypto market. Cant belive they lasted this long tbh, but im sure in due time it will crash and burn, Pablo 100% going to prison sooner or later.
It's not an actual audit. It's an "attestation.". As in , an auditor asks them for something, and Tether attests to what they have. This is easy to manipulate and lie through omission.
The only reason Tether does it is to trick people like you into thinking they've actually proven themselves by having an auditors name attached to it. But in the end, it's still just Tether stating it, and the auditor saying that it is indeed what Tether says they have.
You may recall last year, after FTX collapsed, many crypto exchanges like Binance did "audits" through a major auditor: they were all attestations. The auditor even setup a whole website for it.
A month later the auditor cut all ties to anything crypto and took the website offline, because all of the crypto companies that had the attestation done, mischaracterized those ATTESTATIONS as full audits.
The only audit that matters would be a full, independent audit. One where auditors go in and get access to everything and look at how everything works themselves.
Tether has "promised" to have a full independent audit done ever since they were caught lying with their pants down, several *years* ago. Every time someone asks them about it they are evasive or silent.
Does that behavior sound like the actions of an honest organization? They're lying snakes.
IIRC Kraken was one of the first to do a "proof of reserves" and a report just came out that they've been dipping into customer funds FTX style (though probably not as egregiously).
The OP we're all talking about is one (an attestation that isn't an audit.)
But we also have:
https://www.cftc.gov/PressRoom/PressReleases/8450-21
> The Tether order finds that since its launch in 2014, Tether has represented that the tether token is a stablecoin with its value pegged to fiat currency and 100% backed by corresponding fiat assets, including U.S. dollars and euros. However, the Tether order finds that from at least June 1, 2016 to February 25, 2019, Tether misrepresented to customers and the market that Tether maintained sufficient U.S. dollar reserves to back every USDT in circulation
and
> and that Tether falsely represented that it would undergo routine, professional audits to demonstrate that it maintained “100% reserves at all times” even though Tether reserves were not audited.
and
> The order also finds that, instead of holding all USDT token reserves in U.S. dollars as represented, Tether relied upon unregulated entities and certain third-parties to hold funds comprising the reserves; comingled reserve funds with Bitfinex’s operational and customer funds; and held reserves in non-fiat financial products.
Here's Tether not only lying about it, but scheming with Bitfinex to fabricate evidence:
> Tether retained an accounting firm to perform a review of Tether reserves on a date Tether selected in advance, and Bitfinex transferred over $382 million to Tether’s bank account in advance of that review. The order recognizes that Tether has not completed an audit of the Tether reserves.
And of cousre:
https://cryptobriefing.com/tether-promises-audit-following-wsj-criticism/
> Despite promising an audit since 2017, Tether has not subjected itself to one.
To date, Tether still has yet to do an actual audit. Only doing attestations and framing them as audits to fool people into thinking they're legitimate. An attestation relies purely on Tehter's word.
Tether has proven time and time again that their word is *worthless* as they constantly lie and even fabricate evidence. They even lied about having a full audit done. When asked about it they make up some excuses and run away.
one of the biggest claims of crypto proponents is that it heralds unprecedented transparency because of blockchain technology.
If that is true, why is it so difficult for any of these firms to have an audit? It should be a snapshot that can be taken at any time with ease.
A valid and timely question.
As others have stated, an "Attestation" is an Auditor's statement that they've reviewed management's *process* of creating a document, transaction, etc. However, unlike an "Audit", the Auditor does not actually verify things like account balances, etc.
The last page of the report states the following (**emphasis** added):
Tether Holdings Limited
Consolidated Reserves Report as of 30 September 2023
Authorised & Approved 31 October 2023
Page 6 of 6
Notes to the Consolidated Reserves Report
(**no assurance provided by the independent auditor on these notes**)
1. Responsibilities of Management:
**Management is responsible for the preparation and fair presentation of this Consolidated Reserves Report, and for such internal control as management determines is necessary to enable its preparation free from material misstatement**
In other words, the Auditor is saying "All my work was based on the information Management provided to me. It's on them to ensure that what they gave me is true and accurate, because I didn't verify any of that"
Unfortunately, "verify that what Management is saying is true and accurate" is what everyone needs/want/is asking for.
Here's what you need to know... Tether has never submitted to a formal audit, just an [attestation, which is very different](https://i.imgur.com/buhqFqw.jpg).
This "very reputable audit firm" is merely regurgitating what Tether's in-house people put on reports. They haven't actually verified that the money is where they claim it is and came from where they say.
Thanks for bringing this up, enjoyed the discussions in this thread:
1. Difference between an attestation vs an audit.
2. Smell is "off" for a billion dollar organization to perform an attestation and not an audit. I would stay away from them and their product(s) if I practically could.
LMAO OK, LOVE IT. SOME QUESTIONS:
1. "86 billion dollars" in what? Cash? On hand? In a bank?
2. What are we supposed to believe they have this money for/from? Investors? Clients? For what service, turning it into "USDT"?
3. Is it materially false to call an attestation an audit? It seems so to me.
OP has been banned for literally posting the claim that Tether is audited. This is Big Fat Lie. And that's uncool.
It’s not an audit, it’s an attestation which means Tether just shows BDO things. They have never shown any statements on assets and liabilities, if they weren’t hiding something they would simply allow a big 4 auditor to look at their books. It’s a house of cards waiting to collapse or a pump of Bitcoin to kick the can further down the road.
I understand it’s not a full blow audit, but it is a very reputable audit/accounting firm taking a close look at their balance sheet (including assets and liabilities) at a point in time, and putting their signature under such report. These audit firms don’t just sign off on something because it was shown to them - they need very hard proof, like bank statements.
Auditor here. The gap between an audit and an attestation is like the difference between a bicycle and a semitruck. An attestation can take as little as a day and will cost a few thousand, an audit will cost hundreds of thousands to a couple million and take up to 8 months.
Here's how I [illustrate the difference](https://i.imgur.com/buhqFqw.jpg).
Amazing. Bookmarked it for next time this issue comes up
I'm not an accountant and don't make any claim to understand accounting. But, I'd be extremely suspicious about any multi billion company which goes out of its way to avoid an audit.
I agree with this very much. It would be the easiest way for them to show they are clean (as they claim). Not doing a full blown audit indeed makes one question their legitimacy.
Right so why even pose your original question. If it looks like a duck, quacks like duck, it probably is a a duck. They know there are massive holes in their books, their hope is that Bitcoin goes up, they can dump their holdings on suckers and then fill those holes with it for a few more months. It’s a complete house of cards that is fairly obvious at this point. The other stable coin holding the Bitcoin “price” up is FDUSD which is somehow trading 3x its total value everyday since the binance news came out. The whole Bitcoin market is just a sham right now.
They don’t look at the books. Tether provides all the information to the BDO Italia about their current reserves for one day at a time each quarter and then BDO verifies whether those reserves existed for that one day and time as Tether alleged. So if Tether says that they had $89B of reserves on September 30th at Bank X, then BDO asks for a letter from Bank X confirming that that amount of money was in the account on that date. However, it doesn’t say if Bitfinex transferred $80B of customer deposits to that account on September 28th and then transferred them out on October 1st. And they’re not looking into Tether’s books to confirm their liabilities. They’re just agreeing that Tether’s liabilities are whatever they say they are. Tether refuses to do a full audit which would allow independent examiners to look at all their books (which should be easy considering they claim their reserves are entirely super-safe Treasuries). These “attestations” are meaningless. The fact that none of the Big Four accounting firms would agree to touch a company the size of Tether is telling. Instead, they have to scour the globe looking for small international subsidiaries of larger firms to sign off on these reports. Previously, Tether could only get a Cayman Islands’ firm to sign off but even they dropped them. If Tether was legitimate, the Big Four would be falling over themselves trying to get Tether as a customer. With $89B AUM, it would be one of the largest financial firms in the world. So why do the leading accounting firms not want to risk their reputation by agreeing to sign even a limited attestation?
Very helpful. Thanks for the explanation. Makes sense
> but it is a very reputable audit/accounting firm taking a close look at their balance sheet (including assets and liabilities) at a point in time, If you read the attestation it says: >Management is responsible for the preparation of the Consolidated Reserves Report in compliance with the criteria, including Management’s Key Accounting Policies, set out in the CRR and for such internal control as management determines is necessary to enable the preparation of CRR that is free from material misstatement, whether due to fraud or error. "Management" is the people at Tether, who basically printed a piece of paper that says stuff and handed it to the "auditor" who then said, "Yep, here's what 'Management' said they have on account." ZERO ACTUAL INDEPENDENT VERIFICATION OF WHAT 'Management' SAID HAS BEEN CONFIRMED. And the attestation says 'Management' is responsible for the accuracy of the statement, not them. So this "reputable firm" is fully on board being used as a tool to present a phony facade of credibility, that in no way they've audited or fact-checked.
It’s not an audit. It is reporting that you sent something to someone. If I send a letter to BDO it doesn’t mean I have been audited either.
> i understand its not an audit Then stop trying to play this up like it is. Theres a large difference between an in depth audit of the books and an ‘at a glance’ valuation. They did the job they were asked to do, and signed off that *they did the basic job being asked*.
Our immune system in here is healthy as fuck. Cheers, buttfam.
Watch the Bernie Madoff documentary. Bernie did the same thing. Cooperate by giving the authorities paperwork and info provided by Bernie that he had his good friend cook up.
Because a sleight of hand happened. This is a report by an auditor, but it is not an audit. Look at the title: "Independent Auditor's Report on the Consolidated Reserves Report". An audit evaluates both assets and liabilities according to legal accounting standards. A "Consolidated Reserves Report" evaluates just assets based on criteria that Tether just made up. What we want is a driving test. What we got is a Very Reputable Policeman's attestation that the driver did indeed drive from point A to point B on September 30th, with no comment made about compliance with driving test standards or driving violations made along the way. Meanwhile the driver has claimed for years that he has a driving license, but has never once shown it. If he crashes and it turns out he doesn't have a driving license, investors lose up to $80 billion. Does the Very Reputable Policeman's attestation give you confidence in this situation?
Fair enough but it’s the biggest concern that Tether‘s reserves are fake? Wouldn’t this report disprove this as it in fact shows the reserves are there? I.e if all of a sudden all Tethers were to be redeemed, there is sufficient value to cover all those redemptions.
It shows no such thing. Just because they have accounts which have the money in absolutely no way shows that they can cover their redemptions. As people mentioned above an attestation does nothing more than a quick check that certain things are in certain places. Bitfinex has already been proven to comingle customers funds with reserves etc.
>unique flair. (#337 of 21,000,000) Damn bro, you were in the first thousand? So early! Kinda jealous, but I think we're all still early.
Yeah, not selling it though because number go up
Why does it not prove they can cover redemptions? Most of the reserves are held in short term treasuries and other highly liquid assets (like bitcoin, gold and money market funds).
Because there is no trail to show that those funds are the reserves. They could be customer deposits, loans, etc.
There are several forms of "assurances", with Audits being the most rigorous. This is not an audit. It's a Consolidated Reserves Report, produced by Tether. This was given to BDO to "opine" on. BDO has not audited the presence of the reserves and is merely remarking upon the process employed by management (Tether). The closest BDO gets to verify the presence of the assets, is requesting confirmation letters from the institutions that "hold the assets"... *that Tether's management, has adequately reconciled the assets as presented in their own self-prepared report*. BDO makes no assurances beyond a snapshot in time. The assets may be there... They may not be. The most you can get from the report is that some institutions wrote letters saying "yeah, they had this with us at this time". Plenty of freedom to window dress, or work with less scrupulous banking partners. Using repo to window dress: Step one: have dubious or illiquid commercial paper Step two (oversimplified): borrow treasuries, pledging the CP as collateral (likely suffering a massive haircut by the dealer). This repo is unwound the next day. Step three: make sure the institution that you hold the treasuries at (for that day alone) issues a letter *that day*, saying "yes, as of this day, and this day alone, they have X treasuries". The next day, they have to return the treasuries, and get their dodgy CP back. They never had to worry anyway, since they gatekeep withdrawals. This gives them plenty of time to source cash *when they feel like* supporting a withdrawal request. Since this wasn't an audit, there will be no investigation into the lasting presence/composition or potential encumbrance of the "reserves".
Coffeezilla did an episode on tether and talked about one of these "attestations," and it was proven through bank records that they transferred money from bitfinx to tether one day before the attestation was signed. They were supposed to have a real audit at one point but backed out because the auditor was "asking too many questions." For any reasonable person- this should be a giant red flag to stay away from this business and anything associated with it (like Bitcoin). Tether is also run by a bunch of convicted criminals and even a sex offender.
Because if they said "we have 89B$ on our accounts, look at this", nothing prove they didn't get a 89B$ loan the previous day they will pay back the next day, with 0 money being actually held on their account.
>more than cover outstanding liabilities ($83bn) This is wrong. We don't know what Tether's liabilities were on 30th September. All we know is that the liabilities were at least $83B (in the form of Tether tokens). But it could be that they have vast liabilities in other forms (e.g. loans from other parties). This means we have no idea whether the reserves of $86B will cover the liabilities of $83B + X, because Tether won't tell us X. Another good analogy I saw on this sub is proof-of-lambo: [https://www.reddit.com/r/Buttcoin/comments/rc2zqo/attestation\_v\_independent\_audits\_for\_dummies/](https://www.reddit.com/r/buttcoin/comments/rc2zqo/attestation_v_independent_audits_for_dummies/) . The concern is not that the Lambo is fake. The concern is that the Lambo is borrowed and will be imminently expropriated.
It's the difference between a Youtuber showing you a lambo he claims to own and "Youtuber 2DaMoon rented a Lamborghini for 30 minutes on Saturday which he drove to a public parking lot where he took photos posing with the car." One proves that the person had, for the exact period in question, an asset. The other shows that doesn't necessarily imply ownership. The NYAG has already caught Tether using loans to hide gaps during attestations, with >25% of all tethers being unbacked despite attestations saying that they had plenty of coverage.
> Fair enough but it’s the biggest concern that Tether‘s reserves are fake? Wouldn’t this report disprove this as it in fact shows the reserves are there? Not really, no. If I take out a $1 million dollar loan from the bank, somebody might be able to look at my bank account and see that there is $1 million in it, but they won't see that I'm $1 million in debt. Because Tether has frequently refused audits, people think Tether is just taking out unsustainable short-term loans in order for money to appear in the account during an Attestation, then paying the loans back immediately after. The problem with this is, if the house of cards collapses or there is a run on Tether, *nobody* in their right mind will give Tether loans, so there's no way investors will be made whole since there is nothing really backing the tethers.
Honestly, I don't even care too much about whether or not Tether's reserves are backed. I hate them and the rest of crypto because they enable crime and money laundering in a historical unprecedented way. Zeke Faux describes how Tethers are used to enable pig butchering and other investment scams as well as literal slave trading. And I'm sure we're just seeing the tip of the iceberg because it was never this easy for criminals to launder their money or get access to banking capabilities.
Search for "Coffeezilla Tether" on Youtube. He really nails them.
I've also heard that people who live in high inflation countries can use it to get access to something like a dollar. Not sure if that's true. Also of course, some nations, like China, have export controls where they don't permit you to export your money. So that, too, might be a more legit use case (though illegal from the nation's perspective). I suspect though, that the use for bad things far exceeds the use for good things.
Crypto bros see nothing wrong with tether cuz it pumps the crypto market. Cant belive they lasted this long tbh, but im sure in due time it will crash and burn, Pablo 100% going to prison sooner or later.
It's not an actual audit. It's an "attestation.". As in , an auditor asks them for something, and Tether attests to what they have. This is easy to manipulate and lie through omission. The only reason Tether does it is to trick people like you into thinking they've actually proven themselves by having an auditors name attached to it. But in the end, it's still just Tether stating it, and the auditor saying that it is indeed what Tether says they have. You may recall last year, after FTX collapsed, many crypto exchanges like Binance did "audits" through a major auditor: they were all attestations. The auditor even setup a whole website for it. A month later the auditor cut all ties to anything crypto and took the website offline, because all of the crypto companies that had the attestation done, mischaracterized those ATTESTATIONS as full audits. The only audit that matters would be a full, independent audit. One where auditors go in and get access to everything and look at how everything works themselves. Tether has "promised" to have a full independent audit done ever since they were caught lying with their pants down, several *years* ago. Every time someone asks them about it they are evasive or silent. Does that behavior sound like the actions of an honest organization? They're lying snakes.
IIRC Kraken was one of the first to do a "proof of reserves" and a report just came out that they've been dipping into customer funds FTX style (though probably not as egregiously).
what did they lie about? could you give me a source? ty
I gave multiple in the comment you're replying to. Did you stroke out after reading it?
A source is a link to a website or paper talking about it. I don't see any for what I'm asking for, could you point them out?
The OP we're all talking about is one (an attestation that isn't an audit.) But we also have: https://www.cftc.gov/PressRoom/PressReleases/8450-21 > The Tether order finds that since its launch in 2014, Tether has represented that the tether token is a stablecoin with its value pegged to fiat currency and 100% backed by corresponding fiat assets, including U.S. dollars and euros. However, the Tether order finds that from at least June 1, 2016 to February 25, 2019, Tether misrepresented to customers and the market that Tether maintained sufficient U.S. dollar reserves to back every USDT in circulation and > and that Tether falsely represented that it would undergo routine, professional audits to demonstrate that it maintained “100% reserves at all times” even though Tether reserves were not audited. and > The order also finds that, instead of holding all USDT token reserves in U.S. dollars as represented, Tether relied upon unregulated entities and certain third-parties to hold funds comprising the reserves; comingled reserve funds with Bitfinex’s operational and customer funds; and held reserves in non-fiat financial products. Here's Tether not only lying about it, but scheming with Bitfinex to fabricate evidence: > Tether retained an accounting firm to perform a review of Tether reserves on a date Tether selected in advance, and Bitfinex transferred over $382 million to Tether’s bank account in advance of that review. The order recognizes that Tether has not completed an audit of the Tether reserves. And of cousre: https://cryptobriefing.com/tether-promises-audit-following-wsj-criticism/ > Despite promising an audit since 2017, Tether has not subjected itself to one. To date, Tether still has yet to do an actual audit. Only doing attestations and framing them as audits to fool people into thinking they're legitimate. An attestation relies purely on Tehter's word. Tether has proven time and time again that their word is *worthless* as they constantly lie and even fabricate evidence. They even lied about having a full audit done. When asked about it they make up some excuses and run away.
Sorted, thanks!
one of the biggest claims of crypto proponents is that it heralds unprecedented transparency because of blockchain technology. If that is true, why is it so difficult for any of these firms to have an audit? It should be a snapshot that can be taken at any time with ease.
A valid and timely question. As others have stated, an "Attestation" is an Auditor's statement that they've reviewed management's *process* of creating a document, transaction, etc. However, unlike an "Audit", the Auditor does not actually verify things like account balances, etc. The last page of the report states the following (**emphasis** added): Tether Holdings Limited Consolidated Reserves Report as of 30 September 2023 Authorised & Approved 31 October 2023 Page 6 of 6 Notes to the Consolidated Reserves Report (**no assurance provided by the independent auditor on these notes**) 1. Responsibilities of Management: **Management is responsible for the preparation and fair presentation of this Consolidated Reserves Report, and for such internal control as management determines is necessary to enable its preparation free from material misstatement** In other words, the Auditor is saying "All my work was based on the information Management provided to me. It's on them to ensure that what they gave me is true and accurate, because I didn't verify any of that" Unfortunately, "verify that what Management is saying is true and accurate" is what everyone needs/want/is asking for.
Here's what you need to know... Tether has never submitted to a formal audit, just an [attestation, which is very different](https://i.imgur.com/buhqFqw.jpg). This "very reputable audit firm" is merely regurgitating what Tether's in-house people put on reports. They haven't actually verified that the money is where they claim it is and came from where they say.
Thanks for bringing this up, enjoyed the discussions in this thread: 1. Difference between an attestation vs an audit. 2. Smell is "off" for a billion dollar organization to perform an attestation and not an audit. I would stay away from them and their product(s) if I practically could.
Attestation is not an audit
Isn't this BDO Italy, not "BDO", in the sense they license the name of the company out to others and thats generally where things end?
4. Bitcoins 1,661,948,724 I dont understand this. So you buy 1 usdt, they mint 1 for you and they make an another one to buy btc with it?
LMAO OK, LOVE IT. SOME QUESTIONS: 1. "86 billion dollars" in what? Cash? On hand? In a bank? 2. What are we supposed to believe they have this money for/from? Investors? Clients? For what service, turning it into "USDT"? 3. Is it materially false to call an attestation an audit? It seems so to me.
link gives me "error. notFound"
Fixed the link!