Tether has released a surprise “Transparency Update” that purports to show it has enough funds in the bank to cover the $2.6 billion of USDT in circulation. The company has stopped short of a full audit, however, leaving critics bemoaning Tether’s inability to settle the solvency debate once and for all.
Also read: Major Korean Crypto Exchange: $31 Million Vanishes
Tether Tries to Dispel the FUD
The report, which was produced by the law firm of a former FBI director, carries weight from a legal perspective. But it fails to provide cast iron guarantees that Tether is not operating a fractional reserve. Until the company’s accounts are professionally audited, the true state of Tether’s finances will remain a point of speculation.
“As many are aware, Tether and related parties have been the subject of scrutiny over the course of the past several months,” begins the Transparency Update. “We have spent our time largely disregarding these allegations, instead letting our efforts, and the continued faith of our community of users, speak for themselves.” Many cryptocurrency traders would rather Tether had addressed these issues sooner rather than letting the blind “faith” of its community serve as a guarantee.
Enter Freeh, Sporkin & Sullivan
“Recent reports have opened our eyes to the fundamental lack of understanding surrounding Tether, the issuance and redemption mechanisms, and the compliance procedures that we have built,” continues the Transparency Update document. “To mitigate this, we will be taking additional steps aimed at opening up Tether to the general public and clearing away any uncertainty that may exist.”
The simple answer, and the one that cryptocurrency holders have been screaming out for, is for Tether to commission an independent audit. Only once that has been completed can the lingering doubt disperse and faith in Tether be restored. While today’s report is hardly the all-clear that the crypto community might have hoped for, its release still helped propel BTC up by $150, undoing the damage inflicted hours previously by the news of Bithumb’s $31 million hack.
Do you think Tether has the funds to cover all of the USDT in circulation? Let us know in the comments section below.
Images courtesy of Shutterstock, and Tether.
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The post Tether Shows Law Firm Its Funds But Stops Short of an Audit appeared first on Bitcoin News.
Source: Bitcoin.com