A History of Tether and Bitfinex’s Audits, Attestations, Memos, and Letters: Both Promised and Actual – Bennett's Articles
Amidst all the confusion surrounding Tether and Bitfinex it can be difficult to keep track of what they have actually provided in terms of audits, attestations, and other documents to support their contentions. Here I will summarize, but the important note that needs to be included at the top is that both Bitfinex and Tether once hired an auditor, but neither ever completed the audit.
Ever since Tether was founded they have promised to provide a full financial audit. It feature prominently in their whitepaper and on their website for years. They have never provided this audit, but have provided a variety of other documents meant to convince the public that they had sufficient backing for the tethers in circulation.
In March of 2015 Tether and Factom announced (archive) they had formed a partnership to provide greater transparency into Tether’s holdings. The partnership never provided any additional transparency into Tether or its operations.
In August of 2016 Bitfinex promised (archive) to provide a full financial and security audit after they were hacked. They initially announced that Ledger Labs was hired to perform both. No audit from Ledger Labs was ever released. This was likely in part due to the fact that Ledger Labs was not able to provide financial audits.
In September of 2017 Tether announced (archive) that they had engaged Friedman LLP out of New York to audit them. This audit would never occur, we would eventually get an update from a Tether spokesperson saying the relationship dissolved, citing the “excruciatingly detailed procedures” (archive) that the auditor wanted to undertake.
Also in September of 2017 Tether released from previous attestations from a small accounting firm in Taiwan called TOPSUN. These were monthly attestations attesting to Tether having sufficient backing for the end of the month from December 2016 through March 2017. Strangely these were not completed at the end of the respective months but were all completed on May 23rd 2017. (Strangely approximately two weeks after they announced that Friedman had been brought on to audit Bitfinex)
- December 2016 (Archive) (My copy)
- January 2017 (Archive) (My copy)
- February 2017 (Archive) (My copy)
- March 2017 (Archive) (My copy)
Friedman LLP never provided an audit for Tether, but they did provide a consulting memo (archive) (my copy) to their reserves on September 15th 2017. On September 14th 2017 Tether had no bank accounts. On September 15th 2017 Tether got a bank account at Noble Bank, founded by their co-founder Brock Pierce. They transferred in several hundred million dollars from Bitfinex’s account at Noble and that evening Friedman checked the account to perform the attestation.
In June of 2018 Tether was able to provide another consulting memo (archive) (my copy), this time from a firm called Freeh, Sporkin & Sullivan. Eugene Sullivan one of the partners for FSS was also an advisor to their bank, Noble Bank, which had been founded by Brock Pierce, one of Tether’s cofounders. Shortly after this date Bitfinex began taking hundreds of millions from Tether’s bank accounts.
On November 1st 2018 Tether announced they were banking with Deltec Bank and Trust in the Bahamas. As part of this announcement they included a letter (archive) (my copy) signed by the bank attesting that Tether’s ‘portfolio cash value’ was sufficient to back the tethers in circulation. On November 2nd 2018, the day after this letter Bitfinex took hundreds of millions of dollars from the account.
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