Talk for Story "Is Tether really backed by USD? The evidence so far"

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  1. We need to be very clear that if Tether makes a claim that it is fully backed by USD, then it is up to them to document that claim. All they really need to do is show their dollar bank account and show the number of tethers outstanding. These would be basic documents that any legitimate business would have on hand and could produce in 5 minutes. The fact that they haven’t produced the documents several months after promising them would lead most people to conclude that they can’t back up their claim. There are some fine points about checking the documents – mainly the exact date and time of the documents should be the same. If that can’t be done, then you’d just need to check the documents, say for 5 days in a row. Another fine point would be the document on the number of tethers outstanding. Bank accounts are hard to fake, but the method of determining the number of tethers might be more difficult (but not if it was important to Tether to document this). Their accounting firm quit the engagement. This is probably the most important fact. If they can’t get the information that they are supposed to attest to then, ethically, they have to quit. You probably won’t be able to talk to them about this (unless everything clears up and Ether actually is 100% backed by USD). You should be able to talk to accounting profs or accounting association ethics officers about how such an accounting would work, and especially what the accounting firm leaving means. Nobody is going to want to say is so many words “the lack of an audit shows that Tether is crooked,” but the responses will all be consistent with that possibility. And please don’t be a sucker here – if they can’t document their promises, then they almost certainly aren’t true.

    1. My understanding is that they have let some people see those documents under a nondisclosure agreement, with the premise behind it being that they need to protect the privacy of their banking arrangements. I find that hard to understand, but at least plausible. They have offered to show me the proof, but under an NDA. I’d only be able to report in a limited way about the results. I’m not yet prepared to go that route, as NDAs are problematic for doing real journalism. So I’m interested in how we can dig deeper without that.

      1. I don’t think the NDA reasoning is plausible at all. It reminds me of a bubble company during the South Sea bubble that promised “an undertaking of great advantage, but nobody to know what it is” So they might provide you documents that purport to show that they have money in the bank. How would you be able to verify the documents? Could you take a first-class forensic accountant with you and get his opinion on the adequacy of the documents? (Call me a cynic, but the opinion would obviously be “inadequate”) Would you be limited to saying either “the documentation offered satisfied all my questions about whether the dollar backing exists” or “I was not satisfied in the end that full dollar backing exists.”? If so, you wouldn’t be able to back up your opinion if it was the 2nd alternative. It really is up to them to provide full documentation that you can cite, if anybody is to believe their claim. Since they have refused to provide the documentation, they’ve effectively proved the opposite of their claim. Please don’t allow yourself to be used as a tool here.

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