This is a positive sign. I had previously been doubtful that Tether/Bitfinex even had $2.5 billion. This shows they did.
What this document is not, however, is a statement from an auditor. Given (a) Tether's previous auditors resigned and (b) Tether continues to claim, on its website, that it is audited, that remains a red flag.
(In the history of funny money being issued by banks or exchanges, the traditional switcheroo involved presenting customers' deposits as the bank's own funds. Given the totality of this situation, that is what I assume is going on.)
One of the first lessons I learned about investing was, nothing is done until someone puts their signature on a document.
Looking at what's posted I don't see anyone of these 3 former judges or FBI director putting their signature on this.
That's pretty telling in of itself.
"The above confirmation of bank and tether balances should not be construed as the results of an audit."
Hey, look, another memo misleadingly posted as if it were an actual audit. Completed audit count: still ZERO, despite fraudulent claims on the website claiming "frequent professional audits".
One of the issues the previous Friedman LLP memo (also misleadingly posted as if it were an audit, which many fell for) raised was that Tether might not actually control the funds in their bank accounts - i.e. that Bitfinex might be parking customer deposits in Tether's account to make it look legit. Looks like that is still unresolved here.
Mixed emotions here - on the one hand - its not an accounting firm and they are very clear that it wasn't done in accordance with Generally Accepted Auditing Standards and so that gives the firm FSS a cop out should anything go wrong. On the other hand - a reputed firm has staked its reputation to do this - and being wrong would destroy their credibility.
So they have a larger operating single account than a lot of countries have for revenue.
If they were a country, they'd be #140, with just one account. #133 for their total according to the report.
I find it very hard to believe that a company that has that amount, would be anywhere close to US borders, since... there has been no audit of any sort, by anyone; including governments.
In some ways this is a positive news in that Bitfinex/Tether managed to have 2.5Billion in bank on June 01st, 2018.
That seems rather plausible unless FSS completely messed up verifying bank sources(ie someone impersonated a respectable bank, or a micro bank official lied).
So that is all that this statement says: on June1st,2018, Tether accounts had 2.5Billion USD in bank.
This is interesting for sure. It answers at least one question, and certainly makes the idea that they are solvent somewhat more plausible.
That's all it does though, given that there's absolutely no effort made to determine liabilities. For all we know those accounts could have been funded with a $2bn loan, or better yet customer deposits (ie via Bitfinex) which this analysis is completely silent on.
With that said, it's interesting.
So Tether is keeping 2 billion dollars in two bank accounts, way-way-way-way-way above the FDIC protection limit?
Ignoring anything else, that seems astoundingly stupid.
"Privileged & Confidential"
Heh.
Anyway, follow https://twitter.com/Bitfinexed for some more happiness arount them.
While not an audit like many have said, this is better than the continued silence.
Tether has shown proof of reserves, by former director of FBI. Examinations took place in Washington, D.C.
From my understanding of how SWIFT works, USA should have logs of every transaction to/from these accounts. Should be pretty straightforward to calculate final balance, assuming that account info is known. Unless someone was just shipping containers of cash. I wonder if there is a way to get answer from USA authorities regarding that.
Does anyone know of a publicly available resource one can use to determine how likely a number was randomly generated by a human? Wired [1] had a high-level approach and it seems like this paper [2] has some interesting ideas as well. Humans are truly poor at creating random numbers [3] and I wonder how well 1,968,538,584.82 and 576,528,652.00 would do in such a test.
[1] http://www.wired.co.uk/article/how-to-detect-fake-numbers
[2] http://journals.plos.org/plosone/article?id=10.1371/journal....
eeeeeh I dunno
1) FSS is not an accounting firm and did not perform the above review and confirmations using Generally Accepted Accounting Principles.
2) The above confirmation of bank and tether balances should not be construed as the results of an audit and were not conducted in accordance with Generally Accepted Auditing Standards.
3) FSS makes no representation regarding the sufficiency of the information provided to FSS and all inquiries made by FSS have been directed to the Client and/or third party personnel responsible for maintaining such information, and the data has been obtained from the Client and/or third party personnel responsible for maintaining such information.
4) FSS procedures performed are not for the purpose of providing assurance and are limited to the findings listed above as of June 1st, 2018, Close of Business. FSS has not performed any procedures or made any conclusions for activity prior to or subsequent to June 1st, 2018, Close of Business.
5) FSS did not, as part of the Engagement, arrive at any conclusions as to Tether’s compliance with applicable laws and regulations in any jurisdiction.
6) FSS has assumed, without further inquiry, that the bank personnel providing the confirmations were duly authorized to provide such confirmations, and that the confirmations were correct.