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RE: The MASSIVE Tether Ticking Time BOMB

I could not agree more with your assessment of Tether as a ticking time bomb.

I would love to know the real reason the Friedman/Tether relationship ended. The way I see it, there are two likely reasons: 1) The auditors were asking too many questions (i.e. it was likely they were going to uncover the scam) and Tether called it off OR 2) The auditors discovered the fraud and didn't want to issue an opinion so they ended the audit.

I lean more towards option 2. If I were Friedman I wouldn't want to be associated with a negative event in the crypto space. Especially when it sets a precedent for future audits of companies in the crypto space. No company will want to hire the auditors that both destroys a crypto asset and, most likely, brings down one of the biggest crypto exchanges.

I am a CPA and auditor at one of the big global accounting firms. I have seen this same type of activity happen a few times in the past (not to me personally, but to some of my colleagues). It usually results when the auditor finds a problem and the client refuses to acknowledge it's a problem. Instead of getting involved in the scandal and opening the door for legal exposure, the auditor declines to issue an opinion and severs the relationship with the client. If Friedman issues a negative audit report and Tether disagrees, they could (and probably would) sue Friedman for various reasons, even if they are hiding a scandal or fraud. Frankly, Tether is just a ticking time bomb, and it is in Friedman's best interest to distance themselves from the blast as much as possible.

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There is also a possibility that the auditor simply did not want to risk its reputation because the case is highly charged and auditing is difficult and such auditing of crypto currency has never been done before.

That is a good and valid point.

Tether somewhat reminds of WorldCom...
I agree ,i bet the auditors most likely were looking at inflated or false numbers ...and asked "what is this?"
As anyone whos works at a legitimate financial company knows...reputation is huge .

Tether has always been a bit shady in regards to what they have falsely represented.

(In a criminal aspect, its brilliant because too many investors in this space...don't take the time to actually read up the white paper. They just dump cash into what's "hot")

This would be the ideal market for anyone who follows PT Barnum's famous quote
"There's a sucker born every minute"

Great comment btw.

Since Tether will likely do everything in their power to make sure a third party does not expose them, how do you think it will play out? Unless regulators step in and demand a legitimate audit, the only way I see the bubble popping is if a large number of USDT holders try to cash out for USD. Can you even do that directly through Tether? Are there any exchanges that offer a USDT-USD pairing?

You can use Kraken for exchanging USDT-USD

Personally, it took me a little while to realize USDT ≠ USD. It is used in exchanges as if it was the same.

I've always been leery of tether but didn't realize until now that Poloniex and binance quote their Bitcoin prices in Tether. Also, this is the number that is picked up by coinmarketcap

See thats the problem i believe.
An exchange might have liability issues based on that.

ALOT of people think its USD.

Kinda scary when you think how many have their positions based on this aspect.

Thanks for your insights. I'm not sure which is the case, but I'm excited to find out. The only part I am sure about is something is afoul - my spidey sense is tingling!

Thanks for that insigth. :)

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