Tether has been fighting an uphill battle ever since it came into being, to prove its legitimacy to the blockchain community. Their latest attempt to win people over involves the hiring of top law firm Freeh, Spokin & Sullivan LLP to spend two weeks inspecting various aspects of Tether, including its correspondence with the US dollar, to which it is pegged.
The choice of firm certainly wouldn’t appear to be anything but deliberate either; Louis Freeh, one of the founders, is a former FBI director, while the others are ex-high court judges. In Tether’s official “transparency update”, they wrote:
Earlier this year Tether engaged Freeh, Sporkin & Sullivan LLP (FSS) to review bank account documentation and to perform a randomized inspection of the numbers of Tethers in circulation and the corresponding currency reserves… As part of the engagement, FSS was tasked with investigating the U.S. Dollar (USD) balances in accounts owned or controlled by Tether at its banks, including randomised selections of the appropriate confirmation dates, and reporting to Tether as to the results of such inquiries. Further to the engagement, FSS selected the date for balance confirmations without any form of prior notice to, or consultation with, Tether.
When inspected on June 1st, the firm found that the amount of Tether in circulation was “nearly identical” to the money that Tether held – which it should have been. And Tether were anxious to point out that this date was selected at random, without their influence:
It is important to note that unlimited, unhindered access to Tether’s bank accounts was provided to FSS for their review – the June 1st date was selected by FSS with no input from either Tether or its banking partners, and FSS did not provide notice until the final report was submitted.
Whether or not it makes any difference to the public’s view of Tether though, is doubtful. In between thefts, alleged price manipulation and high-profile accusations from Bitfinex about how Tether manages its reserves, it has been a very difficult 9 months for the controversial crypto – and it is unlikely that this legal inspection will completely reverse opinion, if at all.