Failure of Proper Audit is the Reason the Former Auditor of Tether is Fined $1.5 Million by the SEC

As per a Friday judgment, the United States Securities and Exchange Commission (SEC) fined Friedman LLP, the previous auditor for Tether, $1.5 million.

In its assessments of two corporations from 2017 to 2020, the commission discovered multiple cases of “improper professional conduct” by the accounting firm.

In its engagement with the grocery chain iFresh, Friedman LLP allegedly was unable to establish and execute suitable audit procedures. Additionally, the SEC claims that the firm did not apply professional skepticism and proper specialist care when managing the audit of a different unspecified company.

The company’s assertion that the makeup of its reserves is economically sensitive in a competitive industry has contributed to the ongoing scrutiny of Tether’s financial operations. Regulators have increased their monitoring of the larger crypto sector.

The newest revelation in a lawsuit brought by cryptocurrency traders in 2021 alleging the stablecoin issuer attempted to artificially inflate the Bitcoin (BTC) price with unbacked tokens was ordered the week before from a judge in the United States requiring Tether to yield documents proving the dollar support of its stablecoin.

The Commodity Futures Trading Commission (CFTC) conducted additional research and discovered that Tether merely had sufficient dollar reserves for one-fourth of the 2016-2018 timeframe. 

As of the time of writing, neither Tether nor Friedman LLP has not replied to inquiries for clarification.