June 13, 2024

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SEC fines former Tether auditor over accounting malpractice

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The U.S. Securities and Trade Commission declared Monday it filed and settled a US$1 million high-quality versus Friedman LLP, Tether’s former auditing agency, about “serious violations of the federal securities legislation.”

See connected posting: What is the correct strategy to regulating stablecoins? 

Quick info

  • The SEC noted getting a number of instances of “improper professional conduct,” including a failure to “respond to fraud risks” and “exercise due experienced care and professional skepticism.”
  • In addition to the US$1 million civil penalty, Friedman LLP has agreed to spend US$564,138 in disgorgement and prejudgment curiosity and to teach its personnel in good auditing treatments.
  • The SEC investigation produced no mention of Tether, its partnership to the organization possessing been “dissolved” and its auditing halted in January 2018 due to gradual progress, according to a agent of the stablecoin issuer.
  • This follows Tether’s various clashes with U.S. legal institutions, including its petitioning of the New York Supreme Court in August 2021 to avoid the state’s attorney general’s business from publishing paperwork outlining its reserves, even more increasing uncertainties about their potential to financially again up the stablecoin. 

See similar article: Need to Tether’s shrinking dollars reserves be trigger for investor be concerned? 

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