The US Securities and Exchange Commission or SEC has fined Friedman LLP, the former auditing firm of Tetherfor an amount amounting to $1.6 million according to Alyz on Bitcoinist.
It has been over a year since growing crypto troubles prompted global financial watchdogs to step up their efforts to ensure user protection. In particular, the previous year’s crash of stablecoin Terra USD hit the market broadly and triggered a poll on crypto-oriented platforms.
Friedman LLP conducted Sloopy audits on two companies
According to the SEC order published Monday, investigations found the New York-based auditing firm filed a inappropriate “professional conduct” and operated outside of “federal security laws.”
In particular, Friedman LLP agreed to pay a monetary fine of $1 million along with additional penalties against repayment and “prejudgment interest,” settling the settlement at more than $1.6 million in total. In the future, it will censor the auditing firm to ensure that proper professional training is carried out in accordance with the agreement.
The order reveals that the accounting practices of the auditing company were not transparent between 2015 and 2020, and was unable to maintain security to board the “risks of fraud”. government officials Friedman’s auditor was caught making false statements while conducting audits of a Chinese supermarket chain, iFresh, and a second unnamed company. The auditor lied that he proceeded according to the rules of the Public Company Accounting Oversight Board (PCAOB).
The order stated:
“Friedman also failed to obtain sufficient appropriate audit evidence, respond to fraud risks, or perform procedures to identify related party transactions during his iFresh audits.”
It is worth noting that Tether, which faced multiple legal disputes at that moment, dissolved its association with the defendant company about seven months after the collaborationalleging that FiredmanLLP was unable to conduct audits within the required time frame.
Tether reserve still in doubt
At the latest on the legal barriers to Tether, a judge of the Northern District Court of New York ordered the issuer of the stablecoin on September 19 to Submit proper filings showing supporting assets of your native currency USDT. The new order followed 2019 Tether case when a group of investors accused the company of manipulate the price of Bitcoin by buying its large amount with unbacked USDT.
According to the accusations, the USDT did not receive 1:1 backing against the US dollar for some time. Therefore, in the agreement with the New York Attorney General in February 2021Tether agreed publish periodic reports of its reservations and closed the investigations by paying 18.5 million dollars.
But, the new order comes after the plaintiffs’ request to ask the company to provide a detailed picture of your reservation. The plaintiffs, in return, insisted that may have negative impacts on platforms for making your sensitive financial information public. But, the judge responded that the documents sought by the plaintiffs are “undeniably important”.
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