Tether’s Former Auditor Fined $1M

As it became known, the SEC filed charges against Friedman LLP accounting company. Recall that in 2017 the company provided auditing services for the stablecoin issuer Tether. Thus, “serial violations of the federal securities laws” and “improper professional conduct” are among the charges.

The SEC found that from 2017 through 2020, Friedman LLP violated the standards of the Public Company Accounting Oversight Board when performing audit procedures for Chinese supermarket chain iFresh.

Moreover, the auditor was found to have performed audit procedures negligently, and in particular being unable to “respond to fraud risks” and “exercise due professional care and professional skepticism”.

Although the document contains no direct mention of Tether, they partnered with Friedman LLP from May 2017 to January 2018. After that, the cooperation was terminated due to insufficient speed of audit.

To settle the SEC charges, Friedman LLP is to pay over $1.5M in total monetary relief and provide additional staff training.

In addition, in February 2012, the Bitfinex and Tether crypto exchange reached an agreement with the New York State Attorney General’s Office. Thus, the agreement was reached as part of a case on the company’s financial mismanagement related to the loss of $850 million. Then, as part of the settlement, Bitfinex and Tether paid the State of New York $18.5 million.