The stablecoin issuer Tether is allegedly collaborating with a Big Four accounting firm to examine its asset reserves and confirm that its USDT (USDT) stablecoin is supported at a 1:1 ratio.
Tether’s CEO Paolo Ardoino is reported to have mentioned that the auditing process would be simpler under pro-crypto US President Donald Trump. This follows increasing apprehensions in the industry regarding a potential liquidity crisis reminiscent of FTX for Tether due to the absence of third-party audits.
Tether set to conduct first comprehensive audit amidst scrutiny
“When the President of the United States states that this is a top priority for the nation, the Big Four auditing firms will need to take note, so we are quite pleased with that,” Ardoino remarked to Reuters on March 21.
“It’s our highest priority,” Ardoino indicated. Reports have noted that while Tether currently produces quarterly reports, it does not undergo a full independent annual audit, which is far more thorough and provides greater assurance to both investors and regulators.
Nevertheless, Ardoino did not clarify which of the Big Four accounting firms — PricewaterhouseCoopers (PwC), Ernst & Young (EY), Deloitte, or KPMG — he intends to collaborate with.
Tether recorded a profit of $13.7 billion in 2024. Source: Paolo Ardoino
Tether’s USDT preserves its stable value by asserting it is pegged to the US dollar at a 1:1 ratio. This indicates that each USDT token is underpinned by reserves equivalent to its circulating supply.
These reserves consist of traditional currencies, cash equivalents, and various other assets.
Earlier this month, Tether appointed Simon McWilliams as chief financial officer in anticipation of a comprehensive financial audit.
Concerns from the industry regarding Tether’s audit deficiencies
In September 2024, Cyber Capital founder Justin Bons was among the individuals in the industry expressing worries about Tether’s transparency.
“[Tether represents] one of the greatest existential risks to cryptocurrency. We must have faith that they possess $118B in collateral without any verification! This remains true even after the CFTC penalized Tether for deceiving about their reserves in 2021,” said Bons.
Related: Tether freezes $27M USDT on sanctioned Russian exchange Garantex
At around the same period, Consumers’ Research, a consumer advocacy organization, released a report condemning Tether for its lack of transparency.
Merely three years earlier, in 2021, the United States Commodities and Futures Trading Commission (CFTC) fined Tether a $41 million civil monetary penalty for misrepresenting USDT as being fully backed by reserves.
Meanwhile, Tether has recently expressed disappointment over new European regulations that have compelled exchanges like Crypto.com to remove USDT and nine other tokens to adhere to MiCA.
“It’s disheartening to witness the hasty actions propelled by comments that provide little clarity regarding the rationale for such decisions,” a spokesperson for Tether informed Cointelegraph.
Cointelegraph reached out to Tether but did not receive a response by the time of publication.
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