🪙 Stablecoin giant Tether has finally decided to undergo a full financial audit. After years of criticism and suspicion, the company is seeking a Big Four auditor to confirm the backing of its USDT token.
🤵🏻 Tether CEO Paolo Ardoino has said that conducting a full audit is the company’s “top priority.” He believes that the process will be much easier with the support of the new U.S. President Donald Trump, known for his pro-crypto stance.
“If the president of the United States says this is a top priority for the country, the Big Four audit firms are going to listen, so we’re very happy with that,” Ardoino told Reuters on March 21.
❗What is a full audit and why is it important?
Tether currently publishes quarterly reports but does not undergo a full independent annual audit. The difference is significant — a full audit is much more extensive and provides more assurance to investors and regulators.
❗Tether says USDT maintains its stable value by being pegged 1:1 to the US dollar. This means that each USDT token is backed by reserves equal to its circulating supply. These reserves include fiat currency, cash equivalents, and other assets.
❗Interestingly, Ardoino did not specify which of the Big Four audit firms — PricewaterhouseCoopers (PwC), Ernst & Young (EY), Deloitte, or KPMG — the company plans to work with. The Big Four are the four largest global audit and consulting firms.
❗Preparing for a Big Audit
🛂 In preparation for a full-scale financial audit, Tether hired Simon MC Williams as its CFO in early March. It appears the company is serious about improving its reputation with investors and regulators.
And for good reason. Tether’s 2024 profit was a whopping $13.7 billion, making it one of the most successful players in the cryptocurrency market. But with success comes growing demands for transparency.
❗Criticism and Mistrust: Is There Cause for Concern?
In September 2024, Cyber Capital founder Justin Bons expressed serious concerns about Tether’s lack of transparency.
“USDT is one of the biggest existential threats to cryptocurrency. We are forced to believe that they are holding $118 billion in collateral without any evidence! And this is after the (CFTC) fined Tether for lying about its reserves in 2021,” Bons said.
Around the same time, consumer advocacy organization Consumers’ Research published a report criticizing Tether for its lack of transparency.
❗The mistrust is well founded. In 2021, the US Commodity Futures Commission (CFTC) fined Tether $41 million for lying about its USDT reserves.
❗The European regulator is serious.
🛂 Adding to the audit issues are regulatory complications. Tether recently expressed frustration with new European regulations that forced exchanges to delist USDT and nine other tokens to comply with European MiCA requirements.
Tether’s initiative to conduct a full audit could be a turning point for the stablecoin industry. If the largest stablecoin can prove its solvency, it will strengthen trust in digital assets as a whole.
However, the key question remains: are all 118 billion USDT tokens in circulation really backed by real dollars and assets? We will get the answer to this question after the audit is completed.
#SECCryptoRoundtable #USDT #Tether #TetherTreasury #MiCA
