- Tether is working with a Big Four firm for a full audit but has not disclosed which one.
- Tether was fined $41M by the CFTC in 2021 for misleading claims about its USDT reserves.
- Tether claims USDT is backed 1:1 by reserves, but doubts remain due to past transparency issues.
Tether, the company that operates the stablecoin USDT, has hired a major auditing company as it plans to conduct a thorough audit of its assets. CEO Paolo Ardoino stated that the most important thing to note is that USDT is backed 1:1.
Tether has long claimed that each USDT token is fully backed by assets, including cash and equivalents. However, without an independent audit, doubts have persisted. Unlike some competitors, Tether has only provided quarterly reports. The company is now working toward greater transparency, though Ardoino has not yet revealed whether Deloitte, Ernst & Young (EY), PricewaterhouseCoopers (PwC), or KPMG will conduct the audit.
Regulatory Scrutiny and Transparency Concerns
Tether’s move to conduct a complete audit has come several years after the company faced criticism over its financial reserves. Tether, the firm behind the USDT stablecoin, has been under a lot of criticism from regulators and other members of the industry on whether it has the true value it claims. Tether has now engaged the Big Four firm to conduct a full audit of its USDT reserves.
In 2021, the U.S. Commodity Futures Trading Commission (CFTC) fined Tether $41 million for misleading claims about its reserves. However, critics, such as Cyber Capital’s founder Justin Bons, have noted that even if the information is self-reported, there are still potential issues for the wider crypto market.
New Regulatory Landscape
In a bid to boost financial governance, Tether has hired Simon McWilliams as the firm’s new Chief Financial Officer (CFO). Having worked in the past in auditing and asset management, it is anticipated that he will assist in the audit process as well as enhance transparency in the company’s financial position.
At the same time, the regulatory landscape is shifting. Ardoino suggested that the audit could proceed more smoothly under U.S. President Donald Trump’s administration, which has expressed support for cryptocurrency. He believes Trump’s stance may encourage major firms to work with crypto companies.
Potential Effects on the Crypto Market
Tether USDT audit may affect the market sentiment in one way or another. If the audit supports full reserve banking, this could lead to people trusting USDT and set a positive precedent for other stablecoins.
Tether is currently the most popular stablecoin with more than $140 billion USDT in circulation to date. These assumptions could potentially redefine the direction that the USDT and its role in the cryptocurrency market will follow.
