Tether, which issues the world’s largest stablecoin, USDT, is reportedly working with a Big Four accounting firm for a full audit, which marks a significant step toward transparency. This comes at a time when many in the industry are worried about the lack of independent verification Tether has been providing over their reserves, which has been a looming shadow over the stablecoin giant for years now.
Change of Tide: Tether Gets Set to Pursue Complete Financial Transparency
Tether’s CEO, Paolo Ardoino, disclosed the intent to pursue a comprehensive audit, stating that it’s a ‘top priority.’ He believes that a pro-crypto stance from the president, Donald Trump, would ease the situation, as “Big Four auditing firms will have to listen.”
“Tether gets bashed a lot, saying they don’t provide enough transparency. Well, the answer is simple: if the president decides to work with us on this level, we’re all for it,” Ardoino mentioned to Reuters on March 21.
Currently, Tether’s subsidiaries prepare quarterly reports, while an annual audit remains outstanding. This audit could provide investors with a more comprehensive evaluation while also giving regulators additional confidence. Ardoino confirmed his intention to conduct an audit, but he did not disclose the selection of the Big Four—PwC, EY, Deloitte, or KPMG. The 1:1 Peg: Plasma Price Control While Tether’s USDT remains stagnant, it claims to have a 1:1 peg, just like the US dollar. Tether purports to back each USDT token with reserves of traditional currencies, cash equivalents, and other assets, ensuring it meets its circulating supply. To prepare for the aforementioned audit, Tether recently recruited Simon McWilliams as the firm’s chief financial officer. Coalition Forces: Demands for Tether’s Transparency The demand for a full audit stems from escalated concern within the industry about Tether’s lack of transparency.
In September 2024, Bons voiced his worries, bringing up Tether and saying it is “one of the biggest existential threats to crypto,” as he cited Tether as claiming to have $118 billion worth of collateral without proof being provided. Bons highlighted Tether’s 2021 fine by the United States Commodities and Futures Trading Commission (CFTC) for misrepresenting reserves as collateral underpinning their issued stablecoins.
Around the same time, Consumers’ Research, an advocacy group, also brought out a report criticizing Tether for lack of transparency. Tether’s civil monetary penalty resulted in a $41 million fine—not just a reminder of the CFTC’s reprimand, but also a reminder of the CFTC’s own reprimand.
Regulatory Challenges: MiCA and Delisting Issues
Tether uttered frustration recently over the European Union’s Tether disavowing support for Mid-Centralized Assets (MiCA) regulations, which have enforced a ban for businesses like Crypto.com to stop supporting USDT along with nine other tokens. People have blamed the lack of clarity in “MiCA” for prompting such haste.
“It is disappointing to see the rushed actions claimed without clarifying reasoning,” the Tether spokesperson commented.
A Pivotal Moment for Tether: Building Trust
Tether’s decision to apply for and undergo an audit with one of the Big Four accounting firms represents a significant milestone. With new promotional concerns, Tether aims to build trust and address worries in the crypto ecosystem with regulators by ensuring its claims regarding its reserves are not mired by multiple controversies.
Unlike previously, this step could be transformational, unleashing a paradigm shift in the stablecoin realm by creating a mark for responsibility and governance on usage for others that wish to innovate. While the audit is underway, the industry will want to know if Tether has the reserves it claims and the operational structure to manage them.
