Stablecoin issuer Tether is reportedly engaging with a Big Four accounting firm to conduct its first full financial audit. This development comes at a time when the company is facing increased scrutiny from the crypto community and regulatory bodies regarding its reserves and transparency.
Tether CEO Paolo Ardoino has emphasized the importance of this audit, stating that it is a “top priority” for the firm. With rising concerns mirroring the catastrophic FTX liquidity crisis, Ardoino’s commitment to transparency signals an important step forward for Tether in reassuring investors. The audit will verify that Tether’s stablecoin USDT is indeed backed at a 1:1 ratio by its reserves.
Ardoino remarked, “If the President of the United States says this is a top priority for the U.S., Big Four auditing firms will have to listen.” This statement underscores the potential implications that the pro-crypto policies of the current administration may have on the auditing processes for crypto firms.
Tether has previously been criticized for its lack of independent audits. While the company currently submits quarterly reports, a full independent annual audit would provide a higher level of assurance to both investors and regulators. As of now, Ardoino has not disclosed which of the Big Four firms—PricewaterhouseCoopers (PwC), Deloitte, KPMG, or Ernst & Young (EY)—will be chosen for the audit.
The call for greater transparency aligns with significant comments made by industry figures. For instance, Justin Bons, founder of Cyber Capital, labeled Tether as “one of the biggest existential threats to crypto,” citing the firm’s inability to provide proof of holding $118 billion in collateral. Furthermore, the CFTC has previously fined Tether $41 million for misleading assertions regarding its reserves.
In a positive light, Tether recently reported a profit of $13.7 billion in 2024, a strong indicator of its business viability. Additionally, the hiring of Simon McWilliams as the new chief financial officer is seen as a strategic move to prepare for the forthcoming audit.
Despite increasing scrutiny, Tether has expressed its discontent over recently imposed European regulations which have prompted exchanges such as Crypto.com to delist USDT among other tokens to comply with the MiCA framework. A spokesperson for Tether stated that they find these rushed actions disappointing, as they fail to clarify the reasons behind such decisions.
As Tether moves forward in its audit process, the outcome will play a crucial role in shaping the future of not just the firm but the broader crypto market as well. By adopting transparency measures, Tether aims to build trust among users and regulators alike.
