Tether Seeks Big Four Firm for Its First Full Financial Audit Amid Growing Scrutiny

Tether, the leading issuer of the USDT stablecoin, is reportedly working with a Big Four accounting firm to conduct its first comprehensive financial audit. This move comes in response to rising concerns over the company's lack of full third-party audits, particularly following industry fears of a potential liquidity crisis akin to the one that impacted FTX. According to Tether CEO Paolo Ardoino, the audit is now a "top priority" for the firm.

Aiming for Full Transparency

Tether’s USDT stablecoin maintains its value by claiming to be pegged to the US dollar on a 1:1 ratio. In other words, each USDT token is supposed to be backed by an equivalent amount in reserves, including traditional currencies, cash equivalents, and other assets. However, the company has faced ongoing criticism for not subjecting its reserves to a comprehensive, independent audit—something that would provide much-needed assurance to investors and regulators alike.

Currently, Tether is only required to release quarterly reports but has not undergone a full independent annual audit, which would offer a more thorough level of scrutiny. Ardoino emphasized that this gap in transparency has been a source of concern in the industry, especially after past incidents where doubts were raised about Tether’s reserve backing.

Political Influence and Big Four Firms

In a recent interview with Reuters on March 21, Ardoino indicated that the involvement of a Big Four accounting firm—PricewaterhouseCoopers (PwC), Ernst & Young (EY), Deloitte, or KPMG—is a key goal. He suggested that with pro-crypto US President Donald Trump in office, it would be easier for Tether to secure the necessary backing and attention from major accounting firms.

"If the President of the United States says this is top priority for the US, Big Four auditing firms will have to listen, so we are very happy with that," Ardoino stated. While he did not disclose which of the Big Four firms Tether is engaging, the move signals a significant step toward greater transparency.

Responding to Industry Concerns

The decision to undergo a full audit follows significant concerns within the cryptocurrency industry about Tether’s lack of independent audits. Cyber Capital founder Justin Bons has been vocal about the risks posed by Tether’s opaque operations. In a 2024 statement, he called Tether “one of the biggest existential threats to crypto,” highlighting the lack of evidence to support the claim that the company holds $118 billion in collateral backing its USDT tokens. This concern was compounded by a 2021 ruling from the U.S. Commodity Futures Trading Commission (CFTC), which fined Tether $41 million for misleading claims about the full backing of its reserves.

In addition to this, Consumers’ Research, a consumer protection group, also released a report criticizing Tether’s lack of transparency, adding to the growing pressure for the company to provide more detailed proof of its financial backing.

Tether's Response to Regulatory Challenges

Tether’s push for greater transparency comes at a time when the company is also dealing with regulatory challenges. Earlier this month, Tether expressed disappointment over new regulations in Europe, particularly MiCA (Markets in Crypto-Assets) regulations, which forced exchanges like Crypto.com to delist USDT along with several other tokens in order to comply. A spokesperson for Tether criticized the “rushed actions” that led to these delistings, which they argued were based on unclear and unfounded statements.

Despite these regulatory pressures, Tether is moving forward with its commitment to greater transparency, which will likely be bolstered by the anticipated audit.

Looking Ahead

With Simon McWilliams joining Tether as Chief Financial Officer earlier this year, the company is clearly preparing for a deeper level of financial scrutiny. The anticipated Big Four audit will be a major milestone in addressing long-standing concerns about Tether’s operations and financial backing.

As Tether seeks to engage with one of the world’s top accounting firms, it hopes to reassure both investors and regulators that its USDT stablecoin remains fully backed and secure. Whether or not this audit will fully address the industry’s skepticism remains to be seen, but it represents a positive step toward greater accountability for the company.

Tether’s first full audit could be a game-changer for the stablecoin industry, providing much-needed transparency in an increasingly regulated environment. With the audit process now underway, the cryptocurrency world will be watching closely to see how Tether responds to mounting demands for clarity and trustworthiness.

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