Stablecoin issuer Tether is reportedly engaging with a Big Four accounting firm to audit its assets reserves and verify that its USDT (USDT) stablecoin is backed at a 1:1 ratio.
Tether CEO Paolo Ardoino reportedly said the audit process would be more straightforward under pro-crypto US President Donald Trump. It comes after rising industry concerns over a potential FTX-style liquidity crisis for Tether due to its lack of third-party audits.
Tether to produce first full audit after scrutiny
“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 told Reuters on March 21.
“It’s our top priority,” Ardoino said. It was reported that Tether is currently subject to quarterly reports but not a full independent annual audit, which is much more extensive and provides more assurance to investors and regulators.
However, Ardoino did not specify which of the Big Four firms — PricewaterhouseCoopers (PwC), Ernst & Young (EY), Deloitte, or KPMG — he plans to engage.
Tether recorded a profit of $13.7 billion in 2024. Source: Paolo Ardoino
Tether’s USDT maintains its stable value by claiming to be pegged to the US dollar at a 1:1 ratio. This means each USDT token is backed by reserves equivalent to its circulating supply.
These reserves include traditional currency, cash equivalents and other assets.
Earlier this month, Tether hired Simon McWilliams as chief financial officer in preparation for a full financial audit.
Industry concerns over Tether’s lack of audits
In September 2024, Cyber Capital founder Justin Bons was among those in the industry who voiced concerns about Tether’s lack of transparency.
“[Tether is] one of the biggest existential threats to crypto. As we have to trust they hold $118B in collateral without proof! Even after the CFTC fined Tether for lying about their reserves in 2021,” Bons said.
Related: Tether freezes $27M USDT on sanctioned Russian exchange Garantex
Around the same time, Consumers’ Research, a consumer protection group, published a report criticizing Tether for its lack of transparency surrounding its US dollar reserves.
Just three years prior, in 2021, the United States Commodities and Futures Trading Commission (CFTC) fined Tether a $41 million civil monetary penalty for lying about USDT being fully backed by reserves.
Meanwhile, more recently, Tether has voiced disappointment over new European regulations that have forced exchanges like Crypto.com to delist USDT and nine other tokens to comply with MiCA.
“It is disappointing to see the rushed actions brought on by statements which do little to clarify the basis for such moves,” a spokesperson for Tether told Cointelegraph.
Cointelegraph reached out to Tether but did not receive a response by time of publication.
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