Tether announced that it is changing its auditing firm regarding the publication of its USDT reserves. In the interest of transparency, the company announces that it will now publish monthly audits instead of quarterly ones. This announcement comes after it recently announced a drastic reduction in its commercial paper exposure.
Tether shows more transparency
Tether, the issuer of USDT, the most capitalized stablecoin in the cryptocurrency market, today announced a partnership with BDO Italia regarding the publication of its reserve reports.
BDO Italia is the Italian arm of BDO, the world’s 5th largest auditing firm behind the Big Four group of Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers (PwC).
Tether says it will now publish monthly audits of its reserves via BDO Italia for the sake of transparency, rather than quarterly audits as has been the case until now. The company is thus ending its collaboration with MHA Cayman, the audit firm that was previously in charge of this role.
Paolo Ardoino, Tether’s CTO, said the company wanted to adapt to new market trends in this way:
“We are committed to serving the growing cryptocurrency market as the strongest stable asset in the Web 3.0 economy. Tether’s usefulness has gone beyond being a tool for quickly entering and exiting trading positions, so it’s essential for us to evolve alongside the peer-to-peer and payments markets.”
Tether’s reserves under scrutiny
Tether had been forced to publish quarterly audits of its reserves following an agreement reached with the New York Attorney General in 2021 when it was revealed that the company had lied about the status of its reserves.
In October 2021, the company was fined $42.5 million alongside Bitfinex by the CFTC. It was then revealed that USDT had only been insured for 27% over a period of 26 months.
Regularly criticized on the management of its reserves, Tether issued a statement dated July 27, 2022 announcing that its commercial paper exposure had been significantly reduced from $30 billion to $3.7 billion. This was to be reduced to $200 million by the end of August before being completely eliminated by November at the latest.
In order to qualify for regulation in as many countries as possible, companies like Tether and Circle (the issuer of the USDC) need to be as transparent as possible about their reserves.
Indeed, since stablecoins are backed by real value, the companies offering them need to be able to continuously back 100% of the stablecoins issued in the market.
