Tether has hired Big Four accounting firm KPMG to conduct its first comprehensive audit of the $184 billion USDT stablecoin reserves, while engaging PwC to prepare internal systems for the process. The move represents a major shift for the El Salvador-based company, which has long faced scrutiny over reserve transparency and was fined $41 million by the CFTC in 2021 for misleading statements. Tether claims to hold $192 billion in reserves, primarily in U.S. Treasuries, and is pursuing regulatory approval under the GENIUS Act to expand into the U.S. market while seeking a multibillion-dollar equity raise.
KPMG Audit Engagement and Scope
- ▪KPMG is one of the Big Four accounting firms, which are the world's largest auditors
- ▪The KPMG engagement represents the first time Tether has engaged a Big Four accounting firm to conduct a full financial statement audit
- ▪USDT is the world's largest stablecoin with approximately $184 billion in circulation
Tether's Transparency Challenges and Regulatory History
- ▪Tether was hit with a $41 million fine by the CFTC in 2021 over misleading statements relating to USDT
- ▪Tether has long sought an audit of its reserves by one of the Big Four accounting firms
- ▪Tether claims to hold some $192 billion in reserve assets to back the value of USDT
U.S. Market Expansion and GENIUS Act Compliance
- ▪Tether issued USAT in January as a fully-regulated and GENIUS-Act compliant dollar-pegged stablecoin
- ▪USAT has a circulating supply of just $28 million
Perspective of Cryptocurrency industry observers
- ▪Tether's decision to hire KPMG marks a reversal from its historical reluctance to undergo full Big Four audits
Perspective of Potential Tether investors
- ▪Investors require verification of Tether's claimed $192 billion in reserves before committing to an equity investment
Perspective of U.S. regulators
- ▪U.S. regulators consider Tether's 2021 CFTC fine as evidence of past deficiencies in reserve transparency and disclosure
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