Key Takeaways
Stablecoin issuer Tether has hired KPMG to conduct a full financial audit of its reserves backing the ~$185 billion USDT token and engaged PwC to prepare its internal systems, a landmark move toward transparency for the industry’s largest stablecoin. The dual appointments come as the firm prepares for expansion in the United States under new federal stablecoin rules.
"Trust is built when institutions are willing to open themselves fully to scrutiny,” Tether CEO Paolo Ardoino said, adding that the audit reflects years of internal preparation to meet the standards of a Big Four accounting firm.
The review by KPMG marks a significant departure from Tether’s previous practice of publishing monthly attestations from accounting firm BDO Italia. While those reports confirmed that Tether’s assets exceeded its liabilities at a specific point in time, a full financial statement audit involves a much deeper review of assets, liabilities, internal controls, and reporting systems. The move coincides with internal changes, as Tether reportedly removed two former HSBC gold traders from its management team while maintaining gold reserves of 140 tons, according to a person familiar with the matter.
This push for greater transparency is critical as Tether navigates a shifting regulatory landscape and seeks fresh capital. The firm has faced persistent questions over the composition and security of its reserves, leading to a $41 million fine from the CFTC in 2021 and an $18.5 million settlement with the New York Attorney General. A successful audit is seen as essential for building investor confidence and operating under the GENIUS Act, the new U.S. framework for stablecoin issuers.
For years, critics have called for a full audit of Tether to verify the assets backing USDT, which functions as a core piece of plumbing for global crypto markets. The company’s previous disclosures, compelled by its settlement with the New York Attorney General, revealed significant exposure to Chinese commercial paper as of March 2021. The engagement of KPMG and PwC signals a structured effort to align with global financial standards and provide a level of verification that goes far beyond its prior reports. The audit is expected to provide a detailed look into how Tether’s reserves, which include over $122 billion in direct U.S. Treasury securities, are managed and structured.
The audit comes as Tether plans to register its flagship USDT token under the GENIUS Act’s regime for foreign stablecoin issuers. The company has already launched a smaller, fully compliant dollar-pegged token, USAT, under the new rules. This regulatory push is happening alongside a revised fundraising strategy. After initially exploring a raise of $15 billion to $20 billion, Tether has reportedly lowered its target to around $5 billion following investor feedback on regulatory and pricing risks. With nearly $10 billion in profit reported last year, the successful completion of a Big Four audit could significantly strengthen its position in both regulatory and capital markets.
This article is for informational purposes only and does not constitute investment advice.
