Tether CEO Initiates Transparency Campaign And Wants Big Four Audit

Tether has consistently faced scrutiny regarding the transparency of its reserves. While the company claims that its USDT token is fully backed on a one-to-one basis by its reserves, it has not yet completed a full audit, leaving lingering doubts.

In an effort to improve the situation, Tether CEO Paolo Ardoino expressed a willingness to pursue an audit by a Big Four firm. Such an audit could significantly address concerns about the financial stability of the company.

Reputational Risk

To enhance its reputation, Tether informed Fox Business that the firm is increasing its collaboration with law enforcement to tackle crypto-related crimes, investing in emerging technologies like AI, and contemplating a Big Four audit for greater transparency.

However, Ardoino noted that finding an accounting firm for a complete audit may prove difficult due to challenging regulatory conditions in the United States. He highlighted specific rules that complicate the ability of audit firms to work with crypto companies, particularly those based outside the U.S.

Despite these challenges, Ardoino remains optimistic that the regulatory environment might improve after the upcoming presidential election, which could reduce restrictions and make a full audit more attainable. Still, CPA Blake Oliver remarked that none of the Big Four accounting firms are willing to take on Tether for an audit, citing concerns about reputational risks.

More Than Meets The Eye

This drive for transparency emerged after a 2021 investigation by the New York Attorney General (NYAG), which revealed that assertions made by Tether concerning a dollar-for-dollar backing were in fact misleading. The inquiry uncovered that Tether had been moving funds between its parent company, Bitfinex, to cover losses and mixing user funds.

Since then, Tether has utilized accounting firm BDO for quarterly attestations, with the most recent report indicating a surplus of $11.893 billion in assets compared to liabilities. While the quarterly attestations represent a positive step, it is essential to recognize that these attestations are limited, offering only snapshot reviews of specific financial aspects, such as reserves, rather than a comprehensive assessment of all financial records. In contrast, audits provide a thorough evaluation which delivers greater assurance to both investors and regulators.