Tether has reportedly contracted KPMG to conduct its inaugural full audit of the reserves backing its stablecoin, USDT. This engagement also involves PwC, which will assist in preparing Tether’s internal systems, according to a report from the Financial Times.
This decision follows Tether’s announcement earlier this week that it had engaged a Big Four firm for a comprehensive financial statement audit, although the specific firm was not initially disclosed. The move comes after years of promises to provide a thorough review of its financials, during which Tether relied on periodic reserve attestations from BDO Italia, the Italian member of the BDO global accounting network, which has been issuing assurance reports since 2022.
Strategic Timing and Market Context
The audit is particularly timely as Tether is reportedly considering a significant equity raise, potentially amounting to billions of dollars. This initiative aligns with Tether’s ambitions to enter the U.S. market under the new federal stablecoin framework established by the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. Currently, USDT has a market capitalization of approximately $185 billion, making it the largest stablecoin, as noted by CoinGecko.
Scope of the Audit
The KPMG audit is expected to extend beyond mere snapshots of reserves, encompassing a detailed examination of Tether’s assets, liabilities, and internal controls across its extensive balance sheet. Tether has characterized this undertaking as “the biggest ever inaugural audit in the history of financial markets.” The firm was selected through a competitive process, and while Tether asserts that it already meets Big Four audit standards, it has not publicly committed to a timeline for the audit’s completion.
Regulatory Background and Previous Issues
Tether’s push for transparency comes in the wake of previous regulatory challenges. The company faced a $41 million fine from the Commodity Futures Trading Commission (CFTC) for what was deemed “untrue or misleading statements” regarding its reserves. Additionally, Tether reached an $18.5 million settlement with the New York Attorney General over allegations of concealing losses and misleading investors about USDT’s backing. As part of the settlement, Tether is required to provide detailed quarterly reserve reports for two years.
As of now, Cointelegraph has reached out to Tether for further comments but has not received a response. Both KPMG and PwC have declined to comment on the matter.
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