Key Insights:
- Tether engages KPMG to conduct a full review of assets and liabilities, as well as non-reserve controls.
- The audit is consistent with expansion plans and new regulations in the US under the GENIUS Act framework.
- Historical regulatory cases continue to shape the investigation, as reserve data remains the focus of examination.
Tether audit efforts have entered a new phase after the issuer of USDT engaged KPMG to conduct a comprehensive financial statement audit of the stablecoin business tied to the world’s largest dollar-pegged token. The move follows a Financial Times report stating that Tether hired KPMG, after earlier in the week saying it had retained a Big Four accounting firm for the first time to perform a full audit.
Tether Audit Broadens Review of USDT Operations
The Tether audit is expected to extend beyond the reserve snapshots that have shaped much of the company’s public reporting in the past. A full financial statement audit would cover assets, liabilities, and internal controls across the company’s balance sheet rather than focusing only on reserve positions at a given point in time.
Tether has described the exercise as an inaugural audit of exceptional scale and said it would examine the structure supporting USDT across a broad financial base. Tether said the Big Four firm was chosen through a competitive process. It also stated that it already operates at Big Four audit standards. The company has not publicly committed to a timeline for completing the audit.
PwC’s involvement adds another layer to the process. According to the Financial Times, PwC has been engaged to help prepare Tether’s internal systems ahead of the KPMG review. That step comes as the company seeks to establish the reporting and control environment required for a full-scale audit.
U.S. Expansion and Fundraising Form Part of the Backdrop
The audit push comes at a time when Tether is pursuing a broader U.S. strategy. The company is moving under the new federal stablecoin framework created by the GENIUS Act, which sets requirements for stablecoin issuers, including anti-money laundering measures and reserve audits for foreign issuers seeking to operate within that regime.
Last year, Tether CEO Paolo Ardoino said the company intended to register USDT under the GENIUS Act framework for foreign stablecoin issuers. That plan placed the company on a path toward tighter scrutiny as it sought access to the U.S. market.
The audit effort also arrives as Tether considers a major equity raise. The Financial Times reported that the company has encountered investor hesitation in its fundraising discussions. The engagement of KPMG and PwC comes as that process unfolds and as the company attempts to strengthen its position ahead of further expansion.
Reserve Data Remains Central to the Tether Audit
USDT remains the largest stablecoin by market capitalisation, with approximately $184-$185 billion in circulation, according to the figures provided. CoinGecko estimates the token’s circulation at about $185 billion, reinforcing its lead in the stablecoin market.
In January, Tether said it held more than $122 billion in direct U.S. Treasury securities. It also reported total Treasury exposure of about $141 billion, including related instruments such as overnight reverse repurchase agreements.
Separately, the company said it held around $192 billion in reserve assets to back USDT, with the majority of those reserves reportedly in U.S. Treasuries.
Previous Regulatory Cases still dominate Scrutiny.
The audit is a major milestone for Tether, which has been under regulatory scrutiny regarding reserve transparency for years. In 2021, the Commodity Futures Trading Commission imposed a fine of $ 41 million on Tether, claiming that it had made misleading statements about the reserves backing USDT. The case focused on representations about the backing of the stablecoin.
In a separate matter, Tether agreed to an $18.5 million settlement with the New York Attorney General over allegations that it concealed losses and misled investors about USDT’s backing. Under that agreement, the company was required to provide detailed quarterly reserve reports for two years. It later dropped its opposition to the release of those materials.
