Tether, the industry’s largest stablecoin issuer, is set to hire the Big 4 to audit its reserves, ending longstanding criticisms of the company’s lack of transparency.
Tether CEO Paolo Ardoino said the audit was a top priority for the firm following suspicion raised by the company’s colossal revenue.
Tether has not disclosed which Big 4 firms it works with for the audit.
The stablecoin-issuing company hopes to thoroughly audit its USDT Reserves, following the Trump Administration’s pro-crypto mantra.
Tether’s Longstanding Battle with Transparency
Tether has been heavily criticized for its lack of transparency and for constantly postponing the audit of its reserve.
For many years, Tether has claimed that US dollars back its USDT stablecoin while refusing any forensic audit of its reserve.
The Stablecoin issuing company has been very opaque in its dealings and only started to release quarterly attestation reports in 2021.
Its attestation reports were prepared by accounting firms like BDO Italia, not Full financial audit houses like Deloitte or KPMG.
The attestation reports released by BDO Italia were quite broad, lacking specifics, and provided data on only cash equivalents, commercial paper, and secured loans.
Scandals of misrepresentation have marred Tether’s proof of reserve, causing critics to demand an audit of the company.
In 2019, the New York Attorney General (NYAG) investigated Tether and revealed that it had misrepresented its reserves.
The NYAG found that Tether lent funds to its sister company, Bitfinex, to cover a $850 million shortfall caused by a payment processor issue, undermining claims of full dollar backing.
Tether settled with the NYAG in 2021 for $18.5 million and agreed to regular reporting, but this episode damaged trust.
Tether remains one of the only firms with a massive market cap of over $140 billion yet to complete a comprehensive audit.
Firm attestations help reveal the weaknesses and gaps in a firm’s financial structure.
Tether’s refusal to provide one has led to critics accusing the firm of avoiding scrutiny to hide its weaknesses.
Tether is headquartered in the British Virgin Islands and is regarded as a regulatory grey area.
The opaque financial dealings in the Islands have not helped Tether’s case amongst its critics.
Tether’s Reserve
Tether holds a diversified portfolio comprising Tether Stablecoin, US Treasury Securities, and Bitcoin.
Tether reported $126.9 billion in consolidated assets, exceeding the $119.9 billion in liabilities.
US Treasury Securities: The second most significant component of Tether’s reserve is $113 billion in direct and indirect holdings, which accounts for approximately 89% of the reserves. This reinforces USDT’s reliance on low-risk, liquid assets.
Bitcoin (BTC): Tether holds over 82,000 BTC, valued at roughly $5.5 billion at late 2024 prices.
Gold: Tether holds approximately 48 tons, valued at $3.8 billion, which makes up around 3% of the reserves. This backs Tether’s gold-pegged Stablecoin (XAUT) but is included in the consolidated reserves.
Tether’s reserve makes it one of the most prominent digital assets firms.
Tether’s Revenue
Tether boasts one of the highest revenues in the digital assets space. The Stablecoin issuing company posted a whopping $13 billion in profits for 2024, placing it in the same league with banking giant Goldman Sachs.
The company announced it issued over $23 billion in USDT in the last three months of 2024 and holds over $7 billion in its reserves.
- In Q1 2024, Tether reported a record-breaking net profit of $4.52 billion.
- The net profit was $5.2 billion in the first half of 2024, up $1.3 billion from Q2.
- In Q3 2024, the profit was $2.5 billion.
- For the full year of 2023, Tether reported a net profit of $6.2 billion.
Tether remains the Stablecoin issuing company with the largest market share, followed closely by Circle USDC.
The firm was embroiled in a legal tussle with Europe’s MiCA on regulatory standards earlier this year, with a potential European ban looming.
Paolo Ardoino highlighted the stringent policies imposed on stablecoin-issuing companies and the disparity between these policies and those stipulated for Traditional banks.
He lamented that traditional banks are expected to hold 1% of eligible deposits as reserves with central banks, while stablecoins face much stricter liquidity demands.
At the time of the report, Tether has yet to obtain the electronic money institution (EMI) license.
Tether needs this license to operate legally in the European jurisdiction, and its absence creates uncertainty about the USDT status. Tether’s close rival, Circle USDC, secured this license in July 2024.
The Tether CEO, however, remained unperturbed about this, saying that the company’s primary market lies in Asia and other parts of the world.
Tether’s Diversification Plans
Tether has ramped up its plans to diversify its business portfolio away from Stablecoin issuing to other areas of interest. The firm has moved into various endeavours, investing money in potentially lucrative sectors.
Read Also: Tether Expands Footprint in Africa, Signs MOU with Government of Republic of Guinea
Artificial Intelligence (AI):
Tether has made giant strides in the Artificial intelligence sector, investing $200 million in Blackrock’s Neurotech. Neurotech is a biotech firm developing brain-computer interface tools for Neurological conditions.
Additionally, Tether diversified into AI infrastructure by investing in Northern Data Group, a cloud computing and AI infrastructure provider.
Renewable Energy
Tether is considering going into renewable energy projects that align with its goal of supporting sustainable infrastructure.
The stablecoin-issuing company’s Q4 attestation report reveals sizeable investments in renewable energy as part of its diversification efforts.
Telecommunications
Tether is exploring investment in Anti-censorship communication platforms and infrastructure. The company’s CEO emphasized the promotion of open communication as a goal.
The exact projects remain less detailed, but this sector is part of its long-term vision outlined in the announcements of late 2024.
Education
Established in April 2024, Tether’s Tether Edu division focuses on educational initiatives related to blockchain and digital assets.
This division aims to drive financial literacy and technology adoption through specific programs or investments that have not been widely publicized since early 2025.
Tether’s plans to undergo a forensic audit by the Big Four accounting firms are a welcomed initiative for the crypto industry at a bleak moment. Transparently keeping its books and auditing its reserve strengthens the trust of institutional and retail investors in the industry while setting a positive precedent for other crypto firms of its size.
Tether is the parent company of the USDT stablecoin. It is the most widely used Stablecoin but faces competition from other stablecoins, such as Circle USDC, PayPal’s PYUSD, and Ripple’s RLUSD.
