Tether, the issuer of the world’s largest stablecoin, is seeking a full audit of its reserves from a Big Four accounting firm, signaling a shift after years of criticism over its lack of financial transparency.
The move comes amid heightened scrutiny from regulators and market participants concerned about the stability of the $136.8 billion USDT token, which dominates 66.3% of the $205.48 billion stablecoin market.
Chief Executive Paolo Ardoino said the company is prioritizing an independent audit and is already in talks with one of the four leading global firms — PwC, EY, Deloitte, or KPMG — though he did not name which. “It’s our top priority,” Ardoino told Reuters.
“Now we are living in a landscape where it’s actually feasible.”
Ardoino attributed the shift in feasibility to a more favorable political environment under President Donald Trump. Trump has pledged to be a “crypto president” and signed an executive order supporting a national cryptocurrency reserve.
“If the President of the United States says this is top priority for the U.S., Big Four auditing firms will have to listen,”
Ardoino said.
Mounting Regulatory Pressure
Tether’s reserves are subject to quarterly attestation reports, but these fall short of the full independent audit that investors and regulators have long demanded.
In 2021, the U.S. Commodity Futures Trading Commission fined Tether $41 million for falsely claiming its tokens were fully backed. More recently, the U.S. Financial Stability Oversight Council (FSOC) warned that stablecoins remain “acutely vulnerable to runs” without strong risk management standards.
In its 2024 report, the FSOC noted that one firm — implicitly Tether — holds 70% of the stablecoin market’s value. “Its failure could disrupt the crypto-asset market and create knock-on effects for the traditional financial system,” the Council stated.
Tether said it purchased more than $33.1 billion in U.S. Treasury bills in 2024, becoming the seventh-largest holder of U.S. government debt. As of December 31, its holdings included over $94 billion in Treasury bills and $108 million in cash and bank deposits. The firm said 99% of its Treasury holdings are held with Cantor Fitzgerald, whose former CEO Howard Lutnick now serves as Commerce Secretary under Trump.
Critics Demand Proof
In September 2024, Cyber Capital founder Justin Bons described Tether as “one of the biggest existential threats to crypto,” citing its lack of proof for the $118 billion it claims to hold in collateral. “[We] have to trust they hold [these assets] without proof,” he said.
Consumers’ Research issued a report criticizing Tether’s opacity that same month. In response, Tether appointed Simon McWilliams as chief financial officer to prepare for a full audit.
Tether has also resisted new European regulations requiring that 60% of reserve assets be held in EU banks. Ardoino warned that such a requirement could introduce systemic risks, as banks can lend out up to 90% of their reserves.
