Does USDT have sufficient reserves? Tether reportedly hired KPMG for a comprehensive audit.

The UK’s Financial Times, citing sources on Thursday, reported that Tether, the world’s largest stablecoin issuer, has hired KPMG—one of the Big Four accounting firms—to conduct a comprehensive financial audit of its USDT, which has a market capitalization of $185 billion. At the same time, Tether has also retained another Big Four accounting firm, PwC, to help organize and optimize the company’s internal systems and financial processes, in preparation for the upcoming audit work. This is viewed as the most substantive and most groundbreaking step toward “financial transparency” since Tether was founded. Earlier this week, Tether CFO Simon McWilliams said the company “has long been operating in accordance with the auditing standards of the Big Four accounting firms,” and pledged that “the final audit report will definitely be delivered to the public on time.” This audit initiative comes as Tether is preparing to enter the U.S. market and launches a new round of fundraising. The Financial Times previously reported that Tether had sought to raise $15 billion to $20 billion in the market at an eye-popping valuation of $500 billion, but many institutional investors backed off due to the excessively high pricing, along with potential regulatory risks. Currently, Tether’s reserve assets are primarily supported by “attestation reports” issued monthly by BDO Italia, the Italian arm of BDO, the world’s fifth-largest accounting firm. This is fundamentally different from a full financial statement audit, which requires detailed examination of assets, liabilities, internal controls, and reporting systems. Since launching in 2014, questions from outside about whether USDT has adequate dollar reserves have never stopped. Looking back to 2021, the outlet CoinDesk reported that it sought to obtain the USDT reserve details through the Freedom of Information Law (FOIL) from the New York State Attorney General’s office. At the time, Tether even went to court over it, but lost twice. After a legal battle that lasted for two years, these confidential documents were finally made public in 2023. The data showed that as of March 2021, of Tether’s then $40.6 billion reserves, the vast majority was held at the Bahamas-based Deltec bank, and it also held large amounts of commercial paper issued by Chinese and international banks, including Agricultural Bank of China, Bank of China (Hong Kong), and Industrial and Commercial Bank of China. These revelations sparked market discussion about liquidity and credit risk. However, in recent years, Tether’s asset allocation has gradually shifted toward short-term U.S. Treasuries and reduced its holdings of commercial paper.