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

The British Financial Times reported on Thursday, citing people familiar with the matter, that Tether, the world’s largest stablecoin issuer, has hired KPMG, one of the world’s 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整理 and optimize the company’s internal systems and financial processes, in preparation for the upcoming audit. This is seen as the most concrete and most groundbreaking step toward “financial transparency” since Tether was founded.

Tether CFO Simon McWilliams had earlier said this week that the company has “long been operating according to the audit standards of the Big Four accounting firms,” and vowed that “the final audit report will definitely be delivered to the public on time.” This audit action comes as Tether prepares 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 using a staggering valuation of $500 billion, but many institutional investors were reluctant due to the pricing being excessively high, along with potential regulatory risks. Currently, Tether’s reserve assets are mainly accompanied on a monthly basis by an “attestation report” issued by BDO Italia, the Italian arm of BDO, the world’s fifth-largest accounting firm, which is fundamentally different from a full financial statement audit—one that requires detailed testing of assets, liabilities, internal controls, and reporting systems. Since USDT was launched in 2014, questions about whether it has sufficient U.S. dollar reserves have never stopped. Looking back to 2021, the overseas media outlet CoinDesk previously sought to compel the New York State Attorney General’s office to publicly disclose details of USDT reserves through the Freedom of Information Law (FOIL). At the time, Tether even went as far as fighting the matter in court, but it lost twice. After a legal battle lasting nearly two years, these confidential documents finally surfaced in 2023. The data shows that as of March 2021, of the $40.6 billion in reserves at that time, the vast majority were held at the Deltec bank in The Bahamas, and Tether 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 disclosures sparked market discussions 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 commercial paper exposure.