Auditing Tether and widespread USDT adoption: Paulo Ardoino says Big Four accounting firms avoid them
The CEO of USDT-issuer Tether, Paulo Ardoino, said the Big Four accounting firms avoid auditing them due to reputational risk. Previously, there were still major accounting firms like BDO signing off on Tether’s reserves report.
Tether, valued at $108bn, uses quarterly attestations and is looking for audits for greater transparency. Recently, it announced it would be restructuring itself, creating four distinct business divisions:
- Tether Data: Strategic Investments in Technology Division
- Tether Finance: Digital Asset Services Division
- Tether Power: Sustainable Bitcoin Mining and Energy Division
- Tether Edu: Digital Education and Advancement Transformation Division
There have been many concerns regarding Tether’s USDT, with US Treasury Undersecretary Wally Adeyamo pointing out that Russia was using stablecoins like Tether as alternative payment methods to bypass sanctions and fund military activities.
New York’s Attorney General previously revealed Tether once held securities issued by Chinese companies among its USDT stablecoin-backing reserves.
Despite this, Tether has shown cooperation with US authorities in the past, like helping recover $1.4mn in USDT suspected from a customer support scam. It also cooperated with the DOJ in freezing $225 million USDT linked to an international human trafficking group.
On Oct 2023, Tether said they cooperated with 31 agencies across 19 countries, freezing $835mn in assets.
Tether has received both support and pushback outside the US. Here are some examples.
- Tether signed a memorandum of understanding with Uzbekistan to help develop a regulatory framework for crypto assets.
- Lugano, a Swiss city, announced they were accepting USDT and Bitcoin as means of payment for taxes and services. Even its local McDonald’s started accepting BTC and USDT.
- Due to Lebanon’s hyperinflation, it was also reported that locals were using Telegram to trade USDT.
- It has also faced pushback in other countries, like China, where they declared using USDT for trading Chinese yuan with other flat currencies as illegal.
- Through SmartPay, Tether launched its tokens in over 24,000 ATMs across Brazil.
Tether was also attacked by the media, with major news outlet The Wall Street Journal facing a defamation lawsuit over its article about Tether and Bitfinex in 2023.
In 2022, Tether condemned rumors saying its commercial paper portfolio was 85% backed by Chinese or Asian commercial papers and was traded at a 30% discount.
In 2023, Tether reported a net profit of $6.2bn with only 100 employees. In comparison, it was close to 78% of the 49,000-employee Goldman Sachs’ profits and close to 72% of the 82,000-employee Morgan Stanley’s profits.
In a recent ESMA analysis, Tether was said to account for 70% of stablecoin market capitalization and 90% of volumes. Research also showed USDT to have the least deviation from the $1 standard, with TUSD fluctuating the most.
Tether also plans to ramp up its efforts in AI and has investments in Bitcoin mining, previously saying they would expand its business into infrastructure and energy production.
Get the latest and biggest crypto news about how Bitcoin, blockchain, DeFi, and Web3 are shaping our world. Join us now!
