Market Times:


New York:


Tether CEO Reveals Why Big Four Auditors Are Afraid to Audit the Firm’s $109B Reserves

Paolo Ardoino explains that the Big Four auditing firms are scared of staining their reputation by auditing the biggest stablecoin project.

Despite its massive growth over the past decade, the largest stablecoin issuer Tether has yet to provide audits of its billions-worth reserves. In a recent interview, Tether CEO Paolo Ardoino revealed the reason for this and explained how the stablecoin issuer hope to remedy the situation.

Why Auditing Firms Are Running from Tether

The Tether boss explained that the stablecoin issuer seeks to employ the services of one of the Big Four auditing companies. These companies are Deloitte, Ernest & Young (EY), PricewaterhouseCoopers (PwC), and Klynveld Peat Marwick Goerdeler (KPMG), ranked by order of revenue.

These accounting companies offer auditing services mostly to financial institutions like banks. Firms endorsed by any of these auditing giants often have investors’ trust. For this reason, Tether seeks to have one of them serve as its auditor. According to the Tether CEO, this choice is a “top priority.”

However, there is a bottleneck challenge. These auditing firms refrain from working with Tether because of the pessimism created around companies focused on offering blockchain-based products.

After the dramatic crash of crypto platforms like Three Arrows Capital, Celsius Capital, and FTX, several auditing companies have withheld from working with crypto-focused projects. For example, the international auditing firm Mazars stopped offering accounting services to the crypto exchange Binance in December 2022. This was a few weeks after FTX’s debacle. Other auditing firms took a similar step.

The matter was further exacerbated when Circle, another stablecoin issuer, disclosed that $3.3 billion was stuck in the bankrupt traditional banking institute Silicon Valley Bank (SVB). The issue caused Circle’s USDC stablecoin to depeg from its $1 mark. The U.S. Congress did not speak well of the stablecoin company, labelling its auditing system as “sham audits.”

Despite these hurdles, Ardoino reiterated:

“We are trying to make the case. We’re trying to build relationships to get the audit from a Big Four firm”

Tether Relies on Attestations

Since 2022, Tether has begun releasing quarterly attestations to promote transparency. These are conducted by the Italian auditing firm BDO Italia. However, audits are believed to have more depth than attestations. Hence, why Tether is working towards winning the attention of one of the Big Four.

Mishael Nwani

Mishael Nwani is an avid crypto enthusiast with nearly four years of experience in the industry. Since 2022, he has covered topics across cryptocurrencies, NFTs, artificial intelligence, and financial markets.