Tether Hires New Auditor to Publish Monthly Proof of Reserves
Tether, the company behind the largest stablecoin, announced Thursday it has hired BDO Italia as its new accounting firm to take over its asset reserves. The company said it also plans to issue its reserves reports each month rather than each quarter.
BDO Italia to Watch Over Tether’s Asset Reserves
Tether Holdings, the company behind the world’s largest stablecoin Tether (USDT), swapped its accounting firm to BDO Italia to watch over its asset reserves. Moreover, the company also announced it wants to raise the frequency of its reserve reports and publish them each month rather than on a quarterly basis.
“The decision to work with the BDO organization represents [Tether’s] promise to deliver considerable transparency for those holding Tether tokens, providing updates about issued tokens and reserves on a daily basis, supplemented by monthly assurance opinions.”– Tether said.
The move comes as Tether has been scrutinized for a long time over the assets backing its stablecoins. The company has been promising its investors that it will get audited for several years now, though it’s still yet to happen.
Stablecoins are crypto assets meant to maintain a peg to another currency, such as the US dollar. Due to their stability, crypto traders commonly use stablecoins to switch funds between different crypto assets or transform them into cash.
Tether claims its coin maintains its value to the USD by holding dollar-denominated reserves to match or surpass the value of USDT coins in circulation. These reserves have been investigated for an extended period and the scrutiny has tightened following the collapse of the algorithmic stablecoin TerraUSD and LUNA earlier this year.
Last year, Tether paid an $18.5 million fine after reaching an agreement with the New York attorney general’s office, which accused the stablecoin issuer of making public misrepresentations about the dollar reserves behind USDT. The company neither admitted nor denied allegations.
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A Difficult Year For Stablecoins
2022 has so far been a challenging year for all capital markets but particularly crypto. The crash of TerraUSD and LUNA in May sent disturbed the entire crypto industry and is one of the key reasons behind the sell-off.
Tether is also among those affected by the crypto winter, with the stablecoin’s market cap dropping below the $70 billion mark in June for the first time since October 2021. The sell-off also sent the entire crypto market’s cap below the $1 trillion threshold for the first time.
Last month, Tether and Bitfinex partnered with P2P protocol Hypercore to launch a blockchain-based video calling app Keet. The app “utilizes peer-to-peer connections to facilitate real-time audio/video calls, text chat, and file sharing.”
Do you frequently USDT’s reserves would be questioned less by the crypto community after this change? Let us know in the comments below.