External Auditor First to Confirm Tether’s USDT Backing
Independent auditor Moore Cayman attested last month that Tether is backed by “cash and cash equivalents” of more than 100% of its liabilities.
Tether Removes Bitcoin Market Risk
According to Moore’s report, Tethers’ assets as of Feb. 28 were worth $35.2 billion while liabilities in digital stablecoin issuance were $35.1 billion.
Tether settled its case against the New York’s Department of Justice for misappropriation of funds and probing into assets backing the stablecoins issued by Tether. The DoJ failed to provide any substantial evidence to back its claims.
The settlement terms require more transparency from the firm with a comprehensive quarterly report and separate reporting to the DoJ.
Before the settlement, there was a prevailing fear among crypto investors about Tether reserves having inadequate liquidity to back the USDT supply. Tether has also launched euro, yuan, and gold-backed stablecoins.
Moore Cayman’s report further eradicates any such fear as USDT attains a similar status quo to U.S. regulated stablecoins by Circle (USDC) and Paxos (PAX).
The language used by the Cayman Island-based accounting firm echoes with USDC and PAX’s attestations by auditors in the past. Grant Thornton attested USDC in July 2019.
Notably, a comprehensive audit report—addressing the composition and risks of the holdings—has not been published by any stablecoin issuer.
Thus, the specific assets held by Tether, Circle, or Paxos are not yet known, except that they are “cash or cash equivalents.”
Presently, the USDT stablecoin supply is $40.8 billion with a 24-hour trading volume of close to $100 million.
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Author: Nivesh Rustgi