Tether Promised Audit After Wall Street Journal Criticism

Tether issued a statement in response to a Wall Street Journal article from August 27, which stated that the company promised an audit since 2017 but has not delivered it.

– Everyone knows we haven’t had an audit and knows we are working on it – Tether stated on August 30.

In that article, Tether’s CTO Paolo Ardoino did not specify a date by which the company might conduct the audit. Instead, he said that things are progressing slower than expected.

Instead of a full audit, Tether released a financial report signed by BDO Italia, which Tether claims has ‘unlimited access’ to information about the company. They insist that this practice is ‘the most honest and transparent in the market’, but clarified that this report is not an appropriate audit.

On the other hand, the company claims that competing stablecoins falsely asserted that they conducted audits. This claim is supported by the WSJ, which states that Tether and other leading stablecoins only publish mere attestations, while a thorough audit would involve testing transactions before a certain date.

In line with the claims of the Wall Street Journal, Tether acknowledges that the digital asset industry lacks standards for auditing and accounting. 

Other Disputed Claims

Tether has disputed other claims and implications from the Wall Street Journal. The company insists that it is profitable.

The company also addressed the claim that assets exceed liabilities by $191 million, along with the assertion that a 0.3 percent drop in assets would cause technical insolvency.

Tether insisted that the difference in reserves is common across the stablecoin industry and stated that the Wall Street Journal intends to single out Tether and damage its reputation. Tether confirmed that in recent months it has easily redeemed $16 billion of its USDT stablecoins, demonstrating its resilience.

They also added that quarterly treasury records (T-records), which are part of the reserves, represent safe assets.

Finally, the company insists that short selling of USDT is impossible and states that this idea is a result of a false narrative surrounding hedge funds that attempted this action but failed.

The stablecoin issuer did not contest other claims from the Wall Street Journal, such as the claim that it is the only major stablecoin using digital tokens in its reserves. It also did not address the fact that the price of USDT fell to 0.95 dollars during the Terra collapse in May.

Despite being the largest stablecoin by market capitalization, it is often the target of criticism. A recent reminder that a full audit is still not available is likely to justify skeptics.