Tether partners with top 5 accounting firm BDO for reserve attestations

Stablecoin issuer Tether announced Thursday that it has partnered with BDO Italia, the Italian arm of the world's fifth largest accounting firm, to issue assurance and attestation reports of its reserves.

Tether has previously worked with two Cayman Islands-based accounting firms, Moore Cayman and MHA Cayman. Tether's BDO Italia partnership means it will no longer work with Moore and MHA, the company told The Block. The Block could not immediately reach out to BDO Italia for a comment.

When asked if it approached any of the "Big Four" accounting firms, i.e., Deloitte, Ernst & Young (EY), KPMG and PricewaterhouseCoopers (PwC), Tether said: "We have publicly commented on the fact that no stablecoin has to date been successful in engaging a Big 4 accounting firm."

Tether began working with BDO Italia in July for its quarterly attestations, it said, adding that it plans to move towards monthly attestations. When asked for the timeline, the company said it hopes to issue monthly reports "very soon."

Tether also aims to go through "a complete audit" in the future. "An audit is a priority for us," the company said, adding that it is "committed to obtaining one as quickly as possible."

Launched in 2014, Tether's USDT stablecoin has the largest market share in the world, with its current total supply at over 66 billion, according to The Block's data dashboard. But Tether began providing a breakdown of USDT's reserves only last year, after settling with the New York Attorney General's office with an $18.5 million fine.

Tether's information on its reserves has caused much controversy to date. When USDT launched, Tether claimed each stablecoin was backed 1:1 with US dollars. In March 2019, it updated its website to state that "all Tether tokens are backed 100% by Tether's reserves." It later created a transparency page on its website outlining the company's assets and liabilities measured in three currencies and gold. And last year, when the company started providing quarterly attestation reports, it was criticized for not disclosing specific information about its holdings, such as corporate debt ratings.

Tether had also been criticized for its significant exposure to commercial papers, which may have included Chinese commercial paper. Last month, the company said at that time it was not holding any Chinese commercial paper and that its total commercial paper exposure has been reduced to around $3.7 billion, with plans to reduce it to zero by October or early November.

Tether's rival Circle gets attestation reports from Grant Thornton LLP for its USDC stablecoin. According to its latest attestation report, Circle holds an equal amount of "US dollar denominated assets" for its USDC circulation.