- Tether released an assurance report accompanied by an opinion from accounting firm Moore Cayman to verify that its stablecoins are fully backed.
- The stablecoin issuer will release attestation reports regularly in the future.
- Periodic reporting was required as part of Tether’s settlement with the New York Attorney General’s office.
The company behind the world’s largest stablecoin Tether (USDT), Tether Holdings Limited, has recently released a report to confirm that its tokens are backed by its US dollar reserves.
Tether to provide quarterly attestation reports
Tether recently shared a statement to provide the company’s Consolidated Reserves Report, along with an assurance report from accounting firm Moore Cayman. The stablecoin issuer attested that it had $35 billion in assets to back its USDT tokens last month.
Moore Cayman’s document showed evidence that Tether had $35.28 billion in total assets against total liabilities of $35.15 million, meaning that the firm had more reserves than tokens issued. The accounting firm’s report stated:
In our opinion, the CRR as prepared by the management of Tether Holdings Limited Group as of February 2021 at 11:59 PM UTC is presented in accordance with criteria set out therein and it, in all material respects, fairly stated.
Tether Holdings explained that the stablecoin has always been fully backed, and the firm is committed to being among the most transparent stablecoins.
The stablecoin firm has been long questioned about its reserves and whether the price of Bitcoin and other cryptocurrencies were inflated. Stuart Hoegner, the general counsel for Tether and Bitfinex, said Tether aims to counter any future claims of this by releasing attestations periodically in the future.
However, Tether’s report failed to mention where and how its reserves are held, which were concerns raised in the past by Tether critics. In contrast, monthly attestation reports of USDT rival USD Coin — backed by Centre Consortium, Circle and Coinbase — mention that US dollar collateral is held in custody accounts.
Tether paid an $18.5 million fine in February
Tether and Bitfinex settled on the landmark case against the stablecoin company with the New York Attorney General’s office in February. The authorities claimed that Tether misrepresented the degree to which USDT coins were backed by collateral.
The New York attorney general’s lawsuit against the two companies was based on the understanding that USDT was not fully backed by fiat collateral at certain times.
On top of paying $18.5 million for damages to the state of New York, Tether was required to submit periodic reporting of their reserves and transactions between the stablecoin issuer and crypto exchange Bitfinex.
For the next two years, reports will need to be submitted on the firm’s fiat and non-cash reserves, and the two companies would need to stop servicing customers in New York.
Tether was pleased to have settled for a fine of $18.5 million, considering all existing USDT exceed $35 billion. The firm further admitted no wrongdoing.
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