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Ah, Tether—the most popular stablecoin, pegged to the U.S. Dollar and backed by cold, hard cash. Among other assets, as it was eventually forced to admit.
Now, Tether Limited has announced that it's hired BDO Italia as its new accounting firm, with a brief to produce monthly attestation reports for its stablecoin UST’s reserves.
Tether and Bitfinex CTO Paulo Ardoino tweeted out a meme with the news.
“Tether attestations will be completed by BDO Italia, part of BDO global, top 5 accounting firm. First one tomorrow,” Ardoino wrote.
Ahem... And now what?#tether attestations will be completed by BDO Italia, part of BDO global, top 5 accounting firm. First one tomorrow.
Next step: monthly attestations. https://t.co/eLci2x0siN pic.twitter.com/uGsq2Hpu4r— Paolo Ardoino 🕳🥊 (@paoloardoino) August 18, 2022
According to Tether’s most recent report issued back in March, it holds about 86% of its reserves in cash and short-term deposits, 4.5% in corporate bonds, 3.8% in secured loans, and 6% in “other investments” which it notes includes “digital tokens.”
Balancing Tether's books
Why does this accounting ramp-up matter? Well, Tether’s reserves have been called into question before. With a massive $67.5 billion market cap that’s grown exponentially since its inception in 2014, Tether has a lot to lose if its books aren’t balanced.
With its new accountants in tow, Tether’s move from quarterly to monthly reports could help increase retail investor trust and improve its relationships with regulators as well.
Last year, Tether and its parent company Bitfinex paid a $18.5 million fine when an investigation by the New York Attorney General’s office found that Tether’s promise that its stablecoin was fully backed by U.S. Dollars was “a lie.”
As Tether makes efforts to improve transparency, wags took to Twitter to point out that it’s odd the company is emphasizing its new ties to a “top five” accounting firm, when in the accounting world, the largest firms are referred to as the “big four.”
When you know that the accounting giants are known as the “big four” it’s quite funny to see Tether showing off about working with a “top five accounting firm” https://t.co/sz50DGTFDI
— alex hern (@alexhern) August 18, 2022
Others, like Skylands Capital hedge fund trader Tom Hearden, argued that an audit—not attestations—is what the people want.
“You misspelled audit again.”