Tether has once again postponed the completion of a comprehensive audit. Yesterday, it was revealed that the full audit date would be pushed out by several months. The crypto market crash this year has justified the legitimate concerns of crypto investors.
More than a five-year time frame
The stablecoin issuer has been promising investors and the public for over five years that it will conduct a full audit of its stablecoin reserves. These new parameters have once again raised new concerns about the crypto industry.
Chief Technology Officer (CTO) Paolo Ardoino, who has also served as the company’s public face for some time, made the announcement of the current delay. According to Paolo, the long-awaited analysis of the USDT’s foundations won’t be ready for a few more months.
As part of a litigation settlement with the New York Attorney General’s (NYAG) office, the company has been required to produce quarterly attestations, however this has not been adequate. Instead, the issuer is checking with lawyers, cops, government agencies, and other businesses to make sure its claims are legit.
Tether recently hired an accounting firm called BDO Italia, which found that the company and its subsidiaries had a combined asset value of $66.4 billion, a liability value of $66.2 billion, and a buffer of $200 million. More than 15% of USDT reserves are held as unsecured obligations through commercial paper, according to Tether’s website.
The commercial paper issued by Tether is rumored to have been cut by 58%, from $20 billion to $8.5 billion, with further cuts planned.
Many organizations would like a more in-depth understanding of the claims and studies that try to reveal the USDT’s backing and what keeps it pegged to the value of the US dollar.
Tether has once again delayed the completion of a complete audit, delaying the arrival of much-needed clarity and confidence.
Inadequate Standards for Recording Digital Assets
USDT is the most valuable stablecoin in terms of market capitalization, at over $67.6 billion. As the company responsible for the largest stablecoin in the cryptocurrency market, Tether Limited plays a pivotal role in the industry. While most people involved in the cryptocurrency business right now are concerned about keeping their money safe, this date change runs counter to the company’s previous statement that it wanted to promote openness.
Due to the lack of clear categorizations, the bitcoin ecosystem and its assets lack the boundary rules found in more traditional financial settings. Some of these regulations mandate that traditional financial institutions disclose public statements or other financial data.
It’s possible that the USDT issuer’s erratic decision-making is due to the lack of stringent standards.
Tether’s (USDC) continued existence is further supported by recent events, including as its endorsement of Ethereum’s (ETH) transition to the proof-of-stake (PoS) consensus method. The issuer encourages investors and other industry participants to keep pursuing it despite providing just minimal information on its reserves in lieu of a complete audit report.
The company, which is registered in the British Virgin Islands, may assert that it has full financial backing, but the proof of the pudding is in the eating, especially in light of the fact that in May of this year it temporarily lost its dollar peg.