Tether, the issuer of the $184 billion USDT stablecoin, has announced its first full audit after signing an agreement with an unnamed Big Four accounting firm. While the company has always processed redemption requests for users converting USDT into U.S. dollars through bank accounts, it has drawn repeated suspicions and accusations that its reserves don’t match up with its stablecoin token supply over the years.
In a company blog post, Tether called the upcoming review the largest inaugural financial audit in the history of financial markets. The effort covers the company’s mix of digital assets, traditional holdings, and tokenized liabilities at a scale comparable to major sovereign institutions. Tether positioned the audit as one element of a wider push to secure trust in USDT through stronger transparency measures, compliance programs, and law enforcement partnerships.
Notably, a report from blockchain analytics company Chainalysis found that 2025 was the biggest year on record for illicit activity in crypto at an estimated $154 billion. Stablecoins have become an increasingly large share of these activities, with their respective slice of the overall pie estimated at 84%. Nation-states such as Iran and Venezuela are said to have used USDT specifically to get around sanctions; however, Tether has also been using its ability to blacklist and freeze tokens to push back on these kinds of transfers.
“For the hundreds of millions of people and businesses who rely on USD₮ every day, this audit is not just a compliance exercise; it is about accountability, resilience, and confidence in the infrastructure they depend on,” said Tether CEO Paolo Ardoino.
Tether currently relies on quarterly attestations from accounting firm BDO. These provide snapshots confirming reserve backing at set dates but do not constitute full financial statement audits. Circle follows the same attestation model for its USDC stablecoin through monthly reports, frequently handled by firms such as Grant Thornton or Deloitte.
As previously chronicled by Protos, Tether has floated audit plans numerous times over the years, with one failed attempt in 2017 after retaining Friedman LLP and another situation that ended with no such report after Tether’s then-General Counsel Stuart Hoegner claimed it was “months away, not years.”
The stablecoin issuer has pointed to hesitation from major accounting firms over reputational exposure and the heavy regulatory spotlight on crypto as the main obstacles to earlier audits.
Redemption of USDT tokens has remained available to users throughout this entire time. In 2018, however, Tether extended a loan to sister exchange Bitfinex to cover roughly $850 million in frozen funds that the exchange could no longer access through a third-party processor. The move left Tether technically insolvent for periods. The New York Attorney General’s office investigated, resulting in a 2021 settlement that required an $18.5 million penalty, a halt to New York operations, and ongoing quarterly transparency filings. The Commodity Futures Trading Commission also imposed a $41 million fine that year after finding Tether had overstated the extent of its U.S. dollar backing.
Cantor Fitzgerald chief Howard Lutnick later confirmed that his firm holds U.S. Treasuries for Tether and that the reserves remain intact. Lutnick has faced criticism for these business links while serving in the Trump administration, which backed the GENIUS Act. The 2025 law set federal requirements for stablecoins to maintain one-to-one backing with Treasuries and positioned custodians such as Cantor to manage those holdings. A recent Bloomberg report also revealed that around the time Lutnick transferred his multibillion-dollar ownership stake in Cantor Fitzgerald to trusts benefiting his four children last October to comply with federal ethics rules, one of those trusts borrowed an undisclosed sum from Tether.
Tether originally simply kept its reserves in cash and short-term dollar equivalents. It later expanded into gold and bitcoin positions and now counts among the largest global holders of physical gold, with roughly 148 tonnes valued at nearly $23 billion. Last year, S&P Global pointed to the company’s increased reliance on bitcoin holdings as a key reason for rating USDT as “weak.” That said, S&P’s rating model may not be fit for a company building on top of a new global monetary system like Bitcoin.
Relatively limited transparency on Tether’s operations has weighed on the broader crypto market for years, as market observers have argued that any major failure at the company could trigger a black swan collapse across the entire industry. Expectations of such trouble ran particularly high during the 2022 deleveraging wave and FTX bankruptcy, yet USDT maintained its peg and market position. Whatever the accuracy of earlier warnings, the arrival of a Big Four audit stands to strengthen confidence in the asset that likely ranks second only to bitcoin in overall importance to crypto. That is, of course, if Tether’s claims all turn out to be true.
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