HomeCryptoStable CoinTether ready for new audit with 12 companies

Tether ready for new audit with 12 companies

Tether CTO Paolo Ardoino announced that a series of audits is being prepared with a number of major specialized companies. Are new clouds gathering over the largest stablecoin on the market? 

Tether prepares for several audits

In a tweet, the Tether company announced its intention to conduct a round of consultations with some of the most important consulting firms in the coming days. Somebody clearly immediately speculated that the recent market crashes and the collapse of Terra’s stablecoin, may have also put Tether in difficulty, and that it is trying to make amends.

On the other hand, in just one week, the stablecoin faced record withdrawals of its currency amounting to $10 billion, about 12% of Tether’s entire circulation. This is one of the largest withdrawals of money in history, second only perhaps to the $16 billion withdrawal suffered by Washington Mutual Bank, which caused its bankruptcy in 2008.

On 12 May, Tether lost its peg with the dollar for a few hours, slipping to $0.95, triggering panic in the markets, only to regain parity at the end of the day.

Ardoino in an interview with Euro money magazine, said: 

“We were put a stress test that not even bank can succeed, and we passed with flying colours”.

In fact, according to the CTO, the stablecoin is being speculated on by bearish speculators, which for now seems to have been repelled.

He continued:

“We showed that in the worst-case scenario – when there was Terra crumbling, the entire crypto market crumbling, and the stock market was going down – we got a tonne of requests of withdrawals, and we honoured them within minutes”.

Doubts about Tether’s cash reserves

The issue on which clouds continue to gather over the world’s most important stablecoin by capitalization, after Bitcoin and Ethereum, is still that of the size of Tether’s cash reserves. The next scheduled audits are said to focus on this matter.

Ardoino, who has been trying to provide reassurance of the soundness of the company’s reserves for some time, said that Tether has reduced its holdings of commercial paper, most of which are highly rated, from $40 billion to $15 billion over the past eight months. In addition, there has been a greater shift in reserves towards securities with maturities between zero and three months.

According to some, these audits also serve to broaden the list of banks with which Tether works, who are reportedly concerned by rumours and investigations by regulators into the company, which is often accused of providing poor or incomplete financial information.

The manager added:

“We wish that regulators would provide clarity on what is owed to be disclosed. If we disclose a [hypothetical] 10, it’s unfair that other stablecoins disclose a five”.

Vincenzo Cacioppoli
Vincenzo Cacioppoli
Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.
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