Tether, the dominant issuer of USDT, is undertaking a strategic maneuver with a comprehensive financial audit by KPMG. This initiative reinforced by PwC’s engagement to prepare internal systems from its historical reliance on periodic reserve attestations. The shift is not merely an incremental step but a direct response to an evolving regulatory landscape, particularly within the United States, and an ambitious plan for market expansion and substantial fundraising.
The Evolution of Transparency: From Attestations to Full Audit
For years, Tether’s financial disclosures have been a recurring point of contention. Its prior practice involved reserve attestations, primarily conducted by BDO Italia. While these reports offered snapshots of reserve balances at specific moments, they inherently lacked the depth and scope of a full financial audit. An attestation confirms a state; an audit scrutinizes processes, controls, and the underlying financial health of an entity over a period.
The engagement of a Big Four firm like KPMG for a full audit signifies a material change in Tether’s approach to transparency. Such an audit extends beyond mere asset verification. It encompasses a meticulous review of the entire balance sheet—assets and liabilities—along with an examination of internal controls, financial reporting systems, and operational accounting processes. This scope is critical for establishing genuine financial credibility, which Tether has frequently been accused of lacking. The company’s own description of this endeavor as “the biggest ever inaugural audit in the history of financial markets” underscores its perceived magnitude, yet the absence of a completion timeline remains a notable detail.
The GENIUS Act and US Market Entry
Tether’s push for an audit coincided with changes in U.S. law. The GENIUS Act, officially the Guiding and Establishing National Innovation for US Stablecoins Act, became law in July 2025. This act significantly altered the landscape for stablecoin issuers in the United States. It established a federal framework, aiming to bolster both consumer protection and financial stability.
The GENIUS Act imposes a set of demanding obligations on stablecoin issuers. They must, for instance, maintain a 1:1 reserve ratio, using only approved assets to back their coins. Monthly reserve reports, verified by independent firms, are also a requirement. Large issuers such as Tether face the additional burden of producing annual audited financial statements. Moreover, adherence to anti-money laundering regulations, as outlined in the Bank Secrecy Act, is mandatory.
Following these government control rules is not an option for a firm with about $185 billion in USDT in circulation, which is crucial to do business in the US market. Tether recently launched USAT, a stablecoin that complies with the GENIUS Act, through Anchorage Digital Bank in January 2026. This clearly reflects a shift in Tether’s strategy toward regulatory alignment, putting it in direct competition with other controlled stablecoin providers.
Financial Strength, Ambitious Valuation, and Lingering Shadows
Tether’s financial statements suggest a solid reserve position. Totaling approximately $193 billion, while liabilities stand at $186.5 billion. Which resulting in a surplus reserve of over $6 billion. About 82% of the reserves are allocated to short-term US Treasury bills, showing a strong mix for ensuring stability. This reserve strategy is crucial for USDT’s reputation, especially when it comes to getting more institutional investors and established financial institutions to invest.
Tether may raise $15 billion to $20 billion in stock, with a valuation of up to $500 billion, while pushing for audit-driven openness. While company leadership has tempered specific figures, they have consistently linked any such valuation to Tether’s profitability and market dominance. A successful, clean audit from KPMG would undoubtedly serve as a critical catalyst for these fundraising aspirations, potentially unlocking institutional capital that has, to date, remained cautious due to transparency concerns.
However, the path to unblemished trust is not without historical impediments. Tether’s past legal entanglements continue to cast a shadow. The company previously incurred a $41 million fine from the Commodity Futures Trading Commission for misleading statements regarding its reserves. Furthermore, an $18.5 million settlement with the New York Attorney General addressed allegations of misrepresenting USDT backing and concealing losses.
