Major stablecoin issuer Tether has refuted claims made in an earlier story by the Wall Street Journal (WSJ), stating that the publication discredited the company’s transparency efforts and questioned Tether’s profitability.
The USDT issuer is no stranger to controversy, especially regarding questions surrounding its reserves. So far, the company has reduced its exposure to commercial paper holdings by 58%.
Tether Planning to Release an Audit Soon
In a statement released on Tuesday (August 30, 2022), Tether said that the WSJ made several “unsubstantiated conclusions” that the stablecoin issuer needed to clarify.
The Wall Street Journal, on August 27, published an article noting that Tether is yet to give an audit, expected since 2017. According to the publication, the stablecoin issuer continues to publish an attestation which reveals a snapshot of its reserves and liabilities, signed off by its accounting firm.”
While Tether said that the company was working towards providing an audit, it insisted that its dealings have been transparent.
As previously reported by CryptoPotato, the stablecoin issuer hired a new Italian accounting firm BDO Italia, to replace MHA Cayman.
Also, Tether announced that the publication of the firm’s attestation reports for USDT reserves will happen monthly instead of quarterly.
Furthermore, the stablecoin issuer clarified that BDO is a reputable and independent top 5 audit firm and not a “Tether accounting firm,” as claimed in the WSJ report.
Tether’s response to WSJ also claimed that its three months’ worth of Treasury Bills is a safe bet, as it has been the premier safe asset for decades.
Stablecoin Giant on the Brink of Insolvency?
An attestation by BDO on August 25 showed that Tether’s reported assets of $67.7 million outweighed liabilities of $67.5 billion, thereby presenting a difference of just $191 million.
Meanwhile, the WSJ report noted a mere 0.3% drop in assets could “render Tether technically insolvent—a development that skeptics warn could reduce investor confidence and spur an increase in redemptions.”
However, Tether responded to the claim by stating that such margins were also found in other stablecoins in the market, noting that the publication singled out the stablecoin issuer to dent its reputation.
The firm also said that it redeemed $16 billion of USDT in recent months with ease. Meanwhile, Paolo Ardoino, Tether’s CTO, said that the company is expecting significant growth in its capital cushions over the next few months.
Tether further claimed to be profitable, saying:
“To assume that our business is unprofitable is false. According to our Consolidated Reserves Report, Tether has never disclosed any equity despite being profitable for several years. This same report has been deemed appropriate by important stakeholders and it has been accepted by the NYAG. Perhaps the WSJ has confused Tether with some of its competitors.”