- The company that supports the stablecoin said that the publication is trying to discredit the work of its team and that of the accounting firm BDO with false information.
- It assured the public that it is being honest with its users and will continue to share its financial certifications, although it admitted delays regarding audits.
- The Wall Street Journal article states that “Tether needs an audit akin to a corporate colonoscopy” on the status of its reserves.
Tether, the company behind the world’s largest stablecoin, has responded harshly to comments in an article published by The Wall Street Journal this week, in which the WSJ accuses the company of not doing real audits on its financial and accounting situation.
The Tether Holdings Ltd. team accused the WSJ of misinforming the public and discrediting its work in front of its users through a press release published on its blog. “BDO, a very reputable and independent Top 5 audit firm, and is not a ‘Tether accounting firm,’ as erroneously written by the WSJ.”
It further said that the Italian accounting firm "will continue to have unrestricted access to any relevant information to perform their work." It added that “Tether will continue to share its attestations, despite continuous attempts by the media to disparage its reputation and that of top-ranking firms like BDO that are working with digital asset companies.”
The discord article published on August 27 quotes former head of internet compliance at the Securities and Exchange Commission, John Reed Stark, who stated, “Tether needs an audit akin to a corporate colonoscopy that tells investors everything about what’s in their reserves.”
Authors of the article, Jean Eaglesham and Vicky Ge Huang, question the fact that “instead of a full audit, Tether, like other leading stablecoins, publishes a “certificate” showing a snapshot of its reserves and liabilities, signed by its auditing firm.”
Tether defended itself by saying that the Treasuries backing its balance sheet are not unsafe assets. It mentioned that it is false that its business “is unprofitable,” as the publication suggests and pointed out that “perhaps the WSJ has confused Tether with some of its competitors.”
On the Flipside
- The company, which has been promising an audit since 2017, according to the WSJ, assures that “Tether’s disclosures have been the most honest and transparent in the market – everyone knows that we have not had an audit and they know we are working towards one.”
Tether said that “rivals have allowed mainstream consumers to believe they are ‘safer’ because they have been ‘audited,’ but no such audit has occurred.”
The statement also mentions that “any reference to a margin of failure existing in Tether’s business model assumes that the WSJ subscribes to the false short-seller narrative which suggests that short-selling Tether is even remotely possible.”
For some time now, Tether has exposed a conspiracy against it. In its response to the WSJ, the company also referred to the hedge funds that it accuses of creating pressure to “harm” the liquidity of the cryptocurrency. It said they represented “a fundamental misunderstanding of both the cryptocurrency market and Tether.”
Finally, Tether highlighted having been able to “easily redeem over USD 16B of the issued token in recent months.” It says it has kept the asset allocation in line with previous months and significantly reduced its exposure to commercial paper.
Why You Should Care
- Questions about Tether’s business model will continue until the company decides to conduct a full audit of its assets and balance sheets, including profit and loss statements.
Tether plans to issue monthly financial reports starting next year, something its competitors are already doing, according to the WSJ article.
“Things are moving slower than … we would like,” the WSJ article concludes, citing Paolo Ardoino, CTO of Tether Holdings Ltd.
You might also like to read this other recent article related to the financial situation of the stablecoin:
Tether (USDT) Reserves Fell $16 Billion in Q2