While Tether published an attestation confirming it has enough reserves to back the current USDT circulation, users in the crypto community are still expecting a proper audit.
Tether Holdings Limited, the company behind Tether (USDT), has published a testimony yesterday from an insurance company that claims the stablecoin is “fully backed” but without disclosing what kind of assets are backing up the currency.
Moore Cayman, an insurance company located in the Cayman Islands, testified for Tether, stating that the stablecoin is fully backed with undisclosed reserves. The document examines several aspects of Tether, indicating that its consolidated assets exceed its consolidated liabilities.
As of February 28, 2021, Tether holdings accounted for $35.28 billion in total assets exceeding its total liabilities of $35.15 million.
“Tether has always been fully backed, and the assurance opinion we made available today confirms it once again. As Tether’s growth in the market continues to validate our business, we understand the public’s interest in this matter and are pleased to share this attestation as part of our ongoing commitment to transparency.” — claims the report.
The Community Wants a Proper Audit
While the document claims that Tether has more than enough USDT reserves, this has raised concerns (and critics as well) about the transparency of Tether —and whether or not they are fully backed by US dollars. The stablecoin is one of the most vital currencies in the crypto market.
The problem is an attestation is not the same as an audit, and Moore Cayman is not a formally recognized auditing body. Tether has not been audited by an auditing firm like Deloitte or PwC (PricewaterhouseCoopers). As such, the insurance is not part of the reporting requirement in the State of New York.
An audit is made by expert analysts in blockchain to ensure a protocol is clear from potential risk in all of its components. On the other hand, an attestation only evaluates how accurate is the data being examined by an auditor.
Tether plans to issue another attestation, followed by quarterly attestations as well. Some critics in the crypto-community have stated that attestations will only remain as such and will never provide the proper security an audit does.
Tether was also subject to a ransom demand for 500 BTC, around $29,500,000. The sender threatened the company to leak “harmful” documents that could destabilize the crypto market.