Tether’s KPMG audit renews scrutiny of reserves, with 13% in volatile assets
AI Market Summary
Tether's long-awaited KPMG audit is a credibility milestone but leaves material opacity around reserves and intercompany risk with Bitfinex/iFinex. The disclosure highlights ~13% in volatile assets (precious metals and BTC), a ~25% non-cash-equivalent mix, and a decline in cash/cash equivalents versus the NYAG scrutiny period, elevating perceived redemption and solvency tail risks. This can pressure crypto risk appetite given USDT's systemic role.
Impact level
● High
Affected assets
BTC/USDT+0.66%
AI Insight · BTC/USDTAI Insight
▼ Bearish
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Tether’s audit has renewed questions about what backs its reserves and how much of the balance sheet is made up of non-cash holdings. About 13% of reserves are held in volatile assets such as precious metals and BTC, while the remaining non-cash portion includes secured loans and other investments. Cash and cash equivalents are down by more than 10% compared with the period when the New York Attorney General was scrutinizing the company, and roughly 25% of the balance sheet is in assets that are not cash equivalents, raising concerns about potential solvency risk. The auditor’s accounting treatment for BTC and other crypto assets, as well as the cost of the audit, have also been questioned.
