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Home»Crypto»Tether ready for new audit with 12 companies
Crypto

Tether ready for new audit with 12 companies

Donald MunnBy Donald MunnJune 22, 2022Updated:September 29, 2022No Comments3 Mins Read
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Tether CTO Paolo Ardoino announced that a series of audits is being prepared with a number of major specialized companies. Are new clouds gathering over the largest stablecoin on the market? 

https://t.co/SpiWdZaOvs

— Tether (@Tether_to) June 20, 2022

Tether prepares for several audits

In a tweet, the Tether company announced its intention to conduct a round of consultations with some of the most important consulting firms in the coming days. Somebody clearly immediately speculated that the recent market crashes and the collapse of Terra’s stablecoin, may have also put Tether in difficulty, and that it is trying to make amends.

On the other hand, in just one week, the stablecoin faced record withdrawals of its currency amounting to $10 billion, about 12% of Tether’s entire circulation. This is one of the largest withdrawals of money in history, second only perhaps to the $16 billion withdrawal suffered by Washington Mutual Bank, which caused its bankruptcy in 2008.

On 12 May, Tether lost its peg with the dollar for a few hours, slipping to $0.95, triggering panic in the markets, only to regain parity at the end of the day.

Ardoino in an interview with Euro money magazine, said: 

“We were put a stress test that not even bank can succeed, and we passed with flying colours”.

In fact, according to the CTO, the stablecoin is being speculated on by bearish speculators, which for now seems to have been repelled.

He continued:

“We showed that in the worst-case scenario – when there was Terra crumbling, the entire crypto market crumbling, and the stock market was going down – we got a tonne of requests of withdrawals, and we honoured them within minutes”.

Doubts about Tether’s cash reserves

The issue on which clouds continue to gather over the world’s most important stablecoin by capitalization, after Bitcoin and Ethereum, is still that of the size of Tether’s cash reserves. The next scheduled audits are said to focus on this matter.

Ardoino, who has been trying to provide reassurance of the soundness of the company’s reserves for some time, said that Tether has reduced its holdings of commercial paper, most of which are highly rated, from $40 billion to $15 billion over the past eight months. In addition, there has been a greater shift in reserves towards securities with maturities between zero and three months.

According to some, these audits also serve to broaden the list of banks with which Tether works, who are reportedly concerned by rumours and investigations by regulators into the company, which is often accused of providing poor or incomplete financial information.

The manager added:

“We wish that regulators would provide clarity on what is owed to be disclosed. If we disclose a [hypothetical] 10, it’s unfair that other stablecoins disclose a five”.

The post Tether ready for new audit with 12 companies appeared first on cryptodailynews24.com.

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Donald Munn
Donald Munn
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