StableRegistry Trust Score™
Automated rating based on regulatory status, audit quality, and transparency.
Methodology: Scores are calculated algorithmically based on verifiable public data. See Methodology for full details. Not investment advice.
Verification Matrix
Comparing issuer claims against independent third-party data and regulatory filings.
| Metric | Issuer Claim | External Verification | Status |
|---|---|---|---|
| Reserve Verification Verified: February 1, 2026 | $137.50B Attested Source: Attestation (December 31, 2025) | On-Chain Assets Match Claims Source: StableRegistry Proof-of-Reserve | Verified Match |
| MiCA Authorization (EU) | Compliant Source: Issuer Statement | Not Authorized Source: ESMA Register | Discrepancy |
| NYDFS Status (USA) | Regulated Source: Issuer Statement | No License Source: NYDFS Database | Discrepancy |
Key Facts
- Peg Currency
- USD
- Backing Type
- Mixed Assets
- Audit Frequency
- Quarterly (BDO Italia)
- Reserve Ratio
- 100.20%
Global Regulatory Status
Reserve & Custody
Reserve Custodians
Bahamas-based bank. According to Tether's announcement dated November 1, 2018, Tether represented that USDT were 'fully backed by U.S. dollars safely deposited in our bank accounts.' Deltec has remained Tether's primary banking partner for reserve custody since 2018.
Reserve Attestation
Tether
Reserve Composition
Redemption
- Direct Redemption
- Yes
- Minimum Amount
- $100,000
- Fee
- 0.10%
- Processing Time
- 7 business days
- Minimum $100k redemption
- KYC/AML required
- Only for verified customers
Chain Support
Legal & Enforcement History
CFTC
•SettlementOctober 15, 2021
Key Allegations
- •Misrepresentation of USDT being fully backed by fiat currency
- •False claims that Tether maintained sufficient fiat reserves
+1 more allegations
Resolution
Consent order with $41M civil monetary penalty and cease-and-desist from making misleading statements
FinCEN
•Consent OrderOctober 15, 2021
Key Allegations
- •Violations of Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations
- •Failure to implement adequate AML compliance program
+1 more allegations
Resolution
Consent order with $1.6M civil money penalty and commitment to enhanced AML compliance
NY Attorney General
•SettlementApril 25, 2019
Key Allegations
- •Misrepresentation of reserve backing during 2016-2019 period
- •False claims of 100% cash backing when reserves included commercial paper
+2 more allegations
Resolution
Settlement reached with $18.5M fine, quarterly attestation requirement, and prohibition on serving NY customers
Historical Timeline
22 events from 2015 to 2023
2015
Early Reserve Backing Questions
According to historical reporting and the NY Attorney General settlement dated February 23, 2021, questions existed about Tether's reserve backing during its early years of operation (2015-2017) before the first Friedman LLP attestation in 2017. The period was characterized by limited third-party verification of reserves.
resolved2016
Bitfinex Security Breach and BFX Token Recovery
According to Bitfinex's security announcement dated August 2, 2016, the exchange suffered a security breach resulting in the theft of approximately 119,756 BTC. Bitfinex implemented an unprecedented recovery mechanism involving 'socialized losses,' BFX tokens as IOUs, and optional conversion to iFinex equity via SPVs.
Reserve Backing Misrepresentation
For years, Tether claimed USDT was '100% backed by fiat currency' and that 'every tether is always backed 1-to-1 by traditional currency held in our reserves.' In reality, reserves included commercial paper, secured loans, and corporate bonds. The CFTC and NY AG found these claims to be misleading.
resolved2017
Paradise Papers Reveal Corporate Structure
According to the International Consortium of Investigative Journalists (ICIJ) Offshore Leaks database and Paradise Papers dataset published November 5, 2017, Tether Holdings Limited was incorporated September 5, 2014 in the British Virgin Islands, with Giancarlo Devasini listed as Shareholder and Philip Potter as Director.
Wells Fargo Correspondent Banking Relationship Termination
According to court filings in iFinex Inc. v. Wells Fargo & Co. (N.D. Cal. Case No. 3:17-cv-01882), Wells Fargo terminated correspondent banking services for Bitfinex in March 2017, halting outgoing USD wire transfers. Bitfinex filed suit on April 5, 2017 and voluntarily dismissed on April 11, 2017.
Friedman LLP
Attestation→ January 1, 2018
Limited scope attestation of Tether's bank balances and reserve verification
2018
Deltec Bank & Trust
Review→ November 1, 2018
Single-page bank confirmation of 'portfolio cash value' as of November 1, 2018. Not a full reserve verification.
Crypto Capital Corp $850 Million Reserve Loss
According to the NY Attorney General settlement dated February 23, 2021, Tether and Bitfinex lost access to approximately $850 million in reserves held by payment processor Crypto Capital Corp when funds were seized by authorities in Poland and Portugal. The settlement states Bitfinex borrowed $400 million from Tether reserves to cover the loss without disclosure.
Noble Bank International Relationship Termination
According to the NY Attorney General settlement dated February 23, 2021, Bitfinex and Tether severed their relationship with Noble Bank International in October 2018. Public reporting stated Noble Bank was seeking a buyer. Tether subsequently announced a relationship with Deltec Bank & Trust in the Bahamas on November 1, 2018.
Crypto Capital Corp $850M Loss
Tether lost access to $850M in reserves held by payment processor Crypto Capital Corp. The funds were seized by authorities in multiple jurisdictions. Tether concealed this loss from the market and continued to claim 100% backing. This was a central issue in the NY Attorney General investigation.
resolvedTether Reserve Commingling and Intercompany Borrowing
According to the NY Attorney General settlement dated February 23, 2021, Bitfinex borrowed $400 million from Tether reserves in August-September 2018 following the Crypto Capital Corp loss, without public disclosure. On November 2, 2018, Tether transfers totaling $475 million to Bitfinex meant tethers were no longer backed 1-to-1 by U.S. dollars.
Freeh Sporkin & Sullivan
Review→ June 1, 2018
Legal/investigative report reviewing bank balances as of June 1, 2018. Not an accounting audit.
None
None→ June 1, 2021
No independent auditor engagement during this period. Tether issued self-attestations and engaged law firms for limited reviews.
2019
NY Attorney General
Settlement$18.5M
Misrepresentation of reserve backing during 2016-2019 period
2021
CFTC
Settlement$41.0M
Misrepresentation of USDT being fully backed by fiat currency
FinCEN
Consent_order$1.6M
Violations of Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations
BDO Italia
Attestation
Quarterly assurance reports on Tether's consolidated reserves and assets. Reports cover reserve composition, attestation of 1:1 backing, and verification of assets held.
Moore Cayman
Attestation→ June 30, 2022
Limited assurance attestation under ISAE 3000 covering reserve composition. Period included high commercial paper concentration (~45% of reserves estimated).
Commercial Paper Holdings Disclosure Gap
According to the NY Attorney General settlement dated February 23, 2021, Tether held significant commercial paper and other non-cash assets in reserves during 2021, including Chinese commercial paper holdings, which were not fully disclosed in public transparency reports at the time. According to Tether's attestations, commercial paper was eliminated from reserves by October 2022.
resolved2022
Terra/Luna Collapse - USDT Depeg and Redemption Surge
According to Tether's transparency reporting and CoinDesk coverage dated May 2022, USDT depegged to approximately $0.95 on May 12, 2022 during the Terra/Luna collapse. Tether processed approximately $10 billion in redemptions over a two-week period.
Terra/Luna Contagion Depeg Event
Following the collapse of Terra/Luna in May 2022, USDT briefly depegged to $0.95 amid market panic and heavy redemptions. Tether processed over $10B in redemptions in two weeks, demonstrating operational resilience but raising questions about reserve liquidity during stress events.
resolved2023
Secured Loans Pledge Not Fulfilled by 2023 Deadline
According to Decrypt reporting dated June 2023, Tether pledged to eliminate secured loans from reserves by the end of 2023. However, per Tether's Q2 2023 attestation, secured loans increased from $5.3 billion to $5.5 billion during the first half of 2023.
Financial Incidents
8 incidents recordedSecured Loans Pledge Not Fulfilled by 2023 Deadline
MediumJune 30, 2023 (occurred: December 31, 2022)
According to Decrypt reporting dated June 2023, Tether pledged to eliminate secured loans from reserves by the end of 2023. However, per Tether's Q2 2023 attestation, secured loans increased from $5.3 billion to $5.5 billion during the first half of 2023.
Details
Tether publicly pledged to eliminate secured loans from its reserve composition by the end of 2023. According to Decrypt reporting from June 2023 citing Tether's Q2 2023 attestation, secured loans in reserves increased from approximately $5.3 billion at year-end 2022 to approximately $5.5 billion by June 30, 2023. This represented an increase rather than the promised reduction. According to subsequent attestations, Tether later reduced secured loans, though the initial 2023 deadline was not met.
Customer Impact
No direct customer impact. The pledge not being fulfilled by the stated deadline raised questions about reserve composition transparency.
Issuer Response
Tether subsequently reduced secured loans in later quarters according to attestations, though the initial end-of-2023 deadline was not met. The company maintained that all loans remained fully collateralized.
Sources
Terra/Luna Collapse - USDT Depeg and Redemption Surge
HighMay 12, 2022
According to Tether's transparency reporting and CoinDesk coverage dated May 2022, USDT depegged to approximately $0.95 on May 12, 2022 during the Terra/Luna collapse. Tether processed approximately $10 billion in redemptions over a two-week period.
Details
During the Terra/Luna stablecoin collapse in May 2022, USDT experienced significant selling pressure and temporarily depegged from its $1.00 target, trading as low as approximately $0.95 on major exchanges. According to Tether's public statements and transparency reports, the company processed approximately $10 billion in redemption requests over a two-week period beginning May 12, 2022. Tether maintained that all redemption requests were honored and that the peg was restored within approximately two weeks. The event represented one of the largest sustained redemption periods in Tether's history.
Customer Impact
USDT holders experienced temporary price deviation from $1.00 peg, with market price reaching approximately $0.95. According to Tether, all redemption requests were processed without suspension.
Issuer Response
Tether processed approximately $10 billion in redemptions over two weeks. The company issued public statements affirming reserve backing and operational continuity. The peg was restored to approximately $1.00 within two weeks.
Sources
Crypto Capital Corp $850 Million Reserve Loss
CriticalOctober 1, 2018 (occurred: May 1, 2018)
According to the NY Attorney General settlement dated February 23, 2021, Tether and Bitfinex lost access to approximately $850 million in reserves held by payment processor Crypto Capital Corp when funds were seized by authorities in Poland and Portugal. The settlement states Bitfinex borrowed $400 million from Tether reserves to cover the loss without disclosure.
Details
NYAG settlement recitals state Bitfinex increasingly relied on third-party payment processors, primarily Crypto Capital Corp, beginning in 2017. By mid-2018, Crypto Capital held over $1 billion in customer deposits. In May 2018, Polish authorities froze a Crypto Capital account holding at least $340 million in connection with money laundering allegations. According to internal communications cited in the NYAG settlement, approximately $150 million was also frozen in Portugal. These seizures account for approximately $490 million of the total $850 million in inaccessible funds. The remaining approximately $360 million has not been definitively attributed to specific jurisdictions in available primary sources. The current status of the seized funds (whether recovered, still frozen, or forfeited) is not documented in available sources. Internal communications cited in the settlement show Bitfinex representatives messaging 'Oz' (Crypto Capital operator) regarding $860 million in stuck funds. The settlement states that in August-September 2018, Bitfinex borrowed $400 million from Tether reserves, and that as of November 2, 2018, tethers were no longer backed 1-to-1 by U.S. dollars.
Customer Impact
According to the NYAG settlement, Bitfinex temporarily suspended fiat withdrawals for certain customers during the liquidity crisis, though all customer funds were eventually recovered through the Tether reserve borrowing arrangement.
Issuer Response
Bitfinex borrowed $400 million from Tether reserves to maintain operations. Tether and Bitfinex reached a settlement with the NY Attorney General on February 23, 2021, requiring $18.5 million in penalties and quarterly attestation disclosures. According to the settlement, Tether neither admitted nor denied the allegations.
Related Events
Sources
Noble Bank International Relationship Termination
HighOctober 1, 2018
According to the NY Attorney General settlement dated February 23, 2021, Bitfinex and Tether severed their relationship with Noble Bank International in October 2018. Public reporting stated Noble Bank was seeking a buyer. Tether subsequently announced a relationship with Deltec Bank & Trust in the Bahamas on November 1, 2018.
0Details
NYAG settlement recitals state Bitfinex opened an account at Noble Bank International (a Puerto Rico-based entity) in June 2017. Tether opened its Noble Bank account on September 15, 2017, with Bitfinex transferring $382,446,847.71 into Tether's account that same day. In October 2018, Bitfinex and Tether severed their relationship with Noble Bank. On November 1, 2018, Tether announced a relationship with Deltec Bank & Trust Limited in the Bahamas, representing that USDT were 'fully backed by U.S. dollars safely deposited in our bank accounts.'
Customer Impact
According to Bitfinex statements from October 7, 2018 (as cited in NYAG settlement), fiat and crypto withdrawals continued to function normally during the banking transition.
Issuer Response
Bitfinex stated on October 7, 2018 that the exchange was 'not insolvent' and that withdrawal functions operated normally. Tether established a new banking relationship with Deltec Bank & Trust in the Bahamas on November 1, 2018.
Related Events
Sources
Tether Reserve Commingling and Intercompany Borrowing
CriticalAugust 21, 2018
According to the NY Attorney General settlement dated February 23, 2021, Bitfinex borrowed $400 million from Tether reserves in August-September 2018 following the Crypto Capital Corp loss, without public disclosure. On November 2, 2018, Tether transfers totaling $475 million to Bitfinex meant tethers were no longer backed 1-to-1 by U.S. dollars.
Details
The NYAG settlement recitals state that 'In the summer of 2018, Bitfinex borrowed $400 million from Tether.' On August 21, 2018 and into September 2018, Tether made cash transfers from its Deltec account to Bitfinex. Offsetting ledger actions involved directing 'Oz' to transfer funds between Bitfinex/Tether Crypto Capital accounts. Repayment involved redeeming 400 million tethers in October 2018, without disclosure. On November 1, 2018, Tether announced a relationship with Deltec and represented that USDT were 'fully backed by US dollars.' On November 2, 2018, Tether made transfers totaling $475 million to Bitfinex's Deltec account, with the settlement stating that 'as of November 2, 2018, tethers were again no longer backed 1-to-1 by U.S. dollars in a Tether bank account.'
Customer Impact
According to the NYAG settlement, Tether continued representing that USDT was 'fully backed' during periods when reserves had been transferred to Bitfinex, potentially misleading market participants about reserve status.
Issuer Response
According to the NYAG settlement, Tether neither admitted nor denied the allegations. Tether maintained that all tethers remained fully backed, characterizing the transfers as short-term loans secured by assets. The settlement required Tether to pay $18.5 million and provide quarterly attestations.
Related Events
Sources
Paradise Papers Reveal Corporate Structure
MediumNovember 5, 2017 (occurred: September 5, 2014)
According to the International Consortium of Investigative Journalists (ICIJ) Offshore Leaks database and Paradise Papers dataset published November 5, 2017, Tether Holdings Limited was incorporated September 5, 2014 in the British Virgin Islands, with Giancarlo Devasini listed as Shareholder and Philip Potter as Director.
0Details
The Offshore Leaks database entry for 'Tether Holdings Limited' shows status 'Founded,' data source 'Paradise Papers,' service provider 'Appleby,' and incorporation date of September 5, 2014 in the British Virgin Islands. Officers include Giancarlo Devasini (Shareholder) and Philip Potter (Director). The leak revealed corporate governance overlap between Bitfinex and Tether, with shared executives and the same parent company (iFinex Inc.).
Customer Impact
No direct customer impact. The leak revealed corporate structure and governance relationships that were not previously publicly disclosed.
Issuer Response
Tether and Bitfinex confirmed their shared parent company structure (iFinex Inc.) and executive overlap. The companies maintained that operational separation was maintained despite shared ownership.
Sources
Wells Fargo Correspondent Banking Relationship Termination
HighMarch 31, 2017
According to court filings in iFinex Inc. v. Wells Fargo & Co. (N.D. Cal. Case No. 3:17-cv-01882), Wells Fargo terminated correspondent banking services for Bitfinex in March 2017, halting outgoing USD wire transfers. Bitfinex filed suit on April 5, 2017 and voluntarily dismissed on April 11, 2017.
0Details
The iFinex v. Wells Fargo complaint alleges Wells Fargo served as correspondent bank for Taiwan-based banks used by Bitfinex/Tether. In the latter half of March 2017, Wells Fargo informed the Taiwan banks it would no longer service outgoing USD wires. 'Taishin' (the last of the Taiwan-based banks) confirmed on March 31, 2017 that outgoing wires would no longer be processed. On April 5, 2017, iFinex and related entities filed suit against Wells Fargo (Case No. 3:17-cv-01882) seeking relief tied to transfer freezes. According to court docket records, iFinex voluntarily dismissed the lawsuit on April 11, 2017, just six days after filing. The specific reason for the dismissal is not documented in publicly available court records. No settlement agreement has been made public, and neither party issued public statements explaining the dismissal. Bitfinex subsequently established a banking relationship with Noble Bank International in Puerto Rico in June 2017, approximately two months after the Wells Fargo dismissal.
Customer Impact
Bitfinex customers experienced temporary disruption to USD withdrawal capabilities in late March 2017.
Issuer Response
Bitfinex filed litigation against Wells Fargo on April 5, 2017, then voluntarily dismissed the action on April 11, 2017. The specific reason for the voluntary dismissal is not documented in publicly available court records. No settlement agreement has been made public. Bitfinex subsequently established a banking relationship with Noble Bank International in Puerto Rico in June 2017.
Sources
Bitfinex Security Breach and BFX Token Recovery
CriticalAugust 2, 2016
According to Bitfinex's security announcement dated August 2, 2016, the exchange suffered a security breach resulting in the theft of approximately 119,756 BTC. Bitfinex implemented an unprecedented recovery mechanism involving 'socialized losses,' BFX tokens as IOUs, and optional conversion to iFinex equity via SPVs.
Details
Bitfinex announced a security breach on August 2, 2016, halting all trading and withdrawals. The breach was limited to bitcoin wallets, with approximately 119,756 BTC stolen (valued at approximately $72 million at the time). Bitfinex implemented a 'socialized loss scenario' allocating losses across all users, with customers experiencing a 36.067% loss converted to BFX tokens (1 BFX = $1 USD of loss). BFX tokens began trading on August 10, 2016. On September 24, 2016, Bitfinex announced a pathway to convert BFX tokens into beneficial interests in iFinex Inc. via Special Purpose Vehicles (SPVs), explicitly stating 'THIS IS NOT A SOLICITATION.' The redemption mechanism operated on a dual-track basis: (1) direct cash redemption at face value ($1 per BFX token), and (2) equity conversion through SPVs for non-U.S. persons. By October 13, 2016, Bitfinex announced that token holders had exchanged more than 20 million BFX tokens for equity shares (representing approximately 28% of the ~72 million BFX tokens issued), with exchanged tokens destroyed. Bitfinex also created Recovery Right Tokens (RRTs) distributed to BFX token holders, entitling holders to proceeds from any recovery of stolen funds. According to Bitfinex statements and industry reporting, all remaining BFX tokens were redeemed or converted to equity by March 31, 2017, completing the recovery program.
Customer Impact
All Bitfinex customers experienced a 36.067% loss of funds across all currencies, converted to BFX tokens as IOUs. Customers could hold BFX for potential recovery, trade them, or convert to iFinex equity (non-U.S. persons).
Issuer Response
Bitfinex issued BFX tokens representing customer losses at 1 BFX = $1 USD. Created Recovery Right Tokens (RRTs) distributed to BFX token holders, entitling holders to proceeds from any recovery of stolen funds. Established SPV structure for equity conversion available to non-U.S. persons. Collaborated with law enforcement including FBI. According to Bitfinex announcements dated October 13, 2016, more than 20 million BFX tokens (approximately 28% of total issued) were exchanged for equity shares, with exchanged tokens destroyed. All BFX tokens were eventually redeemed or converted to equity by March 31, 2017.
Sources
Banking Relationships
3 active, 3 terminated
Active Relationships
Deltec Bank & Trust Limited
ActiveBahamas-based bank. According to Tether's announcement dated November 1, 2018, Tether represented that USDT were 'fully backed by U.S. dollars safely deposited in our bank accounts.' Deltec has remained Tether's primary banking partner for reserve custody since 2018.
Cantor Fitzgerald
ActiveAccording to Tether announcements dated January 2026, Cantor Fitzgerald serves as a primary custodian and manager for US Treasury reserves. Bloomberg reported on January 16, 2026 that Cantor Fitzgerald has been managing a significant portion of Tether's $134 billion in US Treasury holdings.
Capital Union Bank
ActiveBahamas-based bank providing operational banking services to Tether. According to Tether attestations, Capital Union Bank holds operational accounts separate from reserve custody at Deltec.
Terminated Relationships
Noble Bank International
TerminatedAccording to the NY Attorney General settlement dated February 23, 2021, Bitfinex and Tether severed their relationship with Noble Bank in October 2018. According to the settlement document, Tether opened its account on September 15, 2017 with an initial deposit of $382,446,847.71 transferred from Bitfinex. Bloomberg reported on October 8, 2018 that Noble Bank International was seeking a buyer and had lost its banking relationship with Tether and Bitfinex.
Puerto Rico-based bank, subsidiary of Noble Markets LLC. Served as Tether's primary banking relationship during 2017-2018 period.
Crypto Capital Corp
TerminatedAccording to the NY Attorney General settlement dated February 23, 2021, Bitfinex increasingly relied on Crypto Capital Corp as a payment processor from 2017. By mid-2018, Crypto Capital held over $1 billion in customer deposits. According to the settlement, in May 2018 Polish authorities froze a Crypto Capital account holding at least $340 million, with total inaccessible funds of approximately $850 million. According to DOJ SDNY announcements dated April 30, 2019, Crypto Capital operators were charged with providing 'shadow banking' services to cryptocurrency exchanges. The $850 million loss was not disclosed to investors until the NY Attorney General investigation became public in April 2019.
Panama-based payment processor. Critical incident involving $850M in inaccessible funds. Led to Bitfinex borrowing from Tether reserves to cover shortfall.
Wells Fargo
TerminatedAccording to court filings in iFinex Inc. v. Wells Fargo & Co. (N.D. Cal. Case No. 3:17-cv-01882) filed April 5, 2017, Wells Fargo terminated correspondent banking services effective March 31, 2017. The termination halted outgoing USD wire transfers for Taiwan-based banks serving Bitfinex and Tether. According to the complaint, Wells Fargo provided no prior notice of the termination. The litigation was voluntarily dismissed on April 11, 2017.
Correspondent banking relationship for Taiwan-based banks serving Bitfinex/Tether. Termination marked beginning of Tether's banking difficulties.
Audit History
BDO Italia
June 1, 2021 → Present
Quarterly assurance reports on Tether's consolidated reserves and assets. Reports cover reserve composition, attestation of 1:1 backing, and verification of assets held.
- • Attestation engagement, not a full audit
- • Point-in-time verification, not continuous monitoring
- • Relies on management representations for certain data
Change reason: Engaged following NYAG settlement requirements for quarterly attestations. Replaced prior accounting firm to provide independent assurance on reserves.
Moore Cayman
March 1, 2021 → June 30, 2022
Limited assurance attestation under ISAE 3000 covering reserve composition. Period included high commercial paper concentration (~45% of reserves estimated).
- • Limited assurance engagement, not full audit
- • Point-in-time verification
- • Relied on management representations
Change reason: Engaged to provide quarterly attestations following NYAG settlement requirements, replaced by BDO Italia in 2022
Deltec Bank & Trust
November 1, 2018 → November 1, 2018
Single-page bank confirmation of 'portfolio cash value' as of November 1, 2018. Not a full reserve verification.
- • Single-page confirmation letter
- • Confirmed 'portfolio cash value' only, not total backing
- • No verification of reserve composition or liabilities
- • Bank confirmation, not independent audit
Change reason: Provided following establishment of Deltec banking relationship to confirm account existence
Freeh Sporkin & Sullivan
June 1, 2018 → June 1, 2018
Legal/investigative report reviewing bank balances as of June 1, 2018. Not an accounting audit.
- • Explicitly disavowed audit firm procedures and standards
- • Limited to specific bank accounts as of a single date
- • Did not verify reserve composition beyond cash balances
- • Law firm engagement, not CPA attestation
Change reason: Engaged following Friedman LLP departure to provide limited review of bank balances while seeking new auditor
None
January 1, 2018 → June 1, 2021
No independent auditor engagement during this period. Tether issued self-attestations and engaged law firms for limited reviews.
- • No independent CPA attestation
- • Limited third-party verification of reserves
- • Reliance on internal controls and management representations
Change reason: Following Friedman LLP departure, Tether did not engage a replacement auditor for over three years, during which time the NY Attorney General investigation occurred and $850 million Crypto Capital loss was discovered.
Friedman LLP
January 1, 2017 → January 1, 2018
Limited scope attestation of Tether's bank balances and reserve verification
- • Did not include full balance sheet audit
- • Limited to specific bank accounts as of verification dates
- • Did not verify reserve composition beyond cash equivalents
Change reason: Engagement terminated after Friedman was acquired by StoneTurn and Tether sought new auditor
Historical Controversies
Tether lost access to $850M in reserves held by payment processor Crypto Capital Corp. The funds were seized by authorities in multiple jurisdictions. Tether concealed this loss from the market and continued to claim 100% backing. This was a central issue in the NY Attorney General investigation.
For years, Tether claimed USDT was '100% backed by fiat currency' and that 'every tether is always backed 1-to-1 by traditional currency held in our reserves.' In reality, reserves included commercial paper, secured loans, and corporate bonds. The CFTC and NY AG found these claims to be misleading.
Following the collapse of Terra/Luna in May 2022, USDT briefly depegged to $0.95 amid market panic and heavy redemptions. Tether processed over $10B in redemptions in two weeks, demonstrating operational resilience but raising questions about reserve liquidity during stress events.
According to historical reporting and the NY Attorney General settlement dated February 23, 2021, questions existed about Tether's reserve backing during its early years of operation (2015-2017) before the first Friedman LLP attestation in 2017. The period was characterized by limited third-party verification of reserves.
According to the NY Attorney General settlement dated February 23, 2021, Tether held significant commercial paper and other non-cash assets in reserves during 2021, including Chinese commercial paper holdings, which were not fully disclosed in public transparency reports at the time. According to Tether's attestations, commercial paper was eliminated from reserves by October 2022.
Gold-Backed Token
Related Stablecoins
Issuer
- Tether Limited(vg • Limited Company)
- Tether Holdings Limited(hk • Holding Company)
- FinCEN MSB Registration (US)