Tether Signs Big Four Auditors, Circle’s Compliance Moat Crumbles, Stock Plummets 20%

Author | Qin Xiaofeng (@QinXiaofeng 888 )

On March 24, Tether, the world’s largest stablecoin issuer, announced that it has formally commissioned one of the global Big Four accounting firms to initiate its first comprehensive independent financial statement audit since the company’s inception. In its announcement, Tether positioned this self-initiated move as “the largest first-time audit in the history of financial markets.”

Previously, Tether had long faced skepticism regarding the transparency of its reserves, while its competitor Circle (the issuer of USDC) had long been subject to annual audits by Deloitte, keeping Tether constantly under public scrutiny. Now, with Tether finally signing with a Big Four firm, this years-long transparency competition seems to have reached its true conclusion—yesterday, Circle’s stock price plummeted by up to 20%.

When USDT, with a market cap exceeding $184 billion, begins to undergo the most rigorous financial scrutiny, its impact is destined to extend beyond the small circle of 암호화폐currency and touch upon the deeper operational logic of the global financial system. This is not just about the reputation of Tether as a single company; it marks a significant turning point for the entire stablecoin industry as it moves from partial compliance towards comprehensive auditing.

I. Tether’s Redemption: From a Trust Deficit to Sunlight Transparency

Looking back at Tether’s growth trajectory, 2021 can be considered a true watershed year. That year, Tether faced two major regulatory penalties in succession, paying a total of nearly $60 million in fines. These lessons became the starting point for its subsequent systematic compliance construction.

In February 2021, an investigation by the New York Attorney General’s Office (NYAG) revealed Tether’s original sin: for a period, the company did not have sufficient reserves to back all USDT in circulation and had even misappropriated $900 million in reserves to cover losses at its affiliated exchange, Bitfinex. Ultimately, Tether paid an $18.5 million fine to settle and committed to submitting quarterly reports disclosing the composition of its reserve assets.

In October of the same year, the U.S. Commodity Futures Trading Commission (CFTC) stepped in again, accusing Tether of misleading investors between 2016 and 2019—the claim that “every USDT is backed 1-to-1 by a U.S. dollar” was proven inaccurate. For this, Tether paid another $41 million fine.

Although these two penalties were costly, they forced Tether to begin building a compliance framework. Yet, even so, market doubts about its reserves never dissipated; labels like “paper tiger” and “ticking time bomb” continued to follow it.

Under regulatory pressure, Tether began publishing quarterly attestation reports in an attempt to regain trust. However, these reports, issued by entities like Moore Cayman in the Cayman Islands, were essentially reserve snapshots, far from constituting a true comprehensive audit, and their credibility remained limited.

This state of semi-transparency left Tether in an awkward position: on one hand, it was indeed disclosing reserve composition and proving assets exceeded liabilities; on the other hand, the market remained skeptical about the depth and reliability of such reports.

Tether’s commissioning of a Big Four firm for a comprehensive audit holds significance far beyond a typical financial review. This audit needs to cover an extremely complex combination of digital assets, traditional reserves, and tokenized liabilities. The scale is so large that, worldwide, it is extremely rare outside of a few sovereign entities.

For Tether, long plagued by skepticism, this is nothing less than a true rite of passage. With the endorsement of a Big Four firm, the legitimacy of USDT as a digital dollar is no longer just talk. For institutions like Wall Street firms, large pension funds, and sovereign wealth funds waiting to enter, seeing the audit report from a Big Four accounting firm will give them greater confidence to include USDT in their asset allocations. This will not only bring more capital inflows to Tether but also drive further maturation of the entire digital asset market.

As Tether CEO Paolo Ardoino stated: “Trust is built when institutions are willing to undergo comprehensive scrutiny. This audit is part of our multi-year efforts to strengthen our systems, with the goal of enabling Tether to meet the highest standards in the global financial arena.”

II. Industry Reshuffle Accelerates, Tether Consolidates Its “Digital Central Bank” Status

In the past, Circle, with its image of “compliance and transparency,” consistently held the moral high ground in the stablecoin market. Its focus on U.S. regulatory compliance and emphasis on the advantage of Deloitte audits often put Tether in a defensive position during competition.

But Tether’s signing with a Big Four firm this time is akin to launching a frontal assault in the very field where its opponent excelled, directly shaking the core moat that USDC had built over many years. Once the audit is completed, USDT will no longer have a transparency weakness. Instead, it may leverage its massive scale advantage to further widen the gap with its competitors.

Data shows that USDT’s market cap has exceeded $184 billion, with over 550 million global users. This scale advantage, after undergoing a Big Four audit, is likely to translate into stronger compliance advantages, creating a situation where the strong get stronger. In comparison, USDC’s market cap is approximately $78.7 billion. Although it started its compliance journey earlier, it has been left far behind in terms of scale.

Perhaps influenced by Tether’s acceptance of a Big Four audit, on the evening of March 24, Circle’s stock price fell from $126, briefly dipping below $100. It is currently reported at $101, with a maximum 24-hour drop of 20%.

Tether’s ambitions clearly extend beyond the cryptocurrency realm. In fact, Tether is already one of the major holders of U.S. Treasury bonds, ranking around the top 20. Its influence has already extended into the sovereign debt market, making its role in the traditional financial system increasingly important.

From a geopolitical perspective, for emerging market countries experiencing hyperinflation or financial blockades—such as Turkey, Argentina, Nigeria—a USDT audited by a Big Four firm may even be more trustworthy than the local banking system, becoming a de facto tool for digital dollarization.

This expansion of influence is transforming Tether from a mere digital currency issuer into a critical piece of infrastructure within the global financial system. As the company statement says, Tether is “setting a benchmark for responsible digital asset infrastructure at scale.”

Tether’s Multi-Dimensional Compliance Layout

In preparation for the Big Four audit, Tether made a key personnel adjustment in early 2025, appointing Simon McWilliams as Chief Financial Officer (CFO). His arrival helped Tether establish an internal financial framework that meets the standards of top-tier audit firms, ensuring the company has the institutional foundation required to undergo a comprehensive audit.

Discussing the audit, McWilliams stated: “We selected this Big Four firm through a competitive process because the company is already operating to Big Four audit standards, and the audit work will proceed smoothly.” This comment reveals Tether’s confidence in passing the audit and indicates that internal preparations were long complete.

The most strategically significant step in Tether’s compliance layout was the launch of USAT, a compliant stablecoin specifically for the U.S. market, achieving full alignment with the U.S. regulatory framework.

In September 2025, Tether officially launched USAT, its first fully U.S.-regulated, U.S. dollar-backed stablecoin. USAT was designed from the outset to meet the stringent requirements of the GENIUS Act. This act, signed into law by the U.S. President in 2025, established a federal regulatory framework for stablecoin issuance.

The GENIUS Act sets strict standards for stablecoin issuers: 100% reserve backing, annual independent audits, anti-money laundering compliance, and tiered regulatory requirements. USAT was built according to these requirements from its inception—appointing Bo Hines, former Executive Director of the White House Crypto Council, as CEO, issued by Anchorage Digital (the first federally chartered crypto bank in the U.S.), with Wall Street giant Cantor Fitzgerald serving as the reserve custodian.

Notably, just one month after its launch, USAT successfully passed an audit by Deloitte. Currently, USAT’s market cap is approximately $27 million, far from USDT’s $184 billion, but it represents the highest standard Tether can achieve in terms of compliance.

This dual-track arrangement reflects Tether’s strategic deployment: USDT continues to serve the global market, especially emerging markets and regions with relatively relaxed regulations; while USAT serves as the compliant version of the digital dollar for U.S. institutions and regulated entities. This allows Tether to respond flexibly in different regulatory environments, maintaining its global influence while meeting the strict requirements of the U.S. market.

Beyond financial compliance, Tether has also completed a role transformation in terms of law enforcement cooperation. According to Tether’s disclosures, it has assisted law enforcement agencies in over 62 countries and regions in handling more than 1,800 cases, freezing USDT worth $3.4 billion related to illegal activities. According to a report by blockchain analytics firm Elliptic, as of the end of 2025, Tether and Circle had blocked approximately 5,700 wallets, involving assets worth about $2.5 billion, three-quarters of which were USDT.

Tether CEO Paolo Ardoino commented on this: “Law enforcement agencies contact us, provide relevant information, we verify it and take action in accordance with the laws of the relevant country. This is the process we follow when cooperating with agencies like the U.S. Department of Justice and the FBI.”

This law enforcement cooperation not only improves Tether’s regulatory image but also provides strong support for its compliant operations worldwide. Transforming from a passive “regulatory target” to an active “law enforcement partner,” Tether has successfully repositioned itself as a responsible participant in the global financial system.

Conclusion: The Era of Comprehensive Audits for Stablecoins Has Just Begun

Tether’s signing with a Big Four firm is not just an act of self-redemption; it marks the true beginning of an industry reshuffle.

As Big Four accounting firms become deeply involved, the transparency and institutionalization of stablecoins are aligning with traditional finance. When comprehensive audits become the industry standard, competition in the stablecoin market will no longer be limited to who is more transparent, but will shift towards who can provide more value within the compliance framework.

For Tether, this long-awaited rite of passage is both an end and a beginning. It marks the completion of Tether’s journey from controversy to recognition and opens a new chapter in its role as a global digital financial infrastructure. For the entire digital asset industry, a more mature, transparent, and institutionalized era has already begun.

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