Tether signs contracts with four major audits, Circle's compliance moat collapses, stock price plummets by 20%

Author: Qin Xiaofeng, Odaily Planet Daily

On March 24, Tether, the world's largest stablecoin issuer, announced that it has officially commissioned one of the Big Four accounting firms to conduct its first comprehensive independent financial statement audit since its establishment. In the announcement, Tether positioned this self-verification as "the largest initial audit in the history of financial markets."

Previously, Tether had faced significant scrutiny regarding the transparency of its reserves, while its competitor Circle (the issuer of USDC) had accepted annual audits from Deloitte early on, keeping Tether in the spotlight of public opinion. Now, with Tether finally signing with a Big Four firm, this long-standing transparency competition seems to have reached a true conclusion—yesterday, Circle's stock price plummeted by 20%.

As USDT, with a market capitalization exceeding $184 billion, begins to undergo the strictest financial scrutiny, the impact is bound to extend beyond the cryptocurrency niche, touching deeper operational logics of the global financial system. This is not just about the reputation of Tether as a company; it marks an important turning point for the entire stablecoin industry from partial compliance to comprehensive auditing.

I. Tether's Redemption: From Trust Deficit to Sunshine Transparency

Looking back at Tether's growth trajectory, 2021 was a true watershed year. That year, Tether faced two major regulatory penalties, paying nearly $60 million in fines. These lessons became the starting point for its subsequent systematic compliance efforts.

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

In October of the same year, the Commodity Futures Trading Commission (CFTC) took action again, accusing Tether of misleading investors between 2016 and 2019—specifically, the claim that "every USDT is backed by $1" was proven to be inaccurate. As a result, Tether paid another $41 million in fines.

Although these two penalties were costly, they forced Tether to begin building a compliance framework. However, even so, market skepticism regarding its reserves never dissipated, with labels like "paper tiger" and "ticking time bomb" still closely following it.

Under regulatory pressure, Tether began releasing quarterly attestations in an attempt to regain trust. However, these reports, issued by institutions like Moore Cayman in the Cayman Islands, were essentially just snapshots of reserves and fell far short of a true comprehensive audit, maintaining limited credibility.

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

Tether's commissioning of the Big Four for a comprehensive audit signifies far more than a typical financial check. This audit needs to cover an extremely complex combination of digital assets, traditional reserves, and tokenized liabilities, a scale that is rare globally outside of a few sovereign institutions.

For Tether, which has long been under scrutiny, this is akin to a true coming-of-age ceremony. With the endorsement of the Big Four, the legitimacy of USDT as a digital dollar is no longer just talk. For institutions on Wall Street, large pension funds, and sovereign funds waiting to enter the market, seeing the audit report from the Big Four will instill greater confidence in incorporating USDT into their asset allocations. This will not only bring more capital inflows to Tether but also promote further maturation of the entire digital asset market.

As Tether CEO Paolo Ardoino stated, "The establishment of trust comes from institutions being willing to undergo comprehensive scrutiny. This audit is part of our efforts over the years to strengthen the system, aiming for Tether to meet the highest standards in the global financial sector."

II. Industry Restructuring Accelerates, Tether Consolidates "Digital Central Bank" Position

In the past, Circle maintained a moral high ground in the stablecoin market with its image of "compliance and transparency." It emphasized compliance with U.S. regulations and the advantages of Deloitte audits, often putting Tether in a defensive position in competition.

However, Tether's signing with the Big Four is essentially a direct offensive in the area where its competitor excels, directly shaking the core moat of USDC that has stood for years. Once the audit is completed, USDT will no longer have a transparency shortcoming; instead, it may leverage its massive scale advantage to further widen the gap with its competitors.

Data shows that USDT's market capitalization has exceeded $184 billion, with over 550 million global users. This scale advantage, after undergoing the Big Four audit, is likely to translate into a stronger compliance advantage, creating a situation where the strong get stronger. In contrast, USDC's market capitalization is about $78.7 billion; although it started compliance early, it has been far outpaced in scale.

Perhaps influenced by Tether's acceptance of the Big Four audit, on the evening of March 24, Circle's stock price fell from $126 to below $100, currently reported at $101, with a maximum drop of 20% in 24 hours.

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 in the top 20, and its influence has long 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, and Nigeria—a USDT that has undergone a Big Four audit may even be more trustworthy than the local banking system, becoming a de facto tool for digital dollarization.

This expansion of influence has allowed Tether to evolve from a mere digital currency issuer into a key infrastructure within the global financial system. As the company stated, Tether is "setting a benchmark for responsible large-scale digital asset infrastructure."

Tether's Multi-Dimensional Compliance Layout

To prepare for the Big Four audit, Tether made key personnel adjustments in early 2025, appointing Simon McWilliams as Chief Financial Officer (CFO). His addition helped Tether establish an internal financial structure that meets the standards of top auditing firms, ensuring the company has the institutional foundation needed for a comprehensive audit.

McWilliams stated regarding the audit, "We selected this Big Four accounting firm through a competitive process because the company has been operating according to Big Four audit standards, and the audit will be completed smoothly." This statement reveals Tether's confidence in passing the audit and indicates that internal preparations have long been in place.

The most strategically significant step in Tether's compliance layout is the launch of a compliance stablecoin, USAT, 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 stablecoin backed by the dollar. The design intention of USAT is to meet the stringent requirements of the GENIUS Act, which was signed into law by the U.S. President in 2025, establishing 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 from its inception according to these requirements—appointing Bo Hines, who previously served as the executive director of the White House Cryptocurrency Committee, as CEO, issued by Anchorage Digital, the first federally chartered cryptocurrency 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 capitalization is approximately $27 million, although it is far less than USDT's $184 billion, 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 loose regulations; while USAT serves as a compliant version of the digital dollar aimed at U.S. institutions and regulated entities. This way, Tether can flexibly respond to different regulatory environments, maintaining global influence while meeting the stringent requirements of the U.S. market.

In addition to financial compliance, Tether has also completed a role transformation in law enforcement cooperation. According to Tether, it has assisted law enforcement agencies in 62 countries and regions in handling over 1,800 cases, freezing USDT worth $3.4 billion related to illegal activities. According to a report by blockchain analysis firm Elliptic, by the end of 2025, Tether and Circle had jointly banned about 5,700 wallets, involving assets of about $2.5 billion, three-quarters of which were USDT.

Tether CEO Paolo Ardoino stated, "Law enforcement agencies contact us, provide relevant information, and we take action based on the laws of the respective countries after verification. We follow this process 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 globally. Transitioning from a passive "regulatory subject" 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 the Big Four is not just a self-redemption; it is the true beginning of an industry reshuffle.

With the deep involvement of the Big Four accounting firms, the transparency and institutionalization of stablecoins are aligning more closely 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 to who can provide more value within a compliance framework.

For Tether, this overdue coming-of-age ceremony is both an end and a beginning. It marks the completion of Tether's transition from controversy to recognition and opens a new journey as a global digital financial infrastructure. For the entire digital asset industry, a more mature, transparent, and institutionalized era has already begun.