Tether: 12 Years of «Trust Us». Now KPMG Is Actually Looking Inside

On March 24, 2026, Tether published a press release that seemed almost routine: following a "competitive process," it had selected a Big Four firm to conduct what it described as "the biggest inaugural audit in the history of financial markets." No firm name. No completion date. Just the announcement that, after twelve years in operation, the company issuing 73% of the world's stablecoins had finally agreed to have its books examined by someone with the credentials to actually do it. Three days later, on March 27, the Financial Times identified the firm — citing "people familiar with the matter" — as KPMG. The fact that the name was absent from Tether's original statement is already a story. The reasons why KPMG may have preferred to remain anonymous in the early weeks is another one. And the reason all of this is happening now — after twelve years of promises and auditors who quietly disappeared — is the story that really needs telling.

Tether by the numbers: an entity the world hasn't decided how to oversee

As of May 1, 2026, the quarterly attestation signed by BDO Italia captures an entity of proportions that are difficult to process. Total assets: $191,767,741,495. Total liabilities: $183,535,531,717, of which $183,438,487,810 represents digital tokens issued — i.e., the USDT held in 84.5 million wallets worldwide. Excess reserves: $8,232,209,778 — an all-time record. Net profit for Q1 2026 alone: $1.04 billion.

Inside those $191 billion sit $141 billion in US Treasury bills, direct and indirect, making Tether the seventeenth-largest global holder of US T-bills. Ahead of Germany. Ahead of South Korea. Then approximately $20 billion in physical gold, approximately $7 billion in Bitcoin, and the remainder in cash and diversified investments.

None of these numbers are contested. BDO Italia has been certifying them quarterly since 2022. The issue — the one regulators have been raising for years — is that a "quarterly attestation" is not the same thing as an "annual audit." BDO photographs the reserves at a specific point in time. A full annual audit examines how transactions were recorded across twelve months, evaluates whether internal controls function as claimed, and assesses the quality of governance systems on a continuous basis. The two instruments are structurally different.

In its May 1, 2026 attestation, BDO included a sentence worth reading carefully: "During the quarter, the audit process formally commenced." KPMG's audit began in Q1 2026. But it is being conducted by KPMG, not BDO. BDO continues to attest the reserves; KPMG is examining something different — the financial statements, internal controls, governance. No completion date has been communicated. No timeline has been announced.

Twelve years without an auditor who lasted: the complete history

Understanding what the KPMG engagement means requires tracing what came before it. The history of Tether's auditors is short. And it always ends the same way.

2017 — Friedman LLP. Tether engages Friedman LLP as its first certified auditor. The relationship lasts less than a year. In January 2018, the two parties announce a "mutual" end to the relationship. No full audit is ever released. Subsequently — not specifically for the Tether engagement but for conduct identified in other work during the same period — the SEC fined Friedman LLP $1.5 million for "improper professional conduct" in audits conducted between 2017 and 2020.

During that same period, the Commodity Futures Trading Commission was conducting its own investigation. In 2021, as part of a settlement that resulted in a $41 million fine, the CFTC documented in detail the state of Tether's reserves between 2016 and 2018: Tether "held sufficient fiat reserves to back USDT tether tokens in circulation for only 27.6% of the days" in that period. Fewer than one day in four, reserves were sufficient to cover all outstanding tokens. Tether has described these findings as "old news" and pointed to the radical improvement since then. The point remains: these are the conditions under which the world's most widely used stablecoin grew during its foundational years.

April 2019 — The $850 million gap. The New York Attorney General published documents showing that Bitfinex — the exchange historically tied to Tether — had used Tether reserves to cover $850 million in client funds that had disappeared through the payment processor Crypto Capital Corp. Tether and Bitfinex settled with the NYAG in February 2021 for $18.5 million, without admitting wrongdoing.

October 2021 — Bloomberg Businessweek, "The Tether Mystery." The Bloomberg Businessweek investigation revealed that Tether's reserve portfolio included billions in commercial paper issued by Chinese companies — including during the Evergrande crisis — and crypto-collateralized loans made to companies such as Celsius, which collapsed in 2022. John Betts, former CEO of Noble Bank where Tether held its accounts, was quoted with a characterization that became a reference point: "This isn't a stablecoin; it's a high-risk offshore hedge fund." Bloomberg also reported that the Department of Justice had sent letters to Giancarlo Devasini and other executives identifying them as potential "targets" of a bank fraud investigation. That investigation — as far as is publicly known — never produced indictments.

2022–2025 — The BDO attestations. From 2022 onward, Tether began publishing quarterly attestations signed by BDO Italia. A step forward from the preceding silence, recognized as such by the market, but still not a full audit. For an entity managing $190 billion that processes more than 73% of all stablecoin transactions globally, the absence of a certified annual audit has remained — throughout all these years — one of the most conspicuous anomalies in global finance.

Cantor Fitzgerald and the banker who went to government: what the Senate wants clarified

Any analysis of the timing of the KPMG audit that ignores Howard Lutnick misses the central point of the story.

In 2021, Cantor Fitzgerald — the investment bank where Lutnick served as CEO — became the first major US financial institution to work officially with Tether, taking on the role of custodian for the Treasury bills that form the core of its reserves. Bloomberg has documented that Lutnick personally examined Tether's books before accepting the arrangement. Since 2021, nearly 99% of Tether's T-bill reserves have flowed through Cantor.

In April 2024, Cantor invested $600 million in Tether through convertible bonds, acquiring approximately a 5% stake in the company. In November 2024, Donald Trump won the presidential election. Lutnick led the transition team. In February 2025, Brandon Lutnick (28 years old), Howard's son, became CEO of Cantor Fitzgerald. In October 2025, as required for ethics compliance, Howard Lutnick formally transferred his Cantor stake to his children.

What Bloomberg revealed on March 18, 2026 — in an article that immediately prompted Senate reactions — was the full picture: simultaneously with the transfer of Cantor to his children, Tether had reportedly made an undisclosed loan to "Dynasty Trust A," identified as the trust of Howard Lutnick's four children, secured against "all assets" including the convertible bonds representing the 5% Tether stake. If Tether reached the $500 billion valuation that Ardoino has cited as a target for a potential IPO, that stake would be worth $25 billion.

On April 30, 2026, Senators Elizabeth Warren (Massachusetts) and Ron Wyden (Oregon) wrote to Lutnick, now US Secretary of Commerce, demanding documents related to the loan. The letter is a public document. Its language is direct: "We want to ensure that Tether has not sought to bribe or otherwise exert control or influence over Secretary Lutnick." And: "This document raises questions about whether Tether may have helped provide Secretary Lutnick's children with the capital needed to purchase their father's stake in Cantor Fitzgerald."

Professor Kathleen Clark of Washington University, quoted by Bloomberg, summarized the legal problem: "This transaction was theoretically supposed to eliminate conflicts of interest, but in reality, it created new ones."

The senators also noted in their letter that the GENIUS Act — signed by Trump on July 18, 2025 — included provisions containing "provisions favorable to foreign stablecoin issuers" while Lutnick was a member of the White House Digital Asset Working Group that helped shape the legislation. Both Cantor and Tether had lobbied in favor of the bill.

The four forces behind the KPMG audit timing

The KPMG engagement is not the product of a sudden conversion to transparency. It is the result of four distinct pressures converging within the same narrow window of time.

1. The GENIUS Act — January 2027 deadline. The Guiding and Establishing National Innovation for U.S. Stablecoins Act, signed by Trump on July 18, 2025 and effective January 18, 2027, requires all stablecoin issuers with more than $50 billion in circulation to undergo annual financial statement audits by a PCAOB-registered firm, plus a separate internal controls audit. Tether, with $183 billion in USDT outstanding, exceeds that threshold by nearly four times. The alternative to compliance is not manageable: without it, the Treasury Department can prohibit all US exchanges from listing USDT. That is the end of the US market for Tether.

2. The $15–20 billion equity raise. Ardoino has publicly stated the intention to raise between $15 and $20 billion at an implied valuation of $500 billion — one of the largest potential private capital operations in crypto history. No serious institutional investor commits at that valuation without financial statements signed by a Big Four firm. The KPMG audit is the minimum prerequisite to opening that table.

3. Senate scrutiny. The Warren-Wyden letter of April 30, 2026, in the context of the Lutnick nexus, raised the level of political scrutiny on Tether in Washington to a level that had no precedent. In that environment, a Big Four audit is also a positioning move: demonstrating good faith to legislators before Congress decides to act with more binding instruments.

4. USAT — the plan B already in operation. On January 27, 2026, Tether launched USAT through Anchorage Digital Bank, the only federally chartered crypto custody bank in the United States. USAT is attested by Deloitte, not BDO. Cantor Fitzgerald is already its reserve custodian — mirroring USDT's structures inside a container designed to be GENIUS Act-compliant. The construction of USAT, completed three months before the KPMG announcement, was not accidental: it demonstrates that Tether had developed a bifurcated strategy before making its auditor choice public.

The two-coin strategy: USAT as a ring fence for USDT

The GENIUS Act's fundamental problem for Tether is geometric. The law requires payment stablecoins to hold reserves exclusively in dollars, US Treasury securities, and equivalent liquidity instruments. It explicitly prohibits holding gold and Bitcoin as reserves for payment stablecoins.

Tether holds approximately $20 billion in physical gold and approximately $7 billion in Bitcoin — a total of $27 billion in assets that the GENIUS Act would make incompatible with GENIUS Act-compliant payment stablecoin status. Those $27 billion are not idle deposits: they are the source of the excess yield that generates the majority of Tether's approximately $10 billion in annual profits. Liquidating them to achieve GENIUS Act compliance would effectively destroy the business model.

USAT resolves this problem elegantly. It is a separate entity, issued through a US federal bank, holding only T-bills in reserves, attested by Deloitte, operating within the regulatory perimeter the GENIUS Act establishes for the US market. USDT — the global $183 billion brand — remains separate, offshore, continuing to serve the emerging markets where demand for a "digital dollar" has structural drivers that do not depend on compliance with any US law: Argentina (inflation above 250%), Turkey, Nigeria, Vietnam.

As Forbes wrote on May 27, 2026: "USAT is a ring fence. A GENIUS Act-compliant subsidiary built precisely so that the $183 billion in USDT can remain offshore indefinitely."

The strategy is internally consistent. Whether it will survive regulatory scrutiny — specifically, whether the Treasury and OCC will accept El Salvador (where Tether is registered) as a "comparable jurisdiction" for GENIUS Act purposes — is a political and regulatory question that no Big Four audit resolves.

Why KPMG didn't want to be named — and what that signals

Tether's March 24, 2026 press release was unusual. It was detailed, cited CFO Simon McWilliams at length — "The Big Four Firm was selected through a competitive process because the organisation is already operating at Big Four audit standard; the audit will be delivered" — noted that "several audit firms conducted comprehensive assessment" before the final selection, and framed the engagement as historic. Every word appeared crafted to signal rigor and credibility. The firm's name was missing.

Three days later, the Financial Times published it: KPMG. The source was anonymous persons, not Tether or the firm itself.

Ledger Insights — a publication specializing in enterprise blockchain and digital assets — dedicated specific analysis to the omission, advancing a thesis that deserves attention: the anonymity was a request from KPMG, not from Tether. The operational logic of major audit firms is well established: when accepting a mandate with a client carrying a complex regulatory history — SEC-fined auditor, CFTC settlement, DOJ investigation, four auditor changes in twelve years — it is preferable not to have the firm's name circulating publicly before the fieldwork is complete. If material irregularities emerged during the examination, the firm could withdraw without the market having already associated its brand with the outcome. Once the audit is complete with a definitive opinion, the name can be disclosed without ambiguity.

If this interpretation is correct, the original anonymity is not a communications strategy detail. It is a signal that KPMG approached the mandate with caution proportionate to the client's history.

It is not the first major firm to exercise caution with Tether. During 2025 and the early months of 2026, PricewaterhouseCoopers was separately engaged for an "audit readiness" mandate — preparing Tether's accounting systems and internal controls before KPMG began its own work. This type of engagement is standard practice when a company needs to rapidly close documentation and governance gaps before submitting to a formal examination.

Simon McWilliams had been hired precisely for this moment. Appointed CFO on March 3, 2025, with a curriculum explicitly citing "over 20 years of experience leading large investment management firms through rigorous audits," McWilliams replaced Giancarlo Devasini — Tether's co-founder and CFO since 2014, referenced in the 2021 DOJ reporting as a potential "target" in a bank fraud investigation — who transitioned to the role of Group Chairman. The executive transition, the PwC audit readiness engagement, the KPMG announcement: the sequence was constructed with industrial logic across exactly twelve months, March 2025 to March 2026.

Silence before the US Senate

May 13, 2026 was the deadline Warren and Wyden had specified in their April 30 letter. They were asking Lutnick to produce documents related to the Dynasty Trust A loan, correspondence between Tether and his office during the development of the GENIUS Act, and any documentation on his participation in the Digital Asset Working Group. The letter also explicitly requested disclosure of any identified conflicts of interest in the legislative process.

As of the date this article was written, no substantive public response has been provided by Tether or the Department of Commerce. The Department issued a generic statement about Lutnick's compliance with his ethics obligations. Tether did not comment on the senators' specific questions.

It is not unlawful to decline to respond to a senators' letter: lawmakers can ask, but cannot compel without issuing a subpoena through formal committee proceedings. The silence, however, carries specific weight in a context where the GENIUS Act — the law governing Tether's future in the US market — was passed while Tether's principal banker occupied a position of central influence in the administration that signed it.

In the meantime, Tether's expansion continued without interruption. May 18, 2026: investment in LemFi, a remittance platform for sub-Saharan Africa. May 20, 2026: acquisition of SoftBank's stake in 21 Capital, achieving full control of the Bitcoin treasury company. May 25, 2026: agreement with the government of Georgia to issue GEL₾, a stablecoin pegged to the Georgian Lari. Three expansion operations in eight days, while KPMG worked through the books and the US Senate waited for a response.

What changes — and what remains open — with the KPMG audit

Assume KPMG completes the audit and issues an unqualified opinion. What would that mean concretely for the market and for investors?

It would mean that, as of the audit date, Tether's financial statements fairly represent the company's financial position under applicable accounting standards, that internal controls function as described, and that there are no material irregularities in the accounting. For the first time in twelve years, there would be a document signed by a globally reputable firm attesting to this. That would be significant — different from everything that came before.

It would not resolve several structural questions that remain open. A positive KPMG opinion does not respond to the Warren-Wyden letter about the Dynasty Trust A loan — that is a question about potential political conflicts of interest, not accounting accuracy. It does not answer whether USAT will be qualified as GENIUS Act-compliant by the Treasury and OCC, or how El Salvador's regime will be classified under the law. It does not answer what would happen to USDT if a future administration with different priorities decided that the current arrangement was insufficient.

The audit is necessary. It is not sufficient. And the market — judging from the fact that USDT continues operating with $183 billion in circulation and a 73% stablecoin market share — already knows this.

FAQ: Tether, KPMG and the GENIUS Act

This article is for journalistic and informational purposes only and does not constitute financial or legal advice. Primary sources: BDO Italia Q1 2026 attestation (May 1, 2026), CFTC order 2021, Bloomberg (March 18, 2026), Financial Times (March 27, 2026), Senate Banking Committee letter (April 30, 2026), Ledger Insights analysis (March 2026), Forbes (May 27, 2026), Tether press release (March 24, 2026), Reuters (March 3, 2025). For stablecoin and crypto regulation in Europe, see our MiCA-compliant exchange guide and MiCA compliance tracker.