MHA Cayman’s Latest Attestation Report ‘Going Concern’ Indicating Significant Uncertainty of Stablecoin
The post MHA Cayman’s Latest Attestation Report ‘Going Concern’ Indicating Significant Uncertainty of Stablecoin appeared first on Coinpedia - Fintech & Cryptocurreny News Media| Crypto Guide
Tether’s Q1 2022 assurance report shows that Tether has reduced its commercial paper in its USDT reserves by 16.8%, after a week of its loss of 1:1 peg with the U.S dollar.
Tether’s $82 billion reserves were 86% cash and cash equivalents, the rest includes $4 billion in corporate bonds, $3 billion in secured loans, and $5 billion in other investments like cryptocurrencies, according to the report of March 31, 2022.
The recent research of March 31 also reveals that $83 billion in assets of Tether were in potentially illiquid instruments, including commercial paper and certificates of deposit, money market funds, secured loans, corporate bonds, and more.
Tether’s accounting firm MHA Cayman, responsible for Tether’s audit report, adds new accounting language such as ‘going concern’. which indicates the significant uncertainty about the valuation of Tether’s assets and the counterparty risks they face.
Tether has undergone a sharp contraction since the MAY 9/10 collapse of the Terra stablecoin, with assets Tether dropping from $83bn on May 11 to $73bn on May 21. which was almost $10bn loss of Tether in just ten days.
The latest attestation report released on May 18, related to Tether assets and liabilities of March 31st. MHA Cayman, an accountant added a new language, suggesting uncertainty about future prospects of stablecoin using the language as ‘going concern’.
Going concern is a form of words that implies a business is still stable enough and can meet its obligations for the time being.
MHA Cayman stated that:
“The going concern assessments require significant management judgment with regards to the [Tether] Group’s liquidity, market, and credit risks. we do not provide any assurance in respect of such assessment.”
The latest attestation report provides the information about providing no provisions for the credit losses made by Tether’s management on the reporting date. as in the earlier attestation, the accountant has mentioned that loans were valued at fair value.
Further Tether has repeatedly promised an audit but has failed to produce one, so far. In the month of July, the stablecoin’s general counsel promised an audit within a month. Last week Elizebeth Warren, a senator in Massachusetts, also called for a cryptocurrency crackdown. where she has criticized the lack of protections for ordinary investors.
Adding to this she has called out Tether for its lack of disclosure, In her remarks to the US Senate Banking Committee.
Asking: “Why don’t they want investors to know what is and what is not backing up this so-called stablecoin? That is a gigantic red flag,” She added.
Text source: Coinpedia – Fintech & Cryptocurreny News Media| Cr
