Tether

The long-running question about USDT is not whether it gets hacked but whether it is fully backed. For years Tether disclosed little about what stood behind the token, which fed persistent doubt about the reserves. Since 2021 it has published quarterly attestation reports from the accounting firm BDO, which show reserves now weighted heavily toward US Treasury bills alongside cash and other assets. An attestation is a point-in-time report rather than a full audit, and critics still press Tether for a complete audit, but the disclosure is far greater than it once was.

USDT has slipped below a dollar briefly during market panics and then recovered each time, and Tether has continued to process redemptions at scale. As with any stablecoin, holding USDT means trusting the issuer to hold adequate reserves and honour redemptions — it is a claim on Tether, not an insured deposit.

Tether's most-cited controversies are two 2021 regulatory settlements, both about how it described its reserves in earlier years — not thefts of customer funds. In February 2021 Tether and the affiliated exchange Bitfinex settled with the New York Attorney General for $18.5 million, ending an investigation into reserve and disclosure practices; the companies neither admitted nor denied the findings. In October 2021 the US Commodity Futures Trading Commission ordered Tether to pay a $41 million penalty, finding that its reserves had not been fully backed by fiat at all times during a sample period; again without an admission of wrongdoing.

These are transparency and regulatory matters that shaped how Tether now reports reserves. They are distinct from a custodial hack: the issuer itself has not had customer funds stolen in a breach, which is why the incident record below is empty.