USDT is the largest stablecoin in circulation, with roughly $189.5B outstanding as of May 2026 (DeFiLlama). It has held its $1 peg for over a decade across multiple market crashes, exchange collapses, and one brief 2022 wobble. But "biggest" is not the same as "safest," and Tether's history with regulators and auditors is genuinely complicated. This article walks through what backs USDT, what the attestation reports do and don't tell you, the 2021 CFTC and New York Attorney General settlements, why USDT is being delisted by European exchanges in 2025–2026, and what could realistically go wrong. The goal is a balanced read: not a defense, not a hit piece, just what the public record says.
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For short-to-medium holding periods and trading collateral, USDT has been operationally safe — it has redeemed at or near $1 for ten-plus years across $189B in supply. The material risks are regulatory (not reserve-based): EU delistings under MiCA, US treatment under the GENIUS Act, and the lingering question of why Tether has never produced a full Big Four audit.
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According to Tether's most recent quarterly attestation from BDO Italia, the reserves backing USDT are dominated by US Treasury bills, with smaller allocations to secured loans, Bitcoin, gold, and other investments. The mix Tether publishes on tether.to/transparency typically looks like this:

Reported "excess reserves" — assets above the dollar value of USDT in circulation — have been in the $5–7B range across recent attestations. On paper, that means Tether claims more than 100% backing. The question is how much you trust the paper.
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This is the single biggest point of confusion in USDT coverage. Tether publishes quarterly attestation reports from BDO Italia. It has never produced a full audit from a Big Four firm (Deloitte, EY, KPMG, PwC). The two are not the same thing:

Tether has said publicly that Big Four firms have been reluctant to take it on because of perceived reputational and regulatory risk in the broader crypto sector. Whatever the reason, the result is the same: USDT holders rely on point-in-time confirmations from a mid-tier firm rather than a continuous audit opinion. USDC, by comparison, publishes monthly attestations from Deloitte and is moving toward a full audit as part of Circle's post-IPO reporting cycle.
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In October 2021, the US Commodity Futures Trading Commission fined Tether $41 million for making "untrue or misleading statements" about its reserves between June 2016 and February 2019. The CFTC order found that Tether had claimed USDT was fully backed by US dollars when, for significant portions of that period, the reserves included unsecured receivables and non-cash assets.
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Earlier in 2021, the New York Attorney General settled a separate investigation with Tether and Bitfinex for $18.5 million. The settlement covered the same window and additionally barred Tether and Bitfinex from doing business with New York residents going forward. Tether did not admit wrongdoing in either settlement but agreed to publish quarterly reserve breakdowns — which is the regime still in place today.
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The takeaway: Tether's current transparency program exists because regulators forced it. That doesn't mean today's reports are wrong. It does mean the company has a documented history of mischaracterizing its reserves, and the only reason holders have visibility now is enforcement action.
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Tether stopped issuing USDT to US-based customers and exited most US-facing business in 2023, consistent with its NY AG settlement obligations. In 2025, the European Securities and Markets Authority (ESMA) finalized stablecoin rules under MiCA (Markets in Crypto-Assets), and Tether did not pursue an EU e-money or asset-referenced token license. European exchanges — including Binance, Kraken, Coinbase EU, and Crypto.com — began delisting USDT spot pairs for EU users through late 2024 and 2025.
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In the US, the GENIUS Act of 2025 created a federal framework for "payment stablecoins" requiring 1:1 reserve backing in HQLA, monthly attestations, and either federal or state regulator oversight. Tether has not signaled it intends to register as a US payment stablecoin issuer. The practical effect: USDT remains the dominant offshore stablecoin while USDC and PYUSD operate inside the US perimeter.
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Yes, briefly. The most notable incident was in May 2022 during the Terra/Luna collapse, when USDT traded as low as roughly $0.95 on some venues for several hours before snapping back to $1. CoinDesk and Kaiko both documented the dislocation. Smaller intraday wobbles (a few cents) have appeared during exchange outages and crypto-wide deleveraging events. Across ten-plus years, the peg has held in aggregate — but holders should not assume zero volatility, particularly during stress events when redemption queues lengthen.
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The realistic risk scenarios, in rough order of probability:

Neither is risk-free. USDC carries banking-rail risk (the SVB episode was a US-banking failure, not a USDC failure). USDT carries regulatory-tail risk and the attestation-vs-audit gap. For US and EU users with regulatory exposure, USDC is the cleaner choice. For global trading and emerging-market dollar access, USDT remains the dominant rail.
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USDT's track record is real: ten-plus years at peg, $189B in circulation, dominant share in offshore crypto trading and emerging-market remittances. The reserve mix today is conservative by historical standards. The remaining risk is concentrated in two places: the absence of a Big Four audit and the regulatory squeeze in the EU and US. For traders and short-term holders, USDT is operationally safe. For long-duration savings or large balances, diversifying between USDT, USDC, and bank dollars is the prudent move. See support/en/articles/15082537 for the head-to-head and support/en/articles/15082534 if you're deciding where to acquire it.
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USDT supply from DeFiLlama stablecoins API (May 2026 snapshot). Reserve composition from Tether's transparency page (tether.to/transparency) and BDO Italia Q1 2026 attestation. Enforcement history from CFTC press release "CFTC Orders Tether and Bitfinex to Pay Fines Totaling $42.5 Million" (October 15, 2021) and NY AG press release "Attorney General James Ends Virtual Currency Trading Platform Bitfinex's Illegal Activities in New York" (February 23, 2021). MiCA stablecoin rules from ESMA published technical standards (2024–2025). US GENIUS Act text via Congress.gov. Depeg event coverage from CoinDesk and Kaiko market reports (May 2022, March 2023).
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