Stablecoin Issuer Promises Full Audits of Euro-Backed Crypto Token

Stasis, a Malta-based issuer of stablecoins, has hired accounting firm BDO Malta to conduct quarterly and annual audits of its financials, including the euro reserves backing the startup's EURS token.

More than a year ago, Tether reiterated its promise of regular audits to prove it held sufficient fiat collateral, but so far it has still not delivered.

In addition to the audits, BDO Malta - a member of the BDO International network of accounting firms, which operates out of more than 160 countries according to its website - will "Provide weekly cash reserve verification" of the fiat collateral behind EURS, Stasis said.

Michael Shaub, who teaches auditing and accounting ethics at Texas A&M University, told CoinDesk that "I would take much more heart" from a full audit of a stablecoin provider's financials, as opposed to a verification or attestation.

Explaining the differences between verifications, attestations and audits, Shaub said that an audit "Is applied broadly to the financial statements" - including income statements, cash flow statements and balance sheets - while an attestation "Is limited to some narrow representation," for example, that the requisite bank deposits existed at a moment in time.

In a verification, the firm in question and its accountant decide on a procedure, and the accountant carries it out as agreed; that contrasts with the rigorous standards an attestation or audit requires.

Stasis' promised audits - the first is expected in Q1 2019 - are all the more notable since some issuers, and not just Tether, have claimed that audits are currently unobtainable in the stablecoin market.

Cameron Winklevoss, Gemini's co-founder and president, said on Twitter in October that "There is no financial report framework to audit conformity [with] a stablecoin. So you can't perform an 'audit.'".

According to a Statis spokesperson, "BDO Malta will perform full audits once a quarter, plus verifications every week."

When contacted by CoinDesk, Sam Spiridonov, the audit partner at BDO Malta who signed Stasis' first weekly verification, said the "Audit will cover all the financial statements of STSS Limited, including the euro deposits."