Circle has announced that it has contracted an independent accounting firm, Grant Thornton LLP, to verify and issue attestation reports of the dollar reserves that Circle maintains to back the USDC token and is expected to continue doing this verification on monthly basis. According to the findings of Grant Thornton, Circle actually has about $4,000 more than it has issued in tokens in its accounts backing USDC. From their post:
The report states that as of October 31, 2018 at 11:59 PM UTC:
USD Coin (“USDC”) tokens issued and outstanding = 127,408,827 USDC
US Dollars held in custody accounts = $127,412,240.89
Grant Thornton notes that they have conducted their review in accordance with standards of accounting. According to the report published by Grant Thornton, the examinations was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants which requires the examiners to plan and perform the examination to obtain reasonable assurance about whether the Reserve Account Information in the accompanying Reserve Account Report is correctly stated, based on the criteria set forth in the Reserve Account Report, in all material respects. The nature, timing, and extent of the procedures are selected by examiners depending on their judgment which includes an assessment of the risks of material misstatement of the Reserve Account Information be it due to fraud or error.
An extract from official report by Grant Thornton states “In making an assessment of the risks of material misstatement, we considered and obtained an understanding of internal control relevant to the preparation of, and the Reserve Account Information in, the accompanying Reserve Account Report in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of such internal control. Accordingly, no such opinion is expressed. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion”, concluding that the information shared by Circle is correct and that in their opinion, In our opinion, the Reserve Account Information in the accompanying Reserve Account Report as of October 31, 2018 at 11:59 PM UTC is correctly stated, based on the criteria set forth in the Reserve Account Report, in all material respects.
Circle has now joined Paxos Standard and Gemini Dollar in conducting monthly attestation reports and each of these reports from circle will be verified by Grant Thornton on regular basis. Such assessments are important because a third-party accounting firm would be the first to throw up red flags if any were to be thrown up. Investors want to be sure that when they hold a stablecoin, it is worth what it’s supposed to be worth rather than nothing as a result of malfeasance at the behest of the issuer. It is a sign of health that the three new stablecoins are setting this standard and moving forward it should be expected that all stablecoins will adhere to it.