Reading an Attestation Report Without an Accounting Degree

Attestation reports are written for regulators and lawyers. You can still get what you need from one in about ten minutes.

First, the date

Find the date the holdings were measured, not the date the report was published. These differ, often by weeks.

An attestation describes one moment. It says nothing about the days either side of it, which is the main limitation of the whole exercise.

Second, who signed it

An accounting firm’s name and the word attestation or agreed-upon procedures. Note that this is deliberately not the word audit.

An attestation is the accountant confirming the issuer’s own figures against records provided by the issuer. An audit is a broader examination. Nearly all stablecoin reporting is the former.

Third, the two totals

Tokens in circulation, and total reserve value. The second should exceed the first.

If it does not, that is the headline and nothing else in the document matters. If it exceeds it by a very small margin, note that the reserve can move in a day.

Fourth, what the reserve is made of

A breakdown by asset type. Look for how much is in government debt maturing soon, how much is cash at banks, and how much is in anything else.

The anything else is the interesting part. Corporate debt, loans to affiliates, or other crypto assets all behave differently under stress than treasury bills do.

Fifth, where it is held

Named custodians and banks, or a vague reference to financial institutions. The first is informative and the second is not.

Concentration matters: a reserve entirely at one bank carries that bank’s risk.

What you cannot learn from it

Whether redemption works at scale. Whether the issuer can sell the holdings quickly. What happened between report dates.

These are the questions that decide a peg break and no attestation answers them.

What to do with the conclusion

If the reporting is clear, frequent and signed by a recognisable firm, that is about as much comfort as this market offers. If it is annual, vague or unsigned, treat the token as a trading instrument rather than as money.

Then separate the two risks: the token and the venue. Somewhere the redemption path is written down handles the first, and Collect & Exchange under supervision handles the second. Exchanges that state which chain they settle on are usually the ones keeping both sets of records properly.