Tether, the issuer behind the world’s largest stablecoin USDT, is once again in the spotlight — this time after S&P Global cut its rating to the lowest level on the agency’s stablecoin stability scale.
And as always, the crypto community immediately split into two camps: traditional finance critics versus the “Tether FUD” dismissers.
A Familiar Criticism Returns — With a New Twist
For years, mainstream finance has questioned Tether’s reserve transparency and speculated about potential undercollateralization.
Yet through bull cycles, crypto collapses, and the downfall of industry villains from Sam Bankman-Fried to Alex Mashinsky, USDT has continued to operate without breaking its peg — and has grown into one of the world’s most profitable companies, earning over $10 billion in the first nine months of 2025, rivaling giants like Goldman Sachs.
Still, during a quiet pre-Thanksgiving session, S&P Global downgraded USDT from 4 to 5, the weakest rating on its scale — the same rating agency many blame for failures leading up to the 2008 financial crisis.
While the report included familiar complaints about “opacity,” it added a new concern:
Bitcoin now makes up more than 5% of Tether’s reserves — and further BTC price declines could theoretically pressure collateral levels.
Tether’s Response: Defiant, Unapologetic, and On Brand
Tether CEO Paolo Ardoino was quick to respond:
“We wear your loathing with pride.”
Ardoino argued that traditional finance is threatened by Tether’s success, noting the repeated failures of ratings models:
“The legacy financial propaganda machine is terrified when a company refuses to play by the rules of a broken system. Tether built the first overcapitalized company in finance — with zero toxic reserves.”
He added that Tether’s resilience has become “proof that the old system fears being exposed by the new.”
Investor Advice Sparks a Firestorm
Tech investor Jason Calacanis also jumped into the conversation, offering public “advice” on how Tether could clean up its image:
Sell all bitcoin
Hold only U.S. Treasuries
Complete two U.S.-based audits
This did not go over well.
Bitcoin advocates immediately attacked the logic of asking a company that supports the crypto ecosystem to dump its BTC for government debt—especially since U.S. Treasuries were a key part of the Silicon Valley Bank collapse, where Calacanis loudly called for a full deposit bailout in 2023.
The Audit Question Doesn’t Go Away
Even with the bitcoin debate dismissed by many, the audit issue resurfaced — loudly.
Financial commentator Quoth the Raven, once a gold advocate but now pro-bitcoin, delivered a blunt assessment:
“A company refusing a full, independent audit never means things are pristine. There is only one reason you avoid one — and it’s never a good reason.”
He added:
“If you’re issuing tens of billions in synthetic dollars that support entire markets, an audit is the bare minimum.”
The Bottom Line
S&P’s downgrade didn’t break USDT’s peg and hasn’t slowed its usage — but it did reignite long-standing debates around:
reserve transparency
bitcoin allocation in Tether’s balance sheet
the absence of a full independent audit
Tether remains the dominant stablecoin globally, but the renewed spotlight is a reminder that its success continues to draw both admiration — and relentless scrutiny — from all sides.
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