Tether CEO Fires Back at S&P Downgrade: ’USDT Is Stronger Than Wall Street Thinks’

Tether's CEO just threw a punch at S&P Global Ratings—and Wall Street is watching.

The credit agency slapped a controversial downgrade on the stablecoin giant, questioning its transparency and risk profile. Standard procedure for traditional finance, maybe. But in the crypto world? It's a declaration of war.

The Rebuttal: Numbers Don't Lie

Tether's leadership didn't mince words. They called the report "flawed" and pointed to their mountain of U.S. Treasury holdings—billions worth—as proof of stability. Their argument is simple: while S&P talks about theoretical risks, Tether's reserves are sitting in the most liquid market on Earth.

Beyond the Rating: The Real Battle

This isn't just about one report. It's a clash of philosophies. Traditional ratings agencies built their models on corporate debt and sovereign bonds. Crypto assets, especially algorithmic and reserve-backed stablecoins, break those models. The old guard sees uncertainty; the new guard sees outdated methodology.

The Cynic's Corner

Let's be real—this is the same industry that gave mortgage-backed securities AAA ratings in 2007. A little skepticism toward their crypto report cards seems warranted.

The market's verdict? USDT's peg held firm. While analysts debate spreadsheets, users keep transacting. In the end, that might be the only rating that truly matters.

S&P Downgrades USDT, Tether Responds

S&P Global issued this downgrade on “peg-stability” on November 26, when S&P Global lowered the peg-stability level of USDT from 4 (“constrained”) to 5 (“weak”); this is the lowest level in S&P Global’s ranking of 1-5. Tether has increased its exposure in “high-risk” assets such as “Bitcoin, gold, corporate bonds, private loans, and other investments.”

Note that this is only the second downgrade for USDT since March 2025 and comes despite USDT having the strongest possible history of keeping the peg despite several industry shocks. Analysts were immediately concerned about this downgrade and indicated that this may go on to further cloud confidence in this stablecoin that supports billions of liquidity in this industry every day.

Ardoino rejected S&P’s analysis, saying that it failed to factor in Tether’s actual strength in the financial domain. He highlighted that in Q3 of 2025, Tether had excess equity of $7 billion, additional reserves of around $184.5 billion, retained earnings of $23 billion, and another secondary buffer of reserves of $7 billion.

Ardoino further observed that the organization failed to factor in Tether’s Core income-generating aspect, which is the yield on U.S. Treasury bonds. In light of the large amount of short-term bonds that it holds, it is evident that Tether makes about $500 million monthly, and this amount keeps rising as it invests more reserves in those bonds.

He also added that in the S&P report, it had failed to look at the nature of Tether Group itself, as it is a multi-division operation that earns money from different arms.

Tether Reserve Debate Intensifies Again

The delisting has reopened several debates about Tether’s reserves and whether the corporation may be over-exposed to such non-traditional markets as Gold or bitcoin.

Some points made about this are that the founder of BitMEX, Arthur Hayes, believes Tether may be building exposure to each of the assets. Also, Hayes goes on to say that if gold or Bitcoin were to decline dramatically, for instance by 30%, Tether may face problems in terms of absorbing such declines.

The Tether folks are in the early innings of running a massive interest rate trade. How I read this audit is they think the Fed will cut rates which crushes their interest income. In response, they are buying gold and $BTC that should in theory moon as the price of money falls.… pic.twitter.com/ZGhQRP4SVF

However, some other experts countered this theory. Joseph Ayoub, a former senior digital asset analyst at Citi, explained that he has personally analyzed Tether’s books in considerable depth and that, in his view, Tether is in much better financial shape than many critics give it credit for.

I spent 100’s of hours writing research on tether for @Citi. @CryptoHayes missed a few key points.

1) 𝐓𝐡𝐞𝐢𝐫 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐞𝐝 𝐚𝐬𝐬𝐞𝐭𝐬 =/ 𝐚𝐥𝐥 𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐚𝐬𝐬𝐞𝐭𝐬

When tether generates $ they have a separate equity balance sheet which they don’t… https://t.co/pHSRr245Up

Ayoub drew attention to the fact that Tether holds more in reserves than it owes out, and that many areas of Tether’s balance sheets are not accurately captured in ledgers or in descriptions of them that are released to the public. Ayoub further observed that Tether accrues billions of dollars in interest income each year and yet employs only eight people.

Ayoub further added that, in his opinion, Tether is better capitalized than most of the world’s banks.