Tether CEO Paolo Ardoino launched a scathing attack on S&P Global Ratings Wednesday after the agency downgraded the USDT stablecoin to its lowest possible stability score.
S&P cut Tether’s rating from “4 (constrained)” to “5 (weak),” citing rising risk in its reserves. Ardoino fired back on X, dismissing the assessment as a desperate move by a “broken” traditional financial system.
The Downgrade: Bitcoin Exposure
The conflict centers on Tether’s balance sheet. S&P’s report flagged that Bitcoin now comprises approximately 5.6% of USDT’s reserves. This exceeds the company’s stated 3.9% overcollateralization buffer.
The agency warned that a sharp drop in Bitcoin or gold prices could leave the stablecoin undercollateralized. S&P also criticized “persistent gaps in disclosure” regarding custodians and counterparties.
Ardoino rejected the premise entirely. He claimed Tether is the “first overcapitalized firm in the financial industry” and holds no toxic assets. His argument? Traditional metrics fail to capture the solvency of a digital-native issuer.
Market Reaction
Traders ignored the warning. USDT held its peg, trading at $1.00 at press time with a market cap of $184 billion.
The downgrade highlights a widening rift. Regulators and legacy agencies demand bank-like transparency; crypto natives view these demands as tools of suppression. For now, the market sides with Ardoino—liquidity remains deep, and redemptions are processing normally.
S&P stated the rating could improve if Tether reduces risk exposure. Ardoino’s response suggests that won’t happen anytime soon.
