Tether CEO fires back at S&P Global Ratings following USDT risk warning

Tether CEO Paolo Ardoino blasted S&P Global Ratings for downgrading USDT, rejecting the agency's assessment that the stablecoin is backed by high-risk assets and accusing traditional finance of misunderstanding Tether's model.

Tether CEO rejects S&P's assessment of 'high-risk' USDT reserves

Tether CEO Paolo Ardoino issued a sharp rebuttal to S&P Global Ratings following the agency's downgrade of USDT's peg stability assessment on Wednesday. He described the rating as a sign of "loathing" that the company "wears with pride."

In his statement on X, Ardoino framed the S&P's critique as part of a broader resistance from traditional finance toward companies that operate outside what he called a "broken" system.

"The traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system," Ardoino wrote.

Ardoino maintained that Tether has positioned itself differently, asserting that the company is "the first overcapitalized firm in the financial industry" and emphasizing that its reserves contain no "toxic" assets. 

He further claimed that Tether's continued profitability challenges long-standing assumptions in traditional finance, suggesting that the sector's discomfort stems from a fear of a model that operates independently of conventional banking structures.

"Tether is living proof that the traditional financial system is so broken that it's becoming feared by the emperors with no clothes," he added.

Ardoino's statement follows the S&P Global Ratings report, which downgraded USDT's peg stability score to a weak five. The agency said the revision reflects "an increase in higher-risk assets backing USDT's reserve" and cited ongoing "gaps in disclosure" around how those reserves are managed.

S&P noted that Bitcoin (BTC) now makes up about 5.6% of USDT in circulation, a level that exceeds its 3.9% overcollateralization margin. The firm warned that a drop in the value of BTC and other high-risk assets could leave USDT undercollateralized. 

While most reserves are still held in short-term US Treasury bills and cash equivalents, the S&P highlighted weaknesses in transparency. The agency said the rating could improve if Tether reduces exposure to high-risk assets and provides clearer disclosures on reserve composition and counterparties.

Tether's USDT remains the largest stablecoin, with a market capitalization of $184 billion, according to CoinGecko.