S&P Global recently downgraded the stability rating of USDT, the world’s largest stablecoin, to the lowest level, once again triggering a fresh wave of market skepticism toward Tether. Tether CEO Paolo Ardoino responded that the rating completely ignored the group’s capital structure, while former Citigroup analyst Joseph Ayoub stressed that Tether is enormously profitable — essentially a money-printing machine that is virtually impossible to bankrupt.

S&P Downgrades USDT Rating: Bitcoin and Gold Holdings Raise Concerns

Last week S&P Global announced it was downgrading USDT’s ability to maintain its dollar peg to the lowest grade “weak”, specifically pointing out that Tether’s reserves contain Bitcoin and gold — highly volatile assets — while traditional stablecoins rely primarily on highly liquid instruments such as U.S. Treasuries, thereby weakening the robustness of the dollar peg.

The move immediately sparked FUD in the market and prompted renewed scrutiny of Tether’s asset transparency and risk profile.

Paolo Strikes Back: “Not Considering the Additional $30 Billiob Group Equity Nor the ~500M In Monthly Base Profits Generated by U.S Treasury yields”

Tether CEO Paolo Ardoino hit back today, stating that S&P’s analysis overlooked the overall capital structure of the Tether Group. Citing the Q3 audit report released this year, he noted that Tether currently has:

Tether Group total assets: $~215B

Stablecoin liabilities: $~184.5B

Excess Equity: $~7B (on top of the ~184.5B stablecoin reserves)

Retained Earnings: $~23B

“S&P made the same mistake of not considering the additional Group Equity nor the ~500M in monthly base profits generated by U.S Treasury yields alone.”

He also took a subtle jab at BitMEX co-founder Arthur Hayes, who spread FUD yesterday: “Some influencers are either bad at math or have the incentive to push our competitors.”

Arthur Hayes Doubles Down, Reiterates Transparency Concerns

Unsurprisingly, Arthur Hayes wasn’t buying it. In his reply he reiterated the points from his article yesterday, acknowledging that Tether is indeed highly profitable but insisting the core problem remains the high volatility of some of its assets.

Hayes wrote yesterday that if Tether aggressively buys Bitcoin and gold to offset the shrinking Treasury interest income as rates fall, the company would become extremely vulnerable in a major market correction.

Former Citi Analyst Defends Tether: “They Own A Money Printing Machine.”

Former Citigroup digital assets analyst Joseph Ayoub jumped in to back Tether and rebutted Hayes for missing crucial context. Ayoub said he has spent hundreds of hours researching Tether and stressed that the publicly disclosed reserves are not the full picture of the group’s assets.

He offered three key observations:

𝐓𝐡𝐞𝐢𝐫 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐞𝐝 𝐚𝐬𝐬𝐞𝐭𝐬 =/ 𝐚𝐥𝐥 𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐚𝐬𝐬𝐞𝐭𝐬 — Tether’s actual corporate assets are far larger than publicly disclosed — the published figures are only the ledger that backs USDT 1:1; the company also owns equity investments, mining operations, corporate cash reserves, additional undisclosed BTC, historical profits, etc.

𝐓𝐡𝐞𝐲’𝐫𝐞 𝐡𝐢𝐠𝐡𝐥𝐲 𝐩𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐥𝐞 𝐚𝐧𝐝 𝐭𝐡𝐞𝐢𝐫 𝐞𝐪𝐮𝐢𝐭𝐲 𝐢𝐬 𝐯𝐚𝐥𝐮𝐚𝐛𝐥𝐞. 𝐓𝐡𝐞𝐲 𝐜𝐚𝐧 𝐬𝐞𝐥𝐥 𝐞𝐪𝐮𝐢𝐭𝐲 𝐭𝐨 𝐜𝐨𝐯𝐞𝐫 𝐚𝐧𝐲 𝐠𝐚𝐩𝐬 𝐢𝐧 𝐭𝐡𝐞𝐢𝐫 𝐛𝐚𝐥𝐚𝐧𝐜𝐞 𝐬𝐡𝐞𝐞𝐭. — its $120 billion in Treasuries alone generate several billion dollars of base profit per year. With fewer than 150 employees, it is one of the most efficient cash-generating businesses on earth. Previous financing rounds suggested an enterprise value between $50 billion and $100 billion.

Tether’s reserves are actually safer than those of banks — banks typically hold only 5–15% in highly liquid assets and the rest in illiquid loans, whereas Tether’s reserve structure is healthier. The only difference is that Tether lacks a central bank backstop.

Ayoub’s conclusion was unequivocal: “Tether isn’t going insolvent — quite the opposite; they own a money printing machine.”

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