So outdated and crusty are issues that Tether is both not being upfront concerning the reserves backing its USDT stablecoin or faces imminent risk of being undercapitalized, that the crypto trade has developed its personal two-word dismissive response: “Tether FUD.”
Via hovering bull markets, essentially the most brutal of bear markets, the comings and going of charlatans like Sam Bankman-Fried, Alex Mashinsky, and dozens of others, Tether’s USDT has continued to develop and performance as designed — pegged to the U.S. greenback and obtainable for redemption at any time. Alongside, Tether has turn into one of many globe’s most worthwhile firms, incomes greater than $10 billion by way of the primary 9 months of 2025, related ranges to these of Wall Avenue titans Goldman Sachs and Morgan Stanley.
The present bear market (and cease saying “zoom out,” it is a bear market), although, has some in conventional finance sharpening their nails but once more.
Through the sleepy session the day earlier than People celebrated Thanksgiving, S&P International slashed the ranking on Tether’s USDT from 4 to five, the weakest degree on its stablecoin stability scale (sure, the company whose rankings shenanigans helped allow the worldwide monetary disaster has a stablecoin stability scale).
Behind the downgrade had been common issues concerning the opacity of Tether’s reporting mixed with one thing considerably new: bitcoin now compromises greater than 5% of the reserves backing USDT — thus continued declines in BTC’s value may result in potential undercollateralization.
There’s smoke. Any fireplace?
“We wear your loathing with pride,” stated Tether CEO Paolo Ardoino, shortly after the S&P transfer. Paying attention to the well-trodden earlier failures of rankings company fashions, Ardoino stated, “the traditional finance propaganda machine is growing worried when any company tries to defy the force of gravity of the broken financial system … Tether instead built the first overcapitalized company in the financial industry, with no toxic reserves.”
Tether, he concluded, “is living proof that the traditional financial system is so broken that it’s becoming feared by the emperors with no clothes.”
Presumably making an attempt to be useful or perhaps simply attempting to flame, well-known angel investor Jason Calacanis took to X over the weekend to supply his recommendation.
“Tether has a lot left to clean up, but they’re getting close,” stated Calacanis. He urged Tether to 1) promote all of its bitcoin, 2) personal solely U.S. treasuries, and three) get not only one, however two audits accomplished by American companies.
The Calacanis publish drew a quick and fiery response from bitcoiners, with the overall response being the absurdity of a stablecoin/bitcoin firm swapping its comparatively small holdings of BTC for presidency paper. A number of drew consideration to Calacanis’ panicky request for a bailout of all financial institution deposits as Silicon Valley Financial institution was failing in March 2023, partly due to a plunge in worth of U.S. Treasuries it was holding.
Honest sufficient. However even when Tether holds onto its bitcoin, what a few conventional audit? On that topic, Calacanis was later joined by common monetary blogger Quoth the Raven, a longtime gold bug who started coming round to bitcoin in 2024.
“I’ve been in this game long enough to know that when a company refuses to furnish a full, independent audit, it’s never because things are pristine and they just forgot to schedule one,” wrote QTR. “I’ve found only ever one reason an outfit digs in its heels and won’t submit to an audit when everyone requests one. And it’s not a good reason.”
“Markets have a long, bloody track record of chewing up the naïve,” he continued. “[An audit is] the bare f—ing minimum anyone should demand from an entity issuing tens of billions in synthetic dollars that underpin entire markets.”
