So previous and crusty are considerations that Tether is both not being upfront concerning the reserves backing its USDT stablecoin or faces imminent menace of being undercapitalized, that the crypto trade has developed its personal two-word dismissive response: “Tether FUD.”
By way of hovering bull markets, probably 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 out there for redemption at any time. Alongside, Tether has change into one of many globe’s most worthwhile firms, incomes greater than $10 billion by the primary 9 months of 2025, comparable 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 scores shenanigans helped allow the worldwide monetary disaster has a stablecoin stability scale).
Behind the downgrade had been ordinary considerations 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 hearth?
“We put on your loathing with delight,” mentioned Tether CEO Paolo Ardoino, shortly after the S&P transfer. Being attentive to the well-trodden earlier failures of scores company fashions, Ardoino mentioned, “the normal finance propaganda machine is rising frightened when any firm tries to defy the pressure of gravity of the damaged monetary system … Tether as a substitute constructed the primary overcapitalized firm within the monetary trade, with no poisonous reserves.”
Tether, he concluded, “resides proof that the normal monetary system is so damaged that it is changing into feared by the emperors with no garments.”
Presumably trying to be useful or possibly simply attempting to flame, well-known angel investor Jason Calacanis took to X over the weekend to supply his recommendation.
“Tether has loads left to wash up, however they’re getting shut,” mentioned 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 completed by American corporations.
The Calacanis put up 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, partially due to a plunge in worth of U.S. treasuries it was holding.
Truthful sufficient. However even when Tether holds onto its bitcoin, what a couple of 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 on this recreation lengthy sufficient to know that when an organization refuses to furnish a full, impartial audit, it’s by no means as a result of issues are pristine and so they simply forgot to schedule one,” wrote QTR. “I’ve discovered solely ever one cause an outfit digs in its heels and gained’t undergo an audit when everybody requests one. And it’s not a superb cause.”
“Markets have a protracted, bloody observe report of chewing up the naïve,” he continued. “[An audit is] the naked f—ing minimal anybody ought to demand from an entity issuing tens of billions in artificial {dollars} that underpin total markets.”