Tether’s USDT Faces Downgrade Amid Ongoing Reserve Concerns
- S&P Global downgraded Tether’s USDT rating from 4 to the lowest level, a score of 5.
- Concerns include the opacity of Tether’s reporting and that over 5% of USDT reserves are held in Bitcoin.
- Tether reported earnings exceeding $10 billion in the first nine months of the year, rivaling major financial institutions.
- CEO Paolo Ardoino defended Tether, claiming it is overcapitalized and free from toxic reserves.
- Investor Jason Calacanis suggested Tether should divest its Bitcoin holdings and undergo two audits by American firms.
The downgrade raises questions about Tether’s transparency and financial stability, particularly as Bitcoin’s value affects its collateralization status. This scrutiny comes as traditional finance expresses concern over crypto market dynamics.
With S&P Global’s recent downgrade and ongoing debates about reserve management, Tether continues to navigate a challenging landscape amid significant scrutiny regarding its operations and transparency. (Source)
