Tether’s chief, Paolo Ardoino, has responded to S&P Global Ratings’ recent downgrade of the USDT stablecoin, labeling the agency as part of a disjointed traditional financial system.

Ardoino claimed the rating agency lacks a full grasp of Tether’s business model. The downgrade, which gave USDT a score of “5 (weak)"—the lowest possible rating—was attributed to failures in financial transparency and the increasing presence of high-risk assets in Tether’s reserves, including Bitcoin, gold, lent funds, and corporate bonds.

Tether CEO’s Remarks

In response, Ardoino expressed on social media that Tether would “wear your loathing with pride.” He further criticized traditional financial rating models, contending they have misled investors in the past.

He argued that the traditional finance sector struggles with companies that diverge from its failing system, asserting Tether is the first company in the sector that is significantly overcapitalized and operates without hazardous reserves while still being profitable.

“Tether is living proof that the traditional financial system is so broken that it’s becoming feared by the emperors with no clothes,” he stated.

Concerns About Financial Transparency

S&P’s report noted that Bitcoin constitutes approximately 5.6% of USDT in circulation, exceeding its collateral buffer of 3.9%. It cautioned that any decrease in the value of BTC or other high-risk assets could leave USDT undersecured.

Despite holding a significant portion of reserves in U.S. Treasury bills and cash equivalents, S&P highlighted limited transparency regarding Tether’s financial stability, which contributed to the low rating.

S&P also suggested that if Tether decreases its high-risk asset exposure and clarifies its reserves and partner information, its rating might improve. Currently, USDT is the leading stablecoin with a market cap of $184 billion.