Tether’s financial stability is once again under scrutiny, following fresh criticism from Arthur Hayes and a recent downgrade from S&P Global.
But this time, CoinShares Head of Research James Butterfill stepped directly into the conversation, arguing that the concerns circulating around USDT’s solvency are overstated and unsupported by the latest financial data. His assessment points to a stronger, more profitable Tether that appears far from the brink some critics suggest.
Butterfill Says Solvency Concerns Are “Misplaced”
According to Butterfill, fears surrounding Tether’s reserve quality and long-term solvency lack the proper context. He cites Tether’s most recent attestation, which reports $181 billion in total reserves versus $174.45 billion in outstanding liabilities, leaving the issuer with an estimated $6.8 billion surplus. He adds that Tether’s profitability is one of the most overlooked components of its balance sheet.
CoinShares Head of Research James Butterfill pushed back on fresh critiques from Arthur Hayes and S&P Global, arguing market angst over Tether’s solvency is misplaced. Citing Tether’s latest attestation, he said the firm holds roughly $181B in reserves against ~$174.45B in…
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Tether generated more than $10 billion in profit during the first three quarters of 2025, largely due to returns from U.S. Treasury holdings. Butterfill argues that such consistent income strengthens reserves over time and provides an additional buffer far larger than what critics acknowledge.
Hayes Warns of Asset Volatility Risk
Arthur Hayes, co-founder of BitMEX, has taken a much more skeptical view. His primary argument centers on Tether’s non-cash holdings, specifically its exposure to Bitcoin and gold, which were valued at roughly $9.9 billion and $12.9 billion respectively in Q3 2025.
Hayes estimates that a 30% decline in the value of these assets could theoretically erase Tether’s equity cushion, leaving the company vulnerable and potentially insolvent. His warnings reignited debate in the crypto community, fueling familiar concerns about transparency, asset mix, and systemic risk.
S&P Global Cites Disclosure Issues and Risk Exposure
S&P Global contributed to the renewed scrutiny by lowering its peg-stability rating for USDT. The agency pointed to the presence of “higher-risk” assets—such as gold, Bitcoin, and certain loans, as well as what it describes as “persistent gaps in disclosure.”
The downgrade reflects long-standing pressure on Tether to provide a full independent audit from a major accounting firm, rather than the quarterly attestations currently performed by MHA Cayman.
Butterfill Counters: Risk Exposure Is Overstated
Butterfill directly challenges the assumptions behind these critiques. He notes that Bitcoin and gold represent only about 12.6% of Tether’s total reserves, a proportion too small, in his view, to threaten solvency, especially when balanced against the 70%+ allocation to short-term U.S. Treasuries, the most liquid and stable component of the market.
He also emphasizes that the company’s multibillion-dollar surplus and significant ongoing profits act as further protection against volatility in any single asset class.
Tether’s CEO Rejects the Criticism Entirely
Paolo Ardoino, Tether’s CEO, has dismissed the latest wave of concern as “FUD,” insisting the company remains “overcapitalized” and transparent. Ardoino argues that critics routinely misinterpret Tether’s structure, particularly its separate equity balance sheet and the monthly profits generated from Treasury yields. He maintains that all relevant data is published publicly on Tether’s website and that the business continues to operate with substantial excess reserves.
A Debate Unlikely to End Soon
While stablecoin risks will always attract attention, especially when the issuer is the largest player in the market, Butterfill remains firm in his conclusion: the numbers do not point to systemic vulnerability. Tether’s surplus, profitability, and reserve composition, he argues, indicate an issuer in strong financial health rather than one facing imminent danger.
The broader debate, however, is far from settled. Transparency demands continue, regulatory frameworks are still evolving, and critics like Hayes remain unconvinced. But for now, based on the current attestation data, CoinShares’ view is clear: the latest wave of solvency fears lacks the evidence to support them.
