Tether, operator of the largest <a href="https://www.cryptoknowmics.com/news/ripples-rlusd-stablecoin-hits-1-billion-milestone-hailed-by-company-president/" target="_blank" rel="noopener">stablecoin</a>, USDT, has filed a strong complaint regarding S&amp;P Downgrade's most recent negative credit evaluation. Tether's management believes these criticisms are due to the rating firm's S&amp;P estimations not fully capturing the extraordinary financial strength of the company, particularly due to the substantial operational profitability, as well as the large non-bankable assets in the firm's reserve mix.

While Tether has responded publicly, the value of traditional finance (TradFi) models remains a point of contention between older financial paradigms and the estimates of advanced financial instruments present in the operations of leading edge crypto companies. Tether believes that applying rating models designed for traditional finance to a crypto business is tantamount to grossly underestimating the business's financial soundness.
<h2>Overlooked Digital Assets and Record Operating Profitability</h2>
[embed]https://twitter.com/paoloardoino/status/1995154943808839704[/embed]

Tether's argument rests on two pillars. First, the company believes that S&amp;P's model significantly underestimated the high operational profits resulting from the operational structure of the bank. Unlike traditional banks, Tether's operational structure is profitable, earning large primary and operational profits that are retained in the bank and result in operational reserve profitability. As a consequence, Tether's operational structure is one that has large operational profits that are cyclically positive and result in increasing reserve levels. Second, the firm contends that S&amp;P's rating issued Tether and the cryptocurrency ecosystem as a whole perceived and digitally underutilized.Tether has always reported its investments matter of factly, holding a portion of their reserves in a highly liquid, non-traditional, and in essence, a non-traditional protective buffer and a source of organic growth–as Tether Inc has branded it. Tether articulates that their assurance statements on the records of the financial disclosures do provide 'great' strength though the rating agency reviewed anything but.
<h2>The Difficulty of Estimating Value in Crypto-Centric Finance</h2>
This considerable public disagreement demonstrates the extent and range of crypto finance and more particularly, crypto stablecoin issuance and its rating by traditional financial organizations. S&amp;P has built its rating models for its existing books dealing only with commercial papers, corporate debt, and deposits from conventional banks, none of which incorporate the crypto market volatility and its idiosyncratic high yield opportunities.

Tether’s transparency and unprecedented profitability, combined with enormous asset reserves, make it defensive that USDT is one of the very few stable, liquid dollar peg outs in the market. The essence of Tether is that it is, and remains, improving disclosure, and thus the financial essence for S&amp;P’s pessimistic view downgraded ‘risk holding stable’ in essence is misplaced.

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Tether Disputes S and P Downgrade, Claiming Reserves Miscalculation

Tether vigorously contested a recent S&P downgrade, arguing the rating failed to credit its immense operational profitability and overlooked digital asset reserves.

Tether Disputes S and P Downgrade, Claiming Reserves Miscalculation

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