S&P Global Ratings has downgraded Tether's USDT stability score to a "weak" level, marking it the lowest on their scale. The downgrade stems from increased risks in Tether's reserve assets, particularly with bitcoin now comprising about 5.6% of USDT in circulation. This percentage exceeds the roughly 3.9% reserve buffer indicated in Tether's latest attestation. S&P warns that a significant drop in bitcoin's value, especially alongside declines in other high-risk assets, could leave USDT undercollateralized. Tether's riskier assets, which include bitcoin, gold, secured loans, and corporate bonds, now account for 24% of reserves—up from 17% a year ago. S&P pointed out ongoing transparency issues regarding Tether's custodians and asset composition, further contributing to the downgrade. While a portion of USDT's reserves remains in short-term U.S. Treasuries and cash-like assets, S&P criticized the lack of basic investor protections in how these reserves are structured, such as insufficient separation from the company's own funds. Tether's CEO, Paolo Ardoino, pushed back against S&P's assessment, labeling it as a reflection of outdated rating models. He claims Tether is "overcapitalized" and profitable, arguing that the company is being unfairly scrutinized for operating outside conventional financial systems.