Tether (USDT) faced a sharp reality check on 26 Nov, taking a double hit from Wall Street’s gatekeepers and Seoul’s regulators. The stablecoin issuer was downgraded to the bottom of S&P’s risk scale just hours before a major Korean exchange said it would halt its USDT trading services.
S&P Drops Tether to Lowest Rating Tier as Korean Pressure Mounts
27 November 2025 - 09:03 CET
By Stu Clelland
The 'Weak' verdict
S&P Global Ratings cut Tether from "4 (constrained)" to "5 (weak)", the lowest possible score on its stablecoin stability assessment. The downgrade strips away any ambiguity about how traditional finance views the $184bn giant: as a massive, opaque risk.
S&P justified the move by citing "persistent gaps in disclosure." The agency noted that despite Tether's size, its reserve composition has drifted into riskier territory, moving away from US Treasuries and towards corporate bonds, secured loans and volatile assets like Bitcoin.
Tether fired back, accusing S&P of using a "legacy framework" that fails to understand the mechanics of digital money, arguing that its ability to honor redemptions is the only metric that counts.
Seoul shuts the door
While S&P attacked the credit rating, South Korean regulators attacked the plumbing. Bithumb, a top-tier exchange, announced the suspension of its "Tether Market" service starting 28 Nov, halting all USDT transactions after that date.
The shutdown follows on-site inspections by the country's Financial Intelligence Unit (FIU) as the Korean police crackdown on digital asset money-laundering. By targeting the service, which allowed trading via a Stellar partnership, regulators are effectively closing a loophole for unverified stablecoin flows. It is a tangible signal that in major Asian markets, "compliance" is no longer a paperwork exercise; it is an enforcement action.
