Tether Debate Ignites: Former Bank Analyst Clashes with Hayes Over Crypto’s Most Controversial Stablecoin

The simmering controversy around Tether just hit a boiling point. A former bank analyst has publicly refuted claims made by crypto heavyweight Arthur Hayes, throwing gasoline on the long-running debate about the world's largest stablecoin.

The Core of the Clash

Forget dry financial reports—this is a street fight in the digital asset arena. The analyst, whose career was built dissecting traditional bank balance sheets, cut straight through Hayes' assertions. The rebuttal targets the fundamental stability and transparency claims that keep Tether—and by extension, a huge chunk of the crypto market—afloat.

Why This Matters Now

It's not just academic bickering. Tether's USDT acts as the de facto dollar in crypto trading, a multi-billion-dollar linchpin. Questions about its backing aren't new, but a credentialed insider challenging a crypto OG brings fresh, damaging optics. It forces every trader and institution to re-evaluate the bedrock asset they use daily—a classic case of 'trust, but verify,' assuming you can find anything to verify.

A System Under the Microscope

The critique bypasses surface-level hype and goes straight for the structural weak points. It highlights the opaque mechanisms that traditional finance would never tolerate but that crypto has learned to live with—for now. This scrutiny arrives as regulators globally sharpen their knives, looking for the perfect case study in systemic risk.

The market's response will be the ultimate judge. Will this escalate into a full-blown credibility crisis, or will it be dismissed as just another round of FUD in an industry that thrives on controversy? One thing's certain: the stablecoin wars just got a lot more interesting, proving once again that in crypto, the biggest battles are often fought over the quietest assets. After all, what's finance without a little healthy skepticism—or in this case, a massive dose of it?

Tether Is Far Stronger Than It Looks: Former Citi Analyst

A former Citi research lead, who goes by the name “Joseph”, pushed back on Hayes’s scenario. Based on reports, Joseph said public attestations only show the assets that directly back outstanding USDT and do not capture the full corporate balance sheet.

I spent 100’s of hours writing research on tether for @Citi. @CryptoHayes missed a few key points.

1) 𝐓𝐡𝐞𝐢𝐫 𝐝𝐢𝐬𝐜𝐥𝐨𝐬𝐞𝐝 𝐚𝐬𝐬𝐞𝐭𝐬 =/ 𝐚𝐥𝐥 𝐜𝐨𝐫𝐩𝐨𝐫𝐚𝐭𝐞 𝐚𝐬𝐬𝐞𝐭𝐬

When tether generates $ they have a separate equity balance sheet which they don’t… https://t.co/pHSRr245Up

— Joseph (@JosephA140) November 30, 2025

He told reporters he spent hundreds of hours reviewing filings and market data and estimates Tether’s total equity could be in the $50–$100 billion range — a cushion much larger than what critics point to when they focus on attested reserves.

Reported Buffers

According to Joseph’s calculations, Tether holds about $120 billion in US Treasuries that are earning roughly 4%, which he says could generate about $10 billion a year in net income.

He also cited other corporate assets that are not part of public reserve snapshots — equity stakes, mining operations, and additional bitcoin holdings — all of which, he argues, strengthen Tether’s overall capital position.

Paolo Ardoino, Tether’s CEO, has publicly cited roughly $30 billion in “group equity” as part of the firm’s buffer against shocks.

re: Tether FUD

From latest attestation announcement (Q3 2025):

“Tether will continue to maintain a multi-billion-dollar excess reserve buffer and an overall proprietary Group equity approaching $30 billion.”

Tether had (at end of Q3 2025) ~7B in excess equity (on top of the…

— Paolo Ardoino(@paoloardoino) November 30, 2025

Hayes’s point, however, rests on a simple math worry: volatile assets can move fast, and marked declines WOULD reduce the value of reserves.

He framed Tether’s MOVE into Bitcoin and gold as a macro hedge against expected rate cuts, but said that hedge could backfire under a sharp sell-off.

Reports have noted that because attestations focus on backing for USDT supply, they may not reveal how much of the company’s other assets would be available in a crisis — a gap that keeps some investors uneasy.

The clash highlights two facts. One: there are sizable numbers involved — $120 billion in Treasuries, a roughly $30 billion equity figure cited by management, and the $50–$100 billion range estimated by Joseph.

Two: the Core issue is disclosure. If Tether’s broader holdings can be marshalled quickly in a stress event, the company may handle big swings. If not, volatility could create trouble for short-term liquidity even if long-term equity is large.

Featured image from Pexels, chart from TradingView