Bluechip Upgrades USDT Rating From D to C

Bluechip is upgrading the USDT rating from D to C. The upgrade follows a full financial audit of the issuer with an unqualified opinion by KPMG US, and the first assessment of a stablecoin's technical risk under the Implementation methodology developed with Hacken.

USDT has carried a D rating since our initial assessment in 2023, most recently affirmed in 2025. Since then, Tether has taken meaningful steps to improve transparency. This upgrade reflects that progress. However, it does not resolve the structural gaps that make USDT unsuitable for certain use cases.

What Changed

Two developments drive the rating upgrade.

• A full financial audit. Tether International SA de CV completed an audit of its 2025 financial statements, with an unqualified opinion issued by KPMG US. This confirms that the accounts fairly represent the issuer's financial statements in all material respects. Tether also continues to publish quarterly attestations of reserves from an independent accounting firm.
• A dedicated technical risk assessment. Hacken's cybersecurity methodology now powers the Implementation factor in our SMIDGE methodology. USDT is the first stablecoin scored under it, replacing our previous treatment of technical risk with a documented, criterion-by-criterion assessment of the architecture.

An audit is a materially higher bar than an attestation. An attestation confirms that reserves exist at a point in time. An audit examines the financial statements of the entity as a whole. That distinction carries more weight for Tether than for most issuers, because USDT reserves are not isolated from the company's corporate funds.

SMIDGE: Implementation

Hacken assessed USDT on every blockchain holding at least 1% of native supply. The central finding is the concentration of control, combined with speed of execution.

• No timelock exists on any privileged action. Minting, freezing, and, where applicable, contract upgrades take effect as soon as the required signatures are collected. A timelock would introduce a delay between approval and execution, allowing for time to detect and stop a malicious transaction.
• Roughly half of outstanding supply sits behind a 2-of-3 multisig. Tron holds over $91B in USDT. Two of three designated key holders can approve privileged actions affecting that supply.
• Signer sets are reused across chains. Ethereum, Avalanche, and Celo share the same six signing keys under a 3-of-6 scheme. On Avalanche and Celo, those keys also control the ability to replace token code, so a three-signer compromise would not be contained to a single deployment.
• The reviewed minting paths carry no onchain issuance limit. Once quorum authorizes a transaction, the reviewed contracts impose no further cap on the amount that can be minted, and no mint path references attested backing.

No single-key takeover was identified, and administrative actions require multiple signatures on every assessed chain. Bridge contracts have been reviewed by multiple security firms and are covered by a bug bounty of up to $6M, though administrative control over that infrastructure remains concentrated.

The Bluechip View

Despite the rating upgrade, structural gaps in Tether's corporate structure continue to weigh on the rating.

• No asset segregation or bankruptcy remoteness. USDT reserves are not isolated from Tether's corporate funds and are not held in bankruptcy remote structures. Stablecoin holders will likely be treated as ordinary creditors in an insolvency.
• Limited external oversight. Tether holds a Digital Asset Service Provider (DASP) license in El Salvador, which does not have the requisite regulatory capacity to ensure effective external oversight.
• Incorporate a redemption policy. Tether does not commit to following a defined and reasonable timeline to process redemptions in the company’s terms of service.

USDT is suitable for non-US, institutional users and high net-worth traders who can onboard with Tether and access the mint and redeem mechanism directly. Users who cannot do so must rely on secondary markets.

Beyond that, USDT is suited to users who need to leverage the stablecoin's deep market liquidity, volume share, and breadth of trading pairs. However, most retail users and passive market participants are better served by more transparent and regulated options.

Read more

• Browse current ratings: Stablecoin Ratings
• Bluechip x Hacken partnership: Announcement Post
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