Former Citi Analyst Refutes Arthur Hayes’ Tether Insolvency Claims

Arthur Hayes recently raised alarms over Tether but a former Citi crypto analyst says the concerns don’t match the reality of how the company operates.

Joseph, who previously spent “100’s of hours writing research on tether for Citi,” responded directly on X, offering a clearer look at Tether’s balance sheet and profitability.

A Missing Piece in the Tether Debate

Joseph’s main point is straightforward: the reserves Tether publishes are not its full corporate balance sheet. He says the disclosures follow a “matching” philosophy meant only to show how USDT is backed and not everything the company owns.

According to him, Tether also holds:

• equity investments,
• mining operations,
• corporate reserves,
• and possibly additional Bitcoin.

Any remaining profits are paid out as dividends. In his view, this is the part Hayes overlooked.

A Business Producing Billions

Joseph also pushed back on the idea that Tether is vulnerable to asset swings. He highlighted how profitable the company has become since interest rates climbed.

Tether currently holds about $120 billion in Treasuries earning roughly 4%. That translates to nearly $10 billion in annual profit, managed by a staff of around 150 people. Joseph called it “one of the most efficient cash generating businesses in the world.”

He estimated Tether’s equity could be valued between $50-100 billion, noting the company has even explored raising $20 billion for a 3% stake, which is a valuation he admits is likely too high, but still shows how valuable the business has become.

Stronger Liquidity Than Most Banks

Hayes argued Tether could be wiped out if its Bitcoin and gold dropped 30%.

Joseph disagrees, pointing out that banks typically keep only 5-15% of deposits in liquid assets, while Tether is “significantly better collateralised.” Unlike banks, Tether doesn’t have a central bank behind it, but Joseph says its balance sheet strength fills that gap.

Also Read: BREAKING: Why Tether’s USDT Is One Bitcoin Crash From Breaking

FUD Met With Facts?

The post drew supportive responses from the community, including a comment from Tether CEO Paolo Ardoino.

For now, Joseph’s breakdown offers a more grounded view: Tether isn’t facing an insolvency crisis but is running a highly profitable operation with far more behind it than the public reserve reports show.