A new stablecoin rating framework is bringing together traditional financial audits and blockchain security reviews to assess both the reserves backing digital assets and the technology controlling their issuance.

Blockchain security firm Hacken found that nearly half of USDT’s circulating supply, worth around $91.3 billion on the Tron network, is managed by a smart contract that could potentially be taken over if an attacker obtained two signing keys.

The contract reportedly has no built-in timelock, cancellation window or dependable mechanism for reversing an unauthorized administrative change.

Despite identifying several cybersecurity concerns in Tether’s infrastructure, rating agency Bluechip upgraded Tether’s corporate rating to C from D following a financial audit conducted by KPMG US.

Tether was the first issuer evaluated under Bluechip’s revised framework, which combines KPMG’s financial assessment with Hacken’s technical security review. Hacken said it found no evidence that the signing keys had been compromised or that an actual security breach had occurred.

The multisignature system does not directly hold customers’ funds. Instead, it governs the USDT smart contract and controls important functions such as creating tokens, freezing addresses and transferring contract ownership.

That creates a potentially significant risk. If two authorized keys were compromised, an attacker could potentially take control of the entire USDT deployment without gaining access to individual wallets.

“There is no built-in delay, cancellation process, or reliable way to undo the changes,” Seher Saylık, a smart-contract auditor at Hacken, told CoinDesk.

Tether had not immediately responded to a request for comment.

Hacken has not yet performed a similar technical assessment of Circle’s USDC. Bluechip’s B+ rating for USDC also cannot be considered a direct comparison because it was issued under the agency’s older methodology, before Hacken’s cybersecurity analysis was incorporated.

What Could Happen in a Two-Key Attack?

According to Saylık, an attacker controlling two valid signing keys could change the USDT contract owner to an address under their control. That could remove Tether’s legitimate administrators from their ability to manage the contract.

The attacker could then potentially mint additional USDT, pause or restart transfers, freeze addresses, remove frozen balances, add transfer fees or redirect token balances and transactions.

None of those actions would require access to individual users’ wallets.

Leo Fan, founder and CEO of Cysic.xyz and a former quantum-resilience lead at Algorand, said Tether benefited from the financial audit and new scoring methodology, but its underlying technical architecture remained unchanged.

The same key-management concern may extend across several blockchains. Saylık said Tether uses the same six signing keys across Ethereum, Avalanche and Celo. A compromise involving keys used on one of these networks could potentially be used to authorize another administrative transaction on a different network.

Tether’s ability to freeze blacklisted addresses would also not necessarily protect the system against such an attack.

The issuer routinely freezes addresses linked to law-enforcement investigations, but a successful two-key compromise could allow an attacker to transfer ownership of the contract. That could potentially remove Tether’s administrative authority and prevent it from freezing funds, according to blockchain adviser Ethan Whitcomb.

Hacken also highlighted a gap between Tether’s financial reserves and its smart-contract controls.

The security firm confirmed Tether’s off-chain backing but noted that USDT’s smart contracts do not automatically verify reserves through an on-chain proof-of-reserves mechanism. The contracts also reportedly do not impose a fixed limit on token issuance.

As a result, once the required signers approve a transaction, the contract could theoretically create any amount of USDT without independently checking whether equivalent funds exist in Tether’s bank accounts.

Other stablecoin projects have faced similar risks. Resolv’s stablecoin plunged roughly 70% in March after an attacker minted tokens and extracted $25 million worth of ETH. StablR also disclosed unauthorized issuance of USDR and EURR following a security breach in May.

Why Bluechip Upgraded Tether

Tether’s higher rating was partly supported by the results of KPMG’s financial audit. KPMG determined that Tether International, S.A. de C.V. had reserves exceeding its liabilities by $6.8 billion as of December 31, 2025.

The C rating is the first issued under Bluechip’s expanded SMIDGE methodology. The framework combines financial and governance assessments with Hacken’s analysis of technical risks.

Under the new approach, the agency evaluates both the assets supporting a stablecoin and the code, administrative controls and infrastructure governing its supply.

Bluechip and Hacken announced their partnership in August. They said the technical component would examine smart-contract reliability, supply integrity, administrative key controls and off-chain infrastructure.

Bluechip had maintained a D rating for USDT for several years. The KPMG audit fulfilled one of the conditions previously identified by the agency for an upgrade: an independent, full-scope audit of Tether’s consolidated financial statements.

USDT remains one of the crypto market’s largest sources of liquidity, with approximately $184.6 billion in outstanding supply.

Bluechip CEO Benjamin Levit said stablecoin ratings have traditionally focused primarily on financial factors. Adding Hacken’s technical analysis, he said, allows the agency to assess the broader risk profile of an issuer.

The new rating also follows S&P Global Ratings’ decision in November to give USDT its lowest possible score on its stablecoin stability scale. S&P cited concerns over Tether’s ability to maintain its dollar peg, exposure to volatile assets such as Bitcoin and continued gaps in reserve disclosures.

Tether strongly rejected that assessment, arguing that S&P’s framework was outdated and failed to reflect the scale, structure and broader economic importance of digital-native money.