Cantor Fitzgerald is expected to acquire 5% of Tether as CEO Lutnick eyes Commerce Secretary

• Cantor Fitzgerald holds a 5% stake in Tether, valued at $600M, boosting its role in managing Tether’s $133B reserves.
• Howard Lutnick’s Commerce Secretary nomination raises concerns about potential crypto policy influence amid ties to Tether.
• Tether faces regulatory probes, including sanctions risks, while reporting $7.7B in profits during the first nine months of 2024.

Howard Lutnick, CEO of Cantor Fitzgerald and nominee for U.S. Commerce Secretary, is his deepening ties with stablecoin issuer Tether. A recent report from The Wall Street Journal revealed that Cantor Fitzgerald secured a 5% ownership stake in Tether, valued at approximately $600 million. 

This move comes as Lutnick steps into the political side, raising questions about his influence on cryptocurrency policies. Tether, the largest stablecoin by market cap, relies heavily on Cantor Fitzgerald for managing its $133 billion in reserves.

Cantor Fitzgerald’s Role in Tether’s Operations

Cantor Fitzgerald plays a critical role in Tether’s operations, handling billions of dollars in transactions each month. The partnership, established in 2021, is reportedly focused on managing reserves rather than regulatory matters. 

Despite this, sources claim Tether’s leadership views Lutnick as an ally against proposed regulations targeting offshore stablecoins like USDT. Giancarlo Devasini, Tether’s owner, allegedly expressed confidence in Lutnick’s political influence earlier this year. Tether has denied these claims, calling them speculative and unverified.

Regulatory Challenges and Allegations Against Tether

Tether faces increasing scrutiny from U.S. regulators, including a criminal investigation into its potential use in illicit activities. The Treasury Department is reportedly evaluating sanctions against the company due to alleged involvement in transactions with sanctioned entities. 

Despite these challenges, Tether has recorded significant profits, generating $7.7 billion through the first nine months of the year. CEO Paolo Ardoino has dismissed allegations, labeling them as baseless and outdated.

Lutnick’s Nomination Raises Policy Questions

Lutnick’s nomination as Commerce Secretary introduces new dynamics to the relationship between Cantor Fitzgerald and Tether. He has pledged to divest his interests in Cantor Fitzgerald to comply with ethics rules upon Senate confirmation. 

At an industry conference earlier this year, Lutnick voiced support for stablecoins, emphasizing their importance to the U.S. economy. This sentiment aligns with his company’s involvement with Tether’s U.S. dollar-pegged USDT.