Howard Lutnick Bets on Crypto-Backed Lending With Tether's Support

Crypto-backed lending has long been touted as a promising use case for digital assets. However, most attempts have struggled to gain mass adoption due to challenges in trust, regulation, and market volatility.

Crypto-backed lending has been touted as a promising use case for digital assets, but most attempts have struggled to gain mass adoption due to challenges in trust, regulation, and market volatility.

Now, Howard Lutnick, CEO of Cantor Fitzgerald and newly appointed Commerce Secretary under Donald Trump’s administration, is betting on its future.

His firm plans to launch a Bitcoin-backed lending program with Tether’s support, starting at $2 billion and potentially growing into tens of billions, according to Bloomberg.

Lutnick’s firm also recently acquired a 5% stake in Tether, valued at $600 million, making it a major partner in the world’s largest stablecoin, USDT.

Cantor reportedly manages most of Tether’s $132 billion in assets, earning it tens of millions annually in fees.

Tether’s leadership sees Lutnick as a key ally.

“Giancarlo Devasini [Tether CFO] said privately earlier this year that Lutnick will use his political clout to try to defuse threats facing Tether,” reported The Wall Street Journal.

A spokesperson denied these claims, stating, “Tether’s relationship with Cantor is entirely professional, based on managing reserves.”

Lutnick, who plans to step down from his Cantor roles upon Senate confirmation, said, “I intend to divest my interests in these companies to comply with US government ethics rules.”

Tether controversy

Despite Tether’s dominance as the largest stablecoin, controversies persist. Questions about whether Tether fully backs USDT with reserves have plagued the company for years.

Its quarterly attestations claim over $84 billion in US Treasury bills and other assets.

However, authorities have linked USDT to illicit activities, including organized crime and money laundering.

A UN report in January identified USDT as the “preferred choice” for Asian crime syndicates, which allegedly facilitated $17 billion in illegal trades.

In October, The Wall Street Journal reported a criminal investigation into Tether for alleged violations of anti-money laundering rules. Tether’s CEO Paolo Ardoino called the claims “regurgitated noise.”

Lutnick, however, has defended the company’s reserves, stating, “We found every penny.”

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Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.