Howard Lutnick, the Billionaire Tether Advocate Seeking to Lead the US Commerce Department

When Wall Street billionaire Howard Lutnick appears before a US Senate committee on Wednesday, he'll probably get a lot of questions about his activities in finance.

Wall Street billionaire Howard Lutnick is set to face questions about his activities in finance during a confirmation hearing before a US Senate committee on Wednesday.

Lutnick, a longtime friend of Donald Trump, is seeking approval to serve as Secretary of Commerce.

While Senator Ted Cruz, the Texas Republican who chairs the Committee on Commerce, Science and Transportation, has praised Lutnick as an “excellent choice,” his Democratic counterparts are expected to press the nominee to explain his support for Tether.

Cantor Fitzgerald, the financial services firm led by Lutnick, manages billions of dollars in US Treasury bonds that Tether uses to back its dollar-pegged stablecoin, USDT.

According to The Wall Street Journal, Cantor also holds a 5% stake in Tether and is collaborating with the stablecoin issuer to establish a Bitcoin-backed lending program.

Moreover, Lutnick has been a vocal advocate for Tether and its stablecoin, which boasts a market value of $139 billion.

During an interview at the World Economic Forum in Davos, Switzerland, in 2024, Lutnick expressed his enthusiasm for Tether, stating, “Holding your dollar in a token is amazing. That's why Tether is doing really well.”

However, experts have raised concerns that USDT has become a convenient tool for illicit actors to launder proceeds from illegal transactions, making it a prime target for scrutiny.

In 2024, the United Nations Office on Drugs and Crime reported that $17 billion in USDT was linked to illicit crypto exchanges, trades, and activities.

Additionally, TRM Labs, a blockchain intelligence firm, highlighted the extensive use of the stablecoin by terrorist networks in 2023.

Furthermore, US lawmakers have expressed specific concerns regarding USDT's role in the trafficking of fentanyl, the illegal synthetic opioid.

At a hearing in May 2023, Senator Elizabeth Warren stated, “Fentanyl is now the leading cause of death among Americans 18 to 45.”

In an interview with DL News in 2024, Tether CEO Paolo Ardoino emphasized the company's commitment to working with the US Department of Justice and other law enforcement agencies to prevent criminals from exploiting USDT.

According to Tether, it has frozen nearly 1,800 cryptocurrency wallets linked to illicit activities since its inception in 2014.

Ardoino is also reportedly attempting to convince a top global accounting firm to audit Tether's reserves and address ongoing concerns about the company's ability to fully back USDT with cash.

Currently, Tether publishes quarterly “attestations” that show its assets. In the first half of 2024, it reported that its reserves generated a $5.2 billion profit.

Since 2021, Lutnick and Cantor have played a crucial role in helping Tether manage its vast pool of reserves.

Cantor is among the 24 primary dealers authorized to trade US government bonds directly with the Federal Reserve, allowing it to quickly liquidate Treasuries—Tether's primary reserve asset—for cash.

If confirmed, Lunick will lead a department tasked with promoting US business abroad and bolstering the domestic private sector.

While the Commerce Department enforces US trade laws internationally, the office of the US Trade Representative will spearhead Trump's aggressive tariffs policy.

Nevertheless, Lutnick has expressed support for Trump's pledge to impose 20% tariffs on imports and 25% penalties on goods from Canada and Mexico, the US's top trading partners.

In the lead-up to his confirmation hearing, Lutnick, 63, disclosed that he will step down as CEO of Cantor Fitzgerald.

According to a 92-page financial disclosure report, he will also resign as head of BCG Group, a financial technology firm, and Newmark Group, a commercial real estate services company.

Furthermore, Lutnick stated that he will divest his stakes in over 800 companies.

In contrast to several other officials in Trump's cabinet, Lutnick does not appear to personally hold any crypto assets. However, he did report a stake in Candy Digital, a crypto collectables firm, and stablecoin exchange Tru Markets.

Additionally, he is an investor in Rumble, a YouTube rival that has gained popularity among right-wing viewers. Tether notably invested $775 million in the video platform in December.

Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at liam@dlnews.com.