Cantor Fitzgerald's Tether ties raise concerns as Trump nominates CEO for Commerce Secretary
Cantor Fitzgerald, a financial services firm primarily owned by billionaire Trump loyalist Howard Lutnick, has been revealed to hold a nearly 5% stake in the world's largest stablecoin issuer, Tether, according to a Wall Street Journal report.
This investment positions Cantor Fitzgerald as a key player in the stablecoin market, especially given CEO Lutnick's nomination by Trump for the role of Secretary of Commerce. Lutnick is also advising Trump on federal appointments for his upcoming administration, giving him considerable influence over critical positions that could impact the cryptocurrency and stablecoin industries.
Meanwhile, Tether is reportedly under investigation by federal investigators for potential violations related to money laundering and sanctions evasion. Tether denies these allegations.
The company has also aroused concern from authorities for its lack of detailed transparency around its reserves. Moreover, its outsized role in crypto markets – particularly in frontier economies where Tether acts as a popular alternative to underperforming local currencies - has alarmed regulators who warn about its potential to pose risks to both the U.S. and the global financial system.
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Cantor Fitzgerald, which has $13.2 billion in assets under management, is a major holder of Tether’s $134 billion reserves — primarily U.S. Treasurys — and provides crucial banking services to the stablecoin issuer, which has faced challenges accessing banking partners.
Lutnick has extolled the utility of stablecoins in emerging markets where trust in a central bank-issued currency has been eroded, like Argentina, Turkey and Venezuela.
With an upcoming stablecoin bill anticipated in Congress next year, Lutnick's potential influence could be instrumental in helping Tether navigate future regulatory challenges. Given the firm's deep financial ties to Tether, however, Lutnick has pledged to step down from his role as CEO of Cantor Fitzgerald and divest from the company.
