(The Wall Street Journal) quotes 'some business partners' indicating that Howard Lutnick, nominated by Trump to serve as the U.S. Secretary of Commerce, has finalized the acquisition of a 5% stake in Tether through his financial services company Cantor Fitzgerald, valued at up to $600 million, bringing Tether's valuation to approximately $12 billion.
Howard Lutnick, CEO and major shareholder of financial services company Cantor Fitzgerald, has been nominated by President-elect Trump to serve as the U.S. Secretary of Commerce, and Lutnick was previously a co-chair of Trump's transition team. This may signify a shift in U.S. policy to support the cryptocurrency sector.
Over the past year, Cantor has strengthened its relationship with the stablecoin issuer Tether, with (The Wall Street Journal) quoting 'some business partners' indicating that Cantor has finalized the acquisition of a 5% stake in Tether, valued at up to $600 million, bringing Tether's valuation to approximately $12 billion.
According to (Bloomberg), informed sources revealed that Cantor is discussing obtaining support from Tether, intending to lend billions of dollars to clients, who will use Bitcoin as collateral. Another source said that the planned funding is expected to start at $2 billion, with a projected final scale reaching hundreds of billions.
Tether's leadership views Lutnick as an important ally against proposed legislation aimed at tightening regulations on stablecoins like USDT.
Sources revealed that Tether's largest shareholder and CFO, Giancarlo Devasini, privately disclosed earlier this year that Lutnick would leverage his political influence to attempt to mitigate the threats facing Tether.
A spokesperson clarified to the media that 'the relationship between Tether and Cantor is purely professional and is based on managing reserves. The claim that Lutnick is involved in the (Trump) transition team to influence regulatory actions is laughable.'
The USDT issued by Tether, pegged to the dollar, is currently the largest stablecoin by market capitalization. Individuals familiar with Cantor's operations revealed to the media that Tether primarily utilizes Cantor's custodial services to hold billions of dollars in U.S. Treasury bonds, which support the value of USDT. Sources pointed out that this custodial relationship generates tens of millions of dollars in revenue for Cantor each year.
Last month, reports indicated that the U.S. Department of Justice is conducting a criminal investigation into Tether to determine whether it has been used by third parties for terrorism financing, hacking, and other illegal activities. The U.S. Treasury Department has also been considering sanctions against Tether because USDT has been used by individuals and entities under U.S. sanctions.
Tether CEO Paolo Ardoino stated at the time, 'There is no evidence that Tether is under investigation', '(The Wall Street Journal) is just rehashing old news', 'No need to elaborate.'
Tether has grown significantly; according to the latest financial report, the company made a profit of $7.7 billion in the first nine months of this year.
Lutnick stated last Wednesday that once the Senate confirms his nomination as Secretary of the Treasury, he will resign from his positions at Cantor, BGC, and Newmark. He stated in a declaration:
I intend to divest my interests in these companies to comply with U.S. government ethical rules and do not anticipate any arrangements involving the sale of stocks in the public market.
Two informed sources revealed that as Lutnick takes over as head of the Commerce Department, he is preparing to transfer the company's business relationship with Tether to colleagues. Lutnick's son, Brandon Lutnick, is a trader at Cantor and previously interned at Tether in Switzerland.
