According to DLNews, Cantor Fitzgerald, led by CEO Howard Lutnick, is venturing into the realm of crypto-backed lending, a sector that has faced challenges in gaining widespread acceptance due to issues of trust, regulation, and market volatility. The firm is planning to launch a Bitcoin-backed lending program with the support of Tether, starting with an initial investment of $2 billion, with the potential to expand into tens of billions, as reported by Bloomberg. This move comes after Cantor Fitzgerald acquired a 5% stake in Tether, valued at $600 million, positioning it as a significant partner in the stablecoin market dominated by USDT.
Cantor Fitzgerald reportedly manages a substantial portion of Tether's $132 billion in assets, generating tens of millions annually in fees. Tether's leadership views Lutnick as a crucial ally, with The Wall Street Journal reporting that Tether CFO Giancarlo Devasini privately expressed confidence in Lutnick's ability to mitigate threats facing Tether. However, a spokesperson for Tether has denied these claims, emphasizing that the relationship with Cantor is strictly professional and focused on managing reserves. Lutnick, who is set to step down from his roles at Cantor upon confirmation as Commerce Secretary, has stated his intention to divest his interests in these companies to adhere to US government ethics rules.
Despite Tether's position as the leading stablecoin, it continues to face controversies. Persistent questions about whether Tether fully backs USDT with reserves have been a longstanding issue. While quarterly attestations claim over $84 billion in US Treasury bills and other assets, authorities have linked USDT to illicit activities, including organized crime and money laundering. A UN report in January highlighted USDT as the "preferred choice" for Asian crime syndicates, allegedly facilitating $17 billion in illegal trades. Additionally, The Wall Street Journal reported in October a criminal investigation into Tether for potential violations of anti-money laundering regulations. Tether's CEO Paolo Ardoino has dismissed these allegations as "regurgitated noise." Lutnick, however, has defended Tether's reserves, asserting that "We found every penny."
