An Undisclosed Loan Exposes the Interest Ties Between U.S. Commerce Secretary and Tether

Original Author: David Kocieniewski, Anthony Cormier, Todd Gillespie, Bloomberg

Original Compilation: Chopper, Foresight News

Last October, U.S. Commerce Secretary Howard Lutnick sold his multibillion-dollar stake in Cantor Fitzgerald to trusts benefiting his four children. This arrangement was intended to comply with federal ethics rules for the financial services firm he has led for over three decades.

Around the same time, one of those trusts made an unusual move. The “Dynasty Trust A,” which benefits all four children, borrowed an undisclosed sum from stablecoin issuer Tether. With a 2024 investment, Tether had already helped Cantor Fitzgerald’s assets soar to record highs, and its overseas holding company has been advocating for more favorable U.S. 暗号 regulations.

A spokesperson for Cantor Fitzgerald and Lutnick’s children declined to discuss the loan size or whether the funds were used to finance any part of the asset sale. However, spokesperson Stan Neve stated that the acquisition was “financed at market rates and market prices through multiple funding sources, multiple companies, and multiple trusts,” in compliance with the federal ethics agreement signed by Howard Lutnick. This loan has not been previously reported.

February 2026, cushions at the Seoul Bithumb exchange platform featuring the Tether logo

A credit filing submitted in New York state on October 7 shows the loan is secured by “all assets” held by the trust, including any assets it may subsequently acquire. A Cantor executive familiar with the deal said the loan is specifically backed by a convertible note that gives Cantor the right to acquire a 5% stake in Tether.

According to a recent filing by the financial services company, Dynasty Trust A’s assets include more than half of Cantor Fitzgerald’s equity. However, Neve stated that through another independently managed entity, control of the company is “held entirely by the next generation of the Lutnick family and has never been pledged.”

By selling the assets, Lutnick met federal regulations designed to eliminate potential conflicts of interest for presidential appointees. But experts who reviewed the transaction documents say that if the loan helped facilitate Lutnick’s sale of his stake to his children’s trusts, it undermines the purpose of the federal divestiture requirements.

“This transaction, which was supposed to theoretically eliminate a conflict of interest, actually creates a new one,” said Kathleen Clark, a law professor at Washington University in St. Louis and former ethics counsel for the District of Columbia. She stated that if Tether’s loan helped Lutnick complete a transaction that “ultimately benefits both him and his children,” it creates another debt of gratitude his family owes to Tether. It also raises further concerns that Howard Lutnick might use his government position to benefit Tether and his children rather than the public interest.

A Cantor Fitzgerald executive familiar with the matter disputed Clark’s view, stating the loan does not alter the “already strong economic and strategic alignment of interests” between Tether and the company. A Tether spokesperson did not respond to requests for comment.

A U.S. Commerce Department spokesperson did not respond to a series of questions but sent a statement: “Secretary Lutnick has fully complied with the terms of his ethics agreement, including all divestiture and recusal requirements, and will continue to do so.”

The amount of the loan Tether provided to the trust is unclear, and the price Lutnick’s children paid for their father’s stake was not disclosed. But as CEO and chairman, Lutnick held the vast majority of the company’s equity. Following the 2024 investment in Tether, the firm’s book valuation surged by billions of dollars.

Tether’s core business is issuing the stablecoin USDT, a digital currency pegged to the U.S. dollar; holders can conduct instant, low-fee transactions outside the traditional banking system. For every USDT issued, Tether is supposed to hold high-quality, liquid reserve assets as backing. Last year, Tether disclosed its reserves reached $192 billion; since 2021, Cantor has been earning fees by managing these funds. Tether’s business is highly profitable, reportedly earning $10 billion in profit last year with a profit margin of 99%.

The stablecoin company’s success has also been accompanied by controversy. In 2021, U.S. regulators accused Tether and related companies of making misleading statements about losses and reserves, leading to fines of approximately $60 million, though the companies did not admit to any wrongdoing. According to two people familiar with the matter, Tether was also investigated by the U.S. Department of Justice in 2024, though the current status of that investigation is unclear.

Meanwhile, the Donald Trump administration relaxed crypto enforcement, disbanding teams at the Justice Department and the U.S. Securities and 交換 Commission that investigated crypto-related crimes. In 2024, a United Nations report called Tether the “preferred tool” for Southeast Asian gangs and money launderers. Tether responded at the time that it collaborates with law enforcement agencies worldwide and conducts comprehensive, high-standard monitoring of its tokens.

Before partnering with Cantor in 2021, most U.S. banks avoided doing business with Tether. Lutnick has said he personally negotiated the partnership with the company and reviewed its books to ensure it held the assets it claimed. At his Senate confirmation hearing, he said Tether executives assured him they would cooperate with law enforcement and take steps to curb money laundering.

In April 2024, Lutnick participated in Cantor Fitzgerald’s investment negotiations with Tether. Bloomberg reported the investment was in the form of a $600 million convertible note, giving the financial services firm a 5% stake. The book value of that stake has risen significantly. If Tether achieves its reported $500 billion valuation target in recent talks with potential investors, that stake could be worth $25 billion—more than the value of all the company’s other assets combined.

After Trump’s re-election in November 2024, Lutnick helped lead his transition team, and Cantor continued working with Tether on deals. In December 2024, Cantor arranged a deal for Tether to invest $775 million in the loss-making video-sharing platform Rumble Inc. In April 2025, Tether, Cantor, and SoftBank Group announced the formation of Bitcoin treasury management company Twenty One Capital Inc.

Twenty One Capital listed on the New York Stock Exchange in December 2025

In July 2025, Trump signed the GENIUS Act, landmark legislation for the stablecoin industry. The act contained several provisions favorable to Tether, such as providing a three-year grace period for the El Salvador-based company before it must comply with U.S. regulations.

White House spokesperson Kush Desai, responding to questions about Lutnick’s divestiture and the Tether loan, said: “The only special interest guiding the Trump administration’s decisions is the best interest of the American people. By securing historic trade and investment deals, leveling the playing field, and creating jobs for American workers, Secretary Lutnick has always put the American people and America first.”

In February 2025, Lutnick handed over the chairman and CEO roles at Cantor Fitzgerald to his 28-year-old son, Brandon. Brandon had worked with Tether in Lugano, Switzerland, and recently described his “growing friendship” with Tether CEO Paolo Ardoino.

As a Wall Street billionaire, Lutnick faced a complex task for his divestiture. His financial disclosure listed over 800 assets, from stocks and apartment complexes to a satellite company. An official involved in the filings, who requested anonymity, said Lutnick held stakes in so many subsidiaries and joint ventures that lawyers reviewing his divestiture agreements worried they couldn’t track where all his financial interests were going.

In January 2025, Lutnick sought to allay these concerns by submitting an ethics agreement stating he would seek to divest his holdings and resign from management positions at his companies. As some transactions required regulatory approval and could take time, Lutnick said that unless granted an ethics waiver, he would not “participate personally and substantially in any particular matter that would have a direct and predictable effect on the financial interests of the entities being divested.”

July 2025, U.S. President Donald Trump displays a copy of the GENIUS Act in Washington

Early in the administration, Lutnick joined the crypto policy steering group, then agreed in May to lock in the price of his assets, forgoing future appreciation. On July 8, he received a limited ethics waiver allowing him to participate in “high-level strategy and execution” discussions on issues that might have a “minimal impact” on the companies he sold, but he was barred from matters directly affecting them. He completed the sale of his Cantor assets in October.

Lutnick was one of about a dozen members of the Presidential Task Force on Digital Asset 市場s, which held over a thousand meetings with industry officials in late winter and spring last year. On July 30, the task force released a 160-page report outlining the administration’s plans. Three of Lutnick’s colleagues at the Commerce Department helped write the document.

The task force’s recommendations included “promoting the development and growth of stablecoins,” a market where Tether commands roughly two-thirds share. The report stated: “Policymakers should encourage the adoption of stablecoins to enhance the dollar’s dominance in the digital age.” The task force praised the GENIUS Act, which both Cantor Fitzgerald and Tether had lobbied for heavily.

Before his confirmation hearing, when asked about his relationship with Tether, Lutnick responded that he would “faithfully discharge the duties of the office in accordance with applicable government ethics laws and regulations.”

On May 19, Cantor Fitzgerald and its affiliates announced they had reached an agreement to sell most of their business to Lutnick’s children, calling it a step toward “next-generation succession.”

The asset sale was completed on October 6. Lutnick’s stakes in Cantor Fitzgerald’s publicly traded affiliates—commercial real estate firm Newmark Group Inc. and brokerage BCG Group Inc.—were repurchased by Cantor and the two companies for a total of over $350 million.

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