The Lutnick family owes Tether a favor.
Written by: David Kocieniewski, Anthony Cormier, Todd Gillespie, Bloomberg
Compiled by: Chopper, Foresight News
In October last year, U.S. Secretary of Commerce Howard Lutnick sold his multi-billion dollar stake in Cantor Fitzgerald to a trust fund benefiting his four children. This financial services company, which he has led for over thirty years, made this arrangement to comply with federal ethics regulations.
Almost at the same time, one of the trust funds made an unusual move. The 'Dynasty Trust A', benefiting all four children, borrowed an undisclosed amount from stablecoin issuer Tether. With an investment in 2024, Tether has helped Cantor Fitzgerald's asset scale soar to new heights, while its overseas shareholders have been advocating for more favorable regulatory policies for U.S. cryptocurrency.
Spokespersons for Cantor Fitzgerald and Lutnick's children declined to discuss the loan amount and were unwilling to disclose whether the funds were used to finance any part of the asset sale. However, spokesperson Stan Neve stated that the acquisition was 'financed through multiple sources of funds, multiple companies, and multiple trusts, at market rates and market prices,' complying with the federal ethical agreement signed by Howard Lutnick. This loan had not been reported by the media previously.
In February 2026, the cushions at Seoul's Bithumb exchange displayed the Tether logo.
A credit document submitted in New York on October 7 showed that the loan was secured by 'all assets' held by the trust, including any assets that may be acquired subsequently. A Cantor executive familiar with the transaction indicated that this loan is specifically secured by a convertible bond that grants Cantor the right to acquire a 5% equity stake in Tether.
According to a recent filing by the financial services company, the assets of Dynasty Trust A include more than half of Cantor Fitzgerald's equity. However, Neve stated that the company's control 'is fully held by the next generation of the Lutnick family through another independently managed entity and has never been pledged.'
By selling assets, Lutnick met the requirements of federal regulations aimed at allowing presidential nominees to eliminate potential conflicts of interest. However, experts who reviewed the relevant transaction documents stated that if this loan assisted Lutnick in selling equity to his children's trust, then it would violate the intent of federal asset divestiture requirements.
'This transaction was theoretically supposed to eliminate conflicts of interest, but in reality, it created new conflicts,' said Kathleen Clark, a law professor at Washington University in St. Louis and former ethics counsel in the District of Columbia. She stated that if Tether's loan helped Lutnick complete this transaction 'that ultimately benefits both him and his children,' then his family owes Tether yet another favor. This also raises further concerns that Howard Lutnick may exploit government power to benefit Tether and his children rather than serve the public interest.
An executive at Cantor Fitzgerald familiar with the matter disputed Clark's viewpoint, stating that the loan would not change the 'already solid economic and strategic alliance' between Tether and the company. Tether's spokesperson did not respond to requests for comment.
A spokesperson for the U.S. Department of Commerce did not respond to a series of questions but sent a statement: 'Secretary Lutnick has fully complied with the terms of his ethical agreement, including all asset divestiture and avoidance requirements, and will continue to do so.'
The loan amount provided to the trust by Tether is still unclear, and the price at which Lutnick's children acquired their father's equity has not been disclosed. However, as the CEO and Chairman, Lutnick holds the vast majority of the company's shares. After investing in Tether in 2024, the company's valuation skyrocketed by billions of dollars on paper.
Tether's core business is issuing a stablecoin called USDT, which is a digital currency pegged to the U.S. dollar; holders can make instant, low-fee transactions outside the traditional banking system. For every USDT issued, Tether is supposed to hold high-quality, highly liquid reserve assets as backing. Last year, Tether disclosed that its reserves reached $192 billion; since 2021, Cantor has been earning fees by managing these funds. Tether's business profits are extremely high, reportedly achieving a profit of $10 billion last year, with a profit margin of 99%.
The success of this stablecoin company has also been accompanied by controversy. In 2021, U.S. regulators accused Tether and its affiliates of making misleading statements about losses and reserves, subsequently fining the companies approximately $60 million, but they did not admit to any wrongdoing. According to two informed sources, Tether was also investigated by the U.S. Department of Justice in 2024, although the current status of the investigation is unclear.
Meanwhile, the Donald Trump administration relaxed enforcement against cryptocurrencies, disbanding teams within the Department of Justice and the U.S. Securities and Exchange Commission responsible for investigating crypto-related crimes. In 2024, a United Nations report identified Tether as the 'preferred tool' of Southeast Asian gangs and money launderers. Tether responded at the time that the company collaborates with law enforcement agencies around the world to conduct comprehensive and high-standard monitoring of the tokens it issues.
Before forming a partnership with Cantor in 2021, most U.S. banks avoided doing business with Tether. Lutnick stated that he personally negotiated the partnership with the company and reviewed its accounts to ensure it held all the assets it claimed. He stated at the Senate nomination hearing that Tether executives assured him they would cooperate with law enforcement and take a series of measures to curb money laundering.
In April 2024, Lutnick participated in Cantor Fitzgerald's investment negotiations with Tether. Bloomberg reported that the investment was made in the form of $600 million in convertible bonds, granting the financial services company a 5% equity stake. The book value of this equity has significantly increased, and if Tether achieves a valuation target of $500 billion in recent negotiations with potential investors, the value of this equity could reach $25 billion—surpassing the total of all other company assets.
After Trump was re-elected in November 2024, Lutnick helped lead his transition team, while Cantor continued to work with Tether to advance various transactions. In December 2024, Cantor arranged a deal for Tether to invest $775 million in the unprofitable video-sharing platform Rumble Inc. In April 2025, Tether and Cantor, in collaboration with SoftBank Group, announced the establishment of a Bitcoin treasury management company, Twenty One Capital Inc.
Twenty One Capital was listed on the New York Stock Exchange in December 2025.
In July 2025, Trump signed the (GENIUS Act), a landmark piece of legislation for the stablecoin industry. The act includes several provisions favorable to Tether, such as a three-year grace period for the El Salvador-based company before complying with U.S. regulatory requirements.
White House spokesperson Kush Desai, in response to questions regarding Lutnick's asset divestiture and Tether loan, stated: 'The only special interest guiding decisions of the Trump administration is the best interest of the American people. By reaching historically significant trade and investment agreements, creating a fair competitive environment, and creating jobs for American workers, Secretary Lutnick has always placed the American people and America first.'
In February 2025, Lutnick handed over the positions of Chairman and CEO of Cantor Fitzgerald to his 28-year-old son Brandon. Brandon had previously collaborated with Tether in Lugano, Switzerland, and recently stated that he has established an 'ever-deepening friendship' with Tether's CEO, Paolo Ardoino.
As a Wall Street billionaire, Lutnick faces a complex task in asset divestiture. His financial disclosure documents list over 800 assets, ranging from stocks and apartment complexes to a satellite company. An official involved in the disclosure process, who requested anonymity, stated that Lutnick holds so many stakes in subsidiaries and joint ventures that lawyers reviewing his asset divestiture agreements are concerned about their ability to clarify the direction of all his financial interests.
In January 2025, Lutnick attempted to quell these concerns by submitting an ethical agreement stating that he would seek to divest his holdings and resign from managing his companies. Since some transactions require regulatory approval and may take time, Lutnick indicated that he would not 'personally and substantially participate in any specific matters that could benefit the companies he is divesting from' unless he receives an ethical exemption.
In July 2025, U.S. President Donald Trump showcased a copy of the (GENIUS Act) in Washington.
In the early days of the government, Lutnick joined the cryptocurrency policy advisory group and later agreed in May to lock in the price of his assets, foregoing future appreciation. On July 8, he received a limited ethical exemption, allowing him to participate in 'high-level strategy and execution' discussions on topics that might have 'minimal impact' on the businesses he sold, but he was prohibited from participating in matters that would directly affect those businesses. He completed the sale of Cantor assets in October.
Lutnick is one of a dozen members of the presidential Digital Asset Market Working Group, which held over a thousand meetings with industry officials in late winter and spring last year. On July 30, the group released a 160-page report outlining the government's relevant plans. Three of Lutnick's colleagues from the Department of Commerce participated in drafting the document.
The group's recommendations include 'promoting the development and growth of stablecoins,' with Tether holding about two-thirds of the market share in this financial instrument. The report stated: 'Policymakers should encourage the adoption of stablecoins to enhance the dollar's dominance in the digital age.' The group expressed appreciation for the (GENIUS Act), and both Cantor Fitzgerald and Tether heavily lobbied for the legislation.
Before the nomination hearing, Lutnick was asked about his relationship with Tether, to which he responded that he would 'faithfully perform his duties in accordance with applicable government ethics laws and regulations.'
On May 19, Cantor Fitzgerald and its affiliates announced that they had reached an agreement to sell most of their business to Lutnick's children, stating that this move marks the company's transition to 'the next generation of legacy.'
The asset sale was completed on October 6. Lutnick's equity in Cantor Fitzgerald's publicly listed affiliate companies (commercial real estate firm Newmark Group Inc. and brokerage firm BCG Group Inc.) was repurchased by Cantor and the aforementioned two companies for a total amount exceeding $350 million.