Key takeaways
- Cantor moved to secure 5% of Tether ownership in a deal worth around $600 million.
- The company’s CEO, Howard Lutnick, will resign from Cantor Fitzgerald following his confirmation as Commerce Secretary.
Chancellor Fitzgerald, led by Donald Trump’s Commerce Secretary nominee Howard Lutnick, reached an agreement to acquire a 5% stake in Tether, according to a Nov. 23 filing. Report from the Wall Street Journal, citing business colleagues familiar with the matter.
The deal, worth about $600 million, was disclosed after Lutnick is named economic policy officer in the incoming Trump administration. The CEO of Cantor is a vocal supporter of stablecoins, specifically Tether’s USDT and Circle’s USDC.
“Dollar hegemony is fundamental to the United States of America. It’s important to us, to our economy,” Lutnick said said at the Chainalysis Links conference in April. “That’s why I’m a fan of properly backed stablecoins. I’m a fan of Tether. I’m a fan of Circle.”
Cantor Fitzgerald manages a large inventory of US Treasuries backing the USDT stablecoin, which has surpassed $130 billion in market capitalization.
The partnership, due in 2021, is strictly professional and focuses on managing reserves rather than regulatory influence, a Tether spokesman commented before Lutnick’s nomination as Commerce Secretary.
“The claim that Lutnick’s involvement in a transition team somehow translates (into) influence over regulatory action is laughable,” the Tether spokesman said.
Lutnick intends to step down from Cantor once the Senate has confirmed his role as US Commerce Secretary. He said he would divest his interests to meet the government’s ethical standards.
Tether is under scrutiny for potential violations of anti-money laundering and sanctions laws, the WSJ reported last month. The investigation focuses on whether Tether’s USDT stablecoin has been used by third parties to finance illegal activities.
The company has denied the allegations, calling them “outrageous” and claiming the claims are based on speculation without verified sources. CEO Paolo Ardoino referred to the report as “old noise”.
