Senator Blumenthal asked for records of Canto Fitzgerald's $10 billion TEDA holdings

Senators demand disclosure of details on Cantor Fitzgerald's connection to a $10 billion stake in Tether

U.S. investment bank Cantor Fitzgerald is facing intense scrutiny following a formal inquiry from Senator Richard Blumenthal. The inquiry aims to investigate the bank's lucrative partnership with stablecoin issuer Tether and explore the circumstances in which Commerce Secretary Howard Lutnick's family benefited from it.

Congressional investigation into the Tether Partnership

As the top Democratic member of the Senate Permanent Investigation Subcommittee, Blumenthal sent a letter on Thursday to Brandon Lutnick, chairman of Canto Fitzgerald. In his letter, he requested documents on how the investment bank monitored Tether's compliance with U.S. banking and sanctions regulations, and requested records of all communications involving Howard Lutnick, including his post-departure communications.

Blumenthal expressed concerns about national security in his letter, pointing out that although Canto Fitzgerald's business deal with Tether was lucrative, it "came at the expense of U.S. national security." He emphasized that both Tether and Canto Fitzgerald have benefited huge economic benefits from stablecoin activities, highlighting the potential risks brought by cooperation between the two parties.

As a veteran institution in the global financial services field, Canto Fitzgerald will acquire a 5% stake in Tether in 2024. In addition, the company holds custody of Tether's large U.S. Treasury bonds-a key component supporting the value of Tether's dollar peg. According to Blumenthal, with Donald Trump returning to the White House, the valuation of Canto's stake in Tether has soared from an estimated $600 million to $10 billion. He also pointed out that Howard Lutnik earned more than $250 million in earnings during this period, including a $192 million dividend from Canto Fitzgerald.

Concerns about compliance and illicit financial activity

The investigation follows recent discoveries by Senate Democratic investigators who allege that Iran's shadow banking network is using Tether-issued USDT tokens. Blumenthal has urged the U.S. Treasury and Justice Departments to investigate potential sanctions violations related to such allegations.

Tether, the largest issuer of dollar-linked stablecoins by market capitalisation, said it cooperated with law enforcement agencies and has frozen nearly $550 million of Iranian-related USDT since 2025. In response, Tether emphasized that it has been actively cooperating with U.S. and global law enforcement agencies over the past year to freeze large amounts of funds related to illegal activities.

Canto Fitzgerald's involvement in Tether's affairs dates back to 2021, when the bank began serving as the custodian of U.S. Treasury bonds that backed Tether's reserves. Howard Lutnik served as chairman and CEO of Canto Fitzgerald during this period and led the bank's investment in Tether in April 2024. Lutnik left Canto Fitzgerald after being confirmed as Commerce Minister in February 2025. Since then, his son Brandon has become chairman and the other son has been appointed vice chairman.

Blumenthal is seeking more records, including specific details of Lutnik's withdrawal from Canto, and information on whether Tether provided any loans or other financial support to Lutnik or his family to assist in transferring control of the company to his children.

Audit and partnership review under scrutiny

Blumenthal requested information on whether Canto Fitzgerald requested an independent audit of Tether, whether the bank had reviewed the termination of its partnership with the stablecoin issuer, and what steps had been taken to investigate allegations of illegal financial activity and sanctions evasion.

He asked Canto Fitzgerald to respond to his inquiries by October 23. Although Canto Fitzgerald and Tether were contacted by relevant media for comment, neither company immediately responded to clarifications.

Background:

Canto Fitzgerald is a large U.S. investment bank focusing on financial services such as investment banking, brokerage and trading; and Tether is a company that issues USDT, a dollar-linked stablecoin widely used in the cryptocurrency market, backed mainly by U.S. Treasury bonds and other reserves.