Senate Democrats are pressing Cantor Fitzgerald to clarify Tether's connections and Lutnick family

Senator Blumenthal asks Cantor Fitzgerald to disclose business dealings with Tether

U.S. Senator Richard Blumenthal wrote to Cantor Fitzgerald, a Wall Street financial institution, asking for records of the company's business relationship with Tether, the issuer of USDT. USDT is the world's largest stablecoin, a digital asset pegged to the US dollar and forms the foundation of the cryptocurrency economy. Based on the letter sent Thursday, Blumenthal also wanted to know how much Commerce Secretary Howard Lutnick's family benefited from the arrangement.

"It is disturbing that the lucrative business arrangement between Canto Fitzgerald and Tether comes at the expense of U.S. national security," Senator Blumenthal pointed out.

As the top Democratic member of the Senate Permanent Investigation Subcommittee, Blumenthal sent the letter to Brandon Lutnick, chairman of Canto Fitzgerald and son of Howard Lutnick. This is an information request letter with an expiration date of October 23, not a subpoena. The letter described the minority investigation as an investigation into "illegal use of cryptocurrencies and self-enrichment and profit-transfer between the Trump administration and cryptocurrency companies."

The letter did not accuse Canto Fitzgerald of violating specific laws, nor did it identify any wrongdoing. The letter asked how the company would ensure Tether complied with U.S. sanctions and anti-money laundering regulations, while the allegations against Tether and the Lutnik family were based on news reports and the previous work of its staff.

"Just as Tether has earned untold interest and investment gains through stablecoins used in these illegal activities, Canto Fitzgerald has also benefited from its relationship with Tether," Blumenthal wrote.

"In view of Tether's long-standing and deeply intertwined relationship with Canto Fitzgerald, as well as its important relationship in the Trump administration, I am writing to request information about your business cooperation with Tether and to understand your company's practices in detecting violations of U.S. Banking and Sanctions Laws," the senator added.

Blumenthal wrote in his letter that Lutnik has made more than $250 million in profits since President Donald Trump returned to office, including a $192 million dividend from Canto Fitzgerald. During the same period, he said, the value of Canto Fitzgerald's 5% stake in Tether climbed from $600 million to an estimated $10 billion, and the company was able to collect tens of millions of dollars in fees each year from assets it held for Tether.

Canto Fitzgerald serves as the custodian of Tether and is responsible for maintaining its reserves (i.e., supporting the cash and other positions of every USDT in circulation). Blumenthal pointed out that although Tether claims to operate in El Salvador,"the vast majority of its assets are still held by your company in the United States."

Howard Lutnik led Canto Fitzgerald until February 2025, when the Senate confirmed him as Commerce Secretary. The company is currently chaired by his son Brandon. The senator also asked for any loan or legal strategy terms that would allow Lutnik to transfer ownership of assets to his children.

This request is consistent with media reports that Tether reportedly provided an undisclosed amount to the trust fund of Lutnik's four children as they bought out their shares in Canto Fitzgerald. Senators Elizabeth Warren and Ron Wyden questioned Lutnik and Tether about this in April. When assets are transferred to the trust fund, the person under investigation no longer has legal ownership of the assets.

The letter arrived 10 days after the subcommittee's Democratic staff released a report titled "Tethered to Terrorism." The report found that of the 846 crypto-wallets (addresses where tokens are held) that were sanctioned or targeted for seizure, 84% used USDT exclusively or almost exclusively because of their association with Iran and its agents.

This main figure is based on two lists: 87% of the 757 wallets designated by Israel's Counter-Terrorism Financing Agency mainly use USDT for transactions; and 57% of the 101 wallets designated by the Treasury Department's Office of Foreign Assets Control (OFAC), which implements U.S. sanctions.

Tether issued a statement on the same day saying that about US$550 million in Iranian-related funds have been frozen this year, including US$344 million in April and more than US$130 million in July. Tether is able to lock wallets so internal tokens cannot be moved, but the statement did not directly respond to the report.

Blumenthal also requested Howard Lutnik's personal records about Tether during his tenure at Canto Fitzgerald, including "any discussions of Tether with the White House or state and federal regulators, and lobbying activities on Tether's behalf."

Other requests cover Canto Fitzgerald's customer due diligence policy (i.e., the company's review of transactions), whether the company has considered terminating its relationship with Tether, and its communications with the President's Digital Assets Advisory Council.

Canto Fitzgerald has until October 23 to respond. During this period, the letter asked the company to keep all documents, records and communications related to its Tether business relationship.