An undisclosed loan reveals the ties between the U.S. Secretary of Commerce and Tether

Original Title: As Lutnick Sold Cantor to His Children, Tether Gave Them a Loan

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

Original Translation: Chopper, Foresight News

Last October, U.S. Commerce Secretary 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 simultaneously, one of the trust funds made an unusual move. The "Dynasty Trust A," benefiting all four children, borrowed an undisclosed amount from the 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. cryptocurrencies.

Spokespersons for Cantor Fitzgerald and the Lutnick children declined to discuss the size of the loan 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 trust funds, at market rates and market prices," in accordance with the federal ethics agreement signed by Howard Lutnick. This loan had not been reported by the media before.

In February 2026, a cushion at the Seoul Bithumb trading platform is printed with the Tether logo

A credit document submitted in New York State on October 7 shows that the loan was secured by "all assets" held by the trust, including any assets it may acquire in the future. A Cantor executive familiar with the transaction indicated that the loan was specifically backed by a convertible bond, which grants Cantor the right to acquire a 5% 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 control of the company "is entirely 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 presidentially nominated officials to eliminate potential conflicts of interest. However, experts who reviewed the relevant transaction documents indicated that if this loan aided Lutnick in selling equity to the children's trust, it would contradict the intent of federal asset divestiture requirements.

"This transaction was theoretically supposed to eliminate conflicts of interest, but in reality, it created new ones," said Kathleen Clark, a law professor at Washington University in St. Louis and former ethics counsel for the District of Columbia. She noted that if Tether's loan helped Lutnick complete a transaction that "ultimately benefits both him and his children," it means the family owes Tether a favor. This raises further concerns that Howard Lutnick might use government power to profit Tether and his children rather than serve the public interest.

A Cantor Fitzgerald executive familiar with the matter disagreed with Clark's view, stating that the loan would not change the "already strong 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 ethics agreement, including all asset 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 at which Lutnick's children acquired their father's equity has not been disclosed. However, as CEO and chairman, Lutnick holds the vast majority of the company's equity. After the investment in Tether in 2024, the company's valuation skyrocketed by billions of dollars.

Tether's core business is issuing a stablecoin called 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, highly liquid reserve assets to back it. Last year, Tether disclosed that its reserves reached $192 billion; since 2021, Cantor has been earning fees by managing these funds. Tether's business is highly profitable, reportedly achieving $10 billion in profit 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 regarding losses and reserves, resulting in fines of approximately $60 million, although they did not admit to any wrongdoing. According to two insiders, Tether was also under investigation 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 and disbanded teams within the Justice Department and the U.S. Securities and Exchange Commission responsible for investigating cryptocurrency-related crimes. In 2024, a United Nations report stated that Tether was the "preferred tool" of Southeast Asian gangs and money launderers. Tether responded at the time by stating that the company cooperates with law enforcement agencies worldwide to monitor its issued tokens comprehensively and to high standards.

Before reaching 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 testified at a Senate nomination hearing that Tether executives assured him they would cooperate with law enforcement and take measures to curb money laundering.

In April 2024, Lutnick participated in negotiations for Cantor Fitzgerald's investment in Tether. Bloomberg reported that the investment was made in the form of $600 million in convertible bonds, granting the financial services company a 5% stake. The book value of that stake has significantly increased, and if Tether achieves a valuation target of $500 billion in recent negotiations with potential investors, the value of this stake could reach $25 billion—more than the total value of all the company's other assets.

In November 2024, after Trump was re-elected, Lutnick helped lead his transition team, and 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 struggling video-sharing platform Rumble Inc. In April 2025, Tether and Cantor, along with SoftBank Group, announced the establishment of a Bitcoin treasury management company, Twenty One Capital Inc.

Twenty One Capital went public 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 Salvadoran company before it must comply with U.S. regulatory requirements.

White House spokesperson Kush Desai, in response to questions about Lutnick's asset divestiture and Tether loans, stated: "The only special interest guiding Trump administration decisions is the best interest of the American people. By reaching historic trade and investment agreements, creating a fair competitive environment, and generating jobs for American workers, Secretary Lutnick has always put 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 developed an "increasingly deep friendship" with Tether 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 the lawyers reviewing his asset divestiture agreements are concerned they cannot clarify the direction of all his financial interests.

In January 2025, Lutnick attempted to quell these concerns by submitting an ethics agreement stating he would seek to divest his holdings and resign from management positions in his companies. Since some transactions require regulatory approval, which may take time, Lutnick stated that unless he receives an ethical exemption, he will not "personally and substantially participate in any specific matters that may benefit the divested companies."

In July 2025, U.S. President Donald Trump showcases 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 his asset prices, foregoing future appreciation gains. On July 8, he received a limited ethical exemption allowing him to participate in "high-level strategic and execution" discussions on topics that may have "minimal impact" on the companies he sold, but he was prohibited from participating in matters that would directly affect those companies. He completed the sale of Cantor's assets in October.

Lutnick is one of a dozen members of the President's Digital Asset Market Working Group, which held over a thousand meetings with industry officials last winter and spring. On July 30, the group released a 160-page report outlining the government's relevant plans. Three of Lutnick's colleagues at the Department of Commerce participated in drafting the document.

The group's recommendations included "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 praised the GENIUS Act, and both Cantor Fitzgerald and Tether lobbied heavily for the act.

Before the nomination hearing, Lutnick was asked about his relationship with Tether, to which he responded that he would "faithfully fulfill 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 the business to Lutnick's children, stating that this move marks the company's transition to "the next generation of inheritance."

The asset sale was completed on October 6. Lutnick's equity in Cantor Fitzgerald's publicly traded affiliates (commercial real estate company 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.