An Undisclosed Loan Exposes the Ties Between the U.S. Commerce Secretary and Tether
A previously unreported loan from Tether to a trust benefiting the children of US Commerce Secretary Howard Lutnick has raised ethical concerns. In October, Lutnick sold his multibillion-dollar stake in Cantor Fitzgerald to trusts for his four children to comply with federal ethics rules. Around the same time, one trust, Dynasty Trust A, borrowed an undisclosed sum from Tether, the stablecoin issuer. The loan was collateralized by the trust's assets, which include a majority stake in Cantor, and by a convertible note giving Cantor rights to 5% of Tether.
Ethics experts argue this transaction may violate the intent of federal divestiture requirements, as the loan from Tether—a firm with significant business ties to Cantor—could create a new conflict of interest. Cantor has managed Tether's reserves since 2021 and made a $600 million investment in Tether in 2024, which has appreciated significantly.
As Commerce Secretary, Lutnick has been involved in crypto policy, including the pro-industry GENIUS Act, which contained provisions beneficial to Tether. The White House and a Cantor spokesman stated that Lutnick has complied with all ethics agreements. The loan's terms and the sale price to Lutnick's children were not disclosed.
marsbit03/19 08:56
