Written by: David Kocieniewski, Anthony Cormier, Todd Gillespie, Bloomberg
Compiled by: Chopper, Foresight News
Last October, U.S. Commerce Secretary Howard Lutnick sold his multibillion-dollar stake in Cantor Fitzgerald to a trust benefiting his four children. This arrangement was intended to comply with federal ethics rules for the financial services firm he has led for over three decades.
Around the same time, one of these trusts made an unusual move. The "Dynasty Trust A," which benefits all four children, borrowed an undisclosed amount from the stablecoin issuer Tether. Through a 2024 investment, Tether has helped Cantor Fitzgerald's assets soar to new heights, and its overseas controlling shareholders have been advocating for more favorable regulatory policies for U.S. cryptocurrencies.
A spokesperson for Cantor Fitzgerald and Lutnick's children declined to discuss the loan size or whether the funds were used to finance any part of the asset sale. But spokesperson Stan Neve stated that the acquisition "was financed through multiple funding sources, multiple companies, and multiple trusts, at market rates and market prices," in compliance with the federal ethics agreement signed by Howard Lutnick. This loan had not been previously reported.
February 2026, Tether logo on cushions at the Bithumb exchange in Seoul
A credit filing submitted on October 7 in New York State shows that the loan is collateralized by "all assets" held by the trust, including any assets it may acquire in the future. A Cantor executive familiar with the transaction said the loan is backed by a convertible bond that gives Cantor the right to acquire a 5% stake in Tether.
According to a recent filing by the financial services company, Dynasty Trust A's assets include more than half of Cantor Fitzgerald's equity. But Neve stated that, through another independently managed entity, control of the company is "held entirely by the next generation of the Lutnick family and has never been pledged."
By selling the assets, Lutnick met the requirements of federal regulations designed to eliminate potential conflicts of interest for presidential appointees. However, experts who reviewed the transaction documents say that if the loan helped facilitate Lutnick's sale of equity to his children's trust, it undermines the intent of the federal divestiture requirements.
"This transaction, which was theoretically supposed to eliminate a conflict of interest, actually created a new one," said Kathleen Clark, a law professor at Washington University in St. Louis and former ethics legal counsel for the District of Columbia. She stated that if Tether's loan helped Lutnick complete a transaction that ultimately benefits both him and his children, it means his family owes Tether another favor. This also raises concerns that Howard Lutnick might use his government position to benefit Tether and his children rather than serving the public interest.
A Cantor Fitzgerald executive familiar with the matter disputed Clark's view, stating that the loan does not alter the "already strong economic and strategic alliance" between Tether and the company. A Tether spokesperson did not respond to requests for comment.
A U.S. Commerce Department spokesperson 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 divestiture and recusal requirements, and will continue to do so."
The amount of the loan provided by Tether to the trust remains unclear, and the price at which Lutnick's children acquired their father's equity has not been disclosed. But as CEO and chairman, Lutnick held the vast majority of the company's equity. After the investment in Tether in 2024, the book value of the company surged by billions of dollars.
Tether's core business is issuing the stablecoin 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, liquid reserve assets as backing. 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 generating $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 affiliated companies of making misleading statements about losses and reserves, resulting in fines of approximately $60 million, though the companies did not admit any wrongdoing. According to two people familiar with the matter, Tether was also investigated by the U.S. Department of Justice in 2024, though the current status of the investigation is unclear.
Meanwhile, the Donald Trump administration relaxed enforcement against cryptocurrencies, disbanding teams at the Justice Department and the Securities and Exchange Commission responsible for investigating cryptocurrency-related crimes. In 2024, a United Nations report called Tether the "preferred tool" for Southeast Asian gangs and money launderers. Tether responded at the time that it cooperates with law enforcement agencies worldwide and conducts comprehensive, high-standard monitoring of its tokens.
Before partnering with Cantor in 2021, most U.S. banks avoided doing business with Tether. Lutnick has said that he personally negotiated the partnership with the company and reviewed its books to ensure it held all the assets it claimed. At his Senate confirmation hearing, he stated that Tether executives assured him they would cooperate with law enforcement and take a series of measures to curb money laundering.
In April 2024, Lutnick participated in Cantor Fitzgerald's investment negotiations with Tether. Bloomberg reported that the investment took the form of a $600 million convertible bond, giving the financial services company a 5% equity stake. The book value of this stake has risen significantly, and if Tether achieves its goal of a $500 billion valuation in recent talks with potential investors, the stake could be worth $25 billion—more than the sum of all the company's other assets.
After Trump's re-election in November 2024, Lutnick helped lead his transition team, while Cantor continued to work with Tether on various deals. In December 2024, Cantor arranged a deal for Tether to invest $775 million in the loss-making video-sharing platform Rumble Inc. In April 2025, Tether and Cantor jointly with SoftBank Group announced the formation of Bitcoin treasury management company Twenty One Capital Inc.
Twenty One Capital listed on the New York Stock Exchange in December 2025
In July 2025, Trump signed the GENIUS Act, landmark legislation for the stablecoin industry. The act included several provisions favorable to Tether, such as providing a three-year grace period for the El Salvador-based company before it must comply with U.S. regulations.
White House spokesperson Kush Desai, responding to questions about Lutnick's divestiture and the Tether loan, said: "The only special interest guiding the Trump administration's decisions is the best interest of the American people. By achieving historic trade and investment agreements, leveling the playing field, and creating jobs for American workers, Secretary Lutnick has always put the American people and America first."
In February 2025, Lutnick handed over the roles of chairman and CEO of Cantor Fitzgerald to his 28-year-old son, Brandon. Brandon had worked with Tether in Lugano, Switzerland, and recently described his "deepening friendship" with Tether CEO Paolo Ardoino.
As a Wall Street billionaire, Lutnick faced a complex task in divesting his assets. His financial disclosure listed over 800 assets, from stocks and apartment complexes to a satellite company. An official involved in the disclosure, who requested anonymity, said Lutnick held stakes in so many subsidiaries and joint ventures that lawyers reviewing his divestiture agreement were concerned they couldn't trace where all his financial interests were going.
In January 2025, Lutnick sought to allay these concerns by submitting an ethics agreement stating he would seek to divest his equity stakes and resign from management positions in his companies. Since some transactions required regulatory approval and could take time, Lutnick said that unless granted an ethics waiver, he would not "participate personally and substantially in any particular matter that would directly and predictably affect the divested enterprises."
July 2025, U.S. President Donald Trump displays a copy of the GENIUS Act in Washington
Early in the administration, Lutnick joined the cryptocurrency policy steering group, then agreed in May to lock in the price of his assets, forgoing future appreciation. On July 8, he received a limited ethics waiver allowing him to participate in "high-level strategic and execution" discussions on issues that could have a "minimal impact" on the companies he sold but was barred from participating in matters that would directly affect those companies. He completed the sale of the Cantor assets in October.
Lutnick is one of more than a dozen members of the President's Working Group on Digital Asset Markets, which held over a thousand meetings with industry officials in the late winter and spring of last year. On July 30, the group released a 160-page report outlining the administration's plans. Three of Lutnick's colleagues at the Commerce Department contributed to the document.
The group's recommendations included "promoting the development and growth of stablecoins," a market where Tether holds about two-thirds share. 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, for which both Cantor Fitzgerald and Tether had lobbied heavily.
Before his confirmation hearing, Lutnick was asked about his relationship with Tether and responded that he would "faithfully perform his duties in accordance with applicable government ethics laws and regulations."
On May 19, Cantor Fitzgerald and its affiliates announced they had reached an agreement to sell most of their business to Lutnick's children, calling it a move toward "next-generation succession."
The asset sale was completed on October 6. Lutnick's stakes in Cantor Fitzgerald's publicly traded affiliates—commercial real estate company Newmark Group Inc. and brokerage firm BCG Group Inc.—were repurchased by Cantor and the two companies for a total of over $350 million.
