Cantor Fitzgerald Takes 5% Stake in Tether in Deal Worth Up to $600M

Financial services firm Cantor Fitzgerald has reportedly purchased a 5% stake in Tether, the leading global stablecoin issuer, in a transaction valued at up to $600 million.

The deal, completed within the last year, allows the firm to potentially leverage the political influence of its CEO, Howard Lutnick, who was recently named U.S. President-Elect Donald Trump’s Secretary of Commerce.

According to a November 24 report by the Wall Street Journal, Cantor Fitzgerald’s involvement could strengthen Tether’s position as regulatory scrutiny intensifies.

Tether Faces Ongoing Controversy

Tether has been under investigation by the U.S. Attorney’s Office for the Southern District of New York concerning allegations that its stablecoin, USDT, is used in illicit activities, including terrorism financing.

Amid these challenges, Lutnick’s political influence may be crucial in overcoming regulatory obstacles.

Giancarlo Devasini, Tether’s largest shareholder, reportedly expressed confidence in Lutnick’s ability to “defuse threats facing Tether,” according to sources cited by the WSJ.

Lutnick, who has served as a transition advisor to Trump, is currently vetting candidates for key government positions, some of which could directly affect Tether’s oversight.

He is expected to resign as Cantor Fitzgerald’s CEO following Senate confirmation of his cabinet appointment.

WSJ on Tether…
“Devasini said privately earlier this yr that Lutnick will use his political clout to try to defuse threats facing Tether.”
“Cantor, which is majority-owned by Lutnick, holds most of Tether’s $134bil in assets.”
Cantor apparently has 5% stake in Tether as well. pic.twitter.com/QHOWsvY4bq

— Nate Geraci (@NateGeraci) November 24, 2024

Cantor Fitzgerald has served as a key banking partner for Tether while many other financial institutions have distanced themselves from the stablecoin issuer.

The firm holds a substantial portion of Tether’s $134 billion in reserves, primarily invested in U.S. Treasury bills, highlighting its role in maintaining USDT’s dollar peg.

Lutnick has publicly supported Tether’s financial stability and highlighted the utility of dollar-backed stablecoins in nations experiencing high inflation, such as Argentina, Turkey, and Venezuela.

Additionally, Cantor Fitzgerald’s recent entry into Bitcoin lending, announced at the Bitcoin 2024 conference, signals its expanding presence in the cryptocurrency sector.

Lutnick announced plans for a $2 billion Bitcoin lending program designed to offer leverage to Bitcoin holders.

U.S. Stablecoin Market Remains Unregulated

Notably, the stablecoin market, currently valued at over $140 billion, remains unregulated in the United States.

Recently, Senators Cynthia Lummis and Kirsten Gillibrand introduced a new bill to regulate stablecoins.

Under the proposed legislation, payment stablecoin issuers would face reserve and operational requirements, including the establishment of subsidiaries dedicated to issuing stablecoins.

The bill defines payment stablecoins as digital assets pegged to the U.S. dollar and intended for use as a means of payment or settlement.

Issuers would be obligated to convert these assets to dollars, and the assets themselves would not be classified as securities.

Eligible issuers would include non-depository trust companies registered with the Federal Reserve Board of Governors or depository institutions authorized as national payment stablecoin issuers, with oversight from both state and federal regulators.

The United Kingdom is also expected to implement stablecoin regulations within months, according to Dante Disparte, global head of policy at Circle.

Meanwhile, Singapore has already established formal laws governing the stablecoin industry.

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