HOWARD Lutnick is moving to strengthen his alliance with one of the most important and controversial names in the digital asset business: Tether Holdings.
Lutnick is in talks to deepen the financial ties between his businesses and the company behind the world’s largest stablecoin, according to sources familiar with the matter.
Cantor Fitzgerald LP is discussing receiving support from Tether for its planned multi-billion US dollar programme to lend US dollars to clients who put up Bitcoin as collateral, said the sources, who asked not to be named as they were not authorised to speak publicly.
Funding for the programme will start at US$2 billion and is expected to eventually reach into the tens of billions, a separate source said.
Tether currently uses Cantor’s custody business to hold the billions of US dollars of US Treasuries that support the value of its dominant USDT stablecoin. That custody relationship earns Cantor tens of millions of US dollars a year, according to sources familiar with the matter.
Lutnick is co-chair of President-elect Donald Trump’s transition team and Trump’s pick to run the Commerce Department.
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Trump has been a recent and vocal proponent of digital assets such as Bitcoin and has promoted a crypto project associated with his sons called World Liberty Financial. The Trump transition team is mulling whether to create a new White House post for crypto policy, Bloomberg reported previously.
While Cantor has been trying to hire staff to launch the programme, it has not formally started lending. If Tether takes part, the crypto firm would likely be one of multiple financial contributors, one of the sources said.
A spokesperson for Cantor declined to comment. Executives at Tether could not be immediately reached for comment outside of normal business hours.
Tether has faced scrutiny from governments including the US for possible violations of sanctions and anti-money laundering rules. The company has denied the claims.
Lutnick’s firm has also struck a deal to invest in Tether, The Wall Street Journal reported on Saturday (Nov 23), adding that Cantor’s stake has been valued at as much as US$600 million and amounts to about a 5 per cent ownership interest.
As Lutnick moves to run the Commerce Department, he is preparing to hand over his firm’s relationship with Tether, which he largely controls, to colleagues, according to two sources briefed on the matter. His son, Brandon Lutnick, works at Cantor as a trader and previously interned with Tether in Lugano, Switzerland. BLOOMBERG
