Howard Lutnick, the candidate for the position of U.S. Secretary of Commerce, is being scrutinized by Congress because of his connections to Tether and worries that its dollar-pegged stablecoin, USDT, UPS Stock Could Reach a Five-Year Nadir serve as a means for unlawful actions.
During his Senate approval hearing, the head of Cantor Fitzgerald addressed concerns regarding Tether’s possible involvement in enabling illicit finance.
Tether USDT and its holdings have been a source of disagreement for a long time, with legislators worrying about the absence of expert audits. A key charge is that, in the absence of suitable oversight, Tether may be hiding as much as $19 billion connected to questionable transactions.
In 2023, Republican politicians questioned the Justice Department about whether Binance and Tether were facilitating terrorist funding. And in 2024, U.S. investigators apparently started an investigation into Tether’s activities, suspecting sanctions breaches and money laundering, according to the Wall Street Journal.
Tether and its chief executive officer, Paolo Ardoino, have firmly refuted these claims, asserting that there is no current investigation. To reassure users, the company publishes quarterly attestations, but many observers find these reports unpersuasive.
Adding to the debate, the organization behind USDT paid a $41 million civil fine in 2021 as part of an agreement with the Commodity Futures Trading Commission (CFTC). The CFTC claimed that Tether made incorrect assertions regarding USDT being completely supported by reserves at all times.
At the hearing, Senator Maria Cantwell, a prominent Democrat on the Senate Commerce Committee, questioned Lutnick on the subject of stablecoin audits. He replied that “dollar stablecoins should undergo auditing” and be “100% backed by U.S. Treasury bills.”
Cantwell also voiced worries regarding claims that criminal organizations in China, Russia, and North Korea are utilizing USDT for unlawful transactions.
Luttig noted that government-issued money is still the leading means for unlawful individuals, and pioneers shouldn’t be held responsible for the abuse of tech.
Luttig expressed at the session, “I will relinquish, I will auction off all my shares, my commercial stakes, all my possessions, everything.”
Luttig has consented to depart Tether caretaker Cantor Fitzgerald on account of a clash of concerns in possessing the post. In this capacity, he will center around employment generation and cooperate with Trump’s crypto committee to cultivate virtual property regulations. President Trump has designated Luttig to be the succeeding United States Secretary of Commerce and is awaiting Senate endorsement. Luttig countered, “This resembles faulting Apple since crooks utilize iPhones.”
