Written by: David Kocieniewski, Anthony Cormier, Todd Gillespie, Bloomberg

Translated by: Chopper, Foresight News

In October last year, U.S. Secretary of Commerce Howard Lutnick sold his billions of dollars in equity at Cantor Fitzgerald to a trust fund benefiting his four children. This financial services company, which he has led for over thirty years, arranged this deal to comply with federal ethics regulations.

Almost simultaneously, one of the trust funds made an unusual move. The "Dynasty Trust A," benefiting all four children, borrowed an undisclosed amount from the stablecoin issuer Tether. With an investment in 2024, Tether has helped Cantor Fitzgerald's assets soar to new heights, while its overseas controlling shareholders have been pushing for more favorable regulations for cryptocurrencies in the U.S.

Spokespersons for Cantor Fitzgerald and the Lutnick children declined to discuss the size of the loan and whether the funds were used to finance any part of the asset sale. However, spokesperson Stan Neve stated that the acquisition "was financed at market rates and market prices through multiple sources of funds, multiple companies, and multiple trust funds," in compliance with the federal ethics agreement signed by Howard Lutnick. This loan had not previously been reported by the media.

In February 2026, the cushions at Bithumb Exchange in Seoul featured the Tether logo

A credit document filed in New York on October 7 shows that the loan was secured by "all assets" held by the trust, including any assets it may subsequently acquire. A Cantor executive familiar with the deal stated that the loan was specifically secured by a convertible bond that gives Cantor the right to obtain a 5% stake in Tether.

According to a recent filing by the financial services company, the assets of Dynasty Trust A include more than half of Cantor Fitzgerald's equity. However, Neve stated that through another independently managed entity, control of the company "is entirely held 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 allow presidentially nominated officials to eliminate potential conflicts of interest. However, experts who reviewed the relevant transaction documents stated that if this loan aided Lutnick in selling equity to the children’s trust, then it violates the original intent of the federal asset divestiture requirements.

"This transaction was theoretically supposed to eliminate conflicts of interest, but in reality, it created new conflicts," said Kathleen Clark, a law professor at Washington University in St. Louis and former ethics counsel in Washington, D.C. She stated that if Tether's loan helped Lutnick complete a deal that ultimately "benefits him and his children," then his family owes Tether a favor. This raised further concerns that Howard Lutnick might use his government position to profit for Tether and his children, rather than serving the public interest.

A Cantor Fitzgerald executive familiar with the matter disagreed with Clark’s viewpoint, stating that this loan would not change the "already strong economic and strategic alliance" between Tether and the company. Tether's spokesperson did not respond to requests for comment.

A spokesperson for the U.S. Department of Commerce did not respond to a series of questions but sent a statement: "Minister Lutnick has fully complied with the terms of his ethics agreement, including all asset divestiture and avoidance requirements, and will continue to do so."

The amount of the loan Tether provided to the trust is not clear, nor has the purchase price for Lutnick's children acquiring their father's equity been disclosed. However, as CEO and Chairman, Lutnick holds the vast majority of the company's equity. After the investment in Tether in 2024, the company's valuation rose by billions of dollars on paper.

Tether's core business is issuing a stablecoin called USDT, which is a digital currency pegged to the U.S. dollar; holders can conduct instant, low-cost transactions outside the traditional banking system. For each USDT issued, Tether is supposed to hold high-quality, highly liquid reserve assets to back it. 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 making $10 billion in profit last year, with profit margins of 99%.

The success of this stablecoin company has also been accompanied by controversy. In 2021, U.S. regulators charged Tether and its affiliates with making misleading statements regarding losses and reserves, subsequently fining the companies about $60 million, although no wrongdoing was admitted. According to two informed sources, Tether also faced an investigation by the U.S. Department of Justice in 2024, although the current status of the investigation is unclear.

Meanwhile, the Trump administration relaxed enforcement against cryptocurrencies, dissolving teams responsible for investigating crypto-related crimes within the Department of Justice and the U.S. Securities and Exchange Commission. In 2024, a United Nations report identified Tether as the "preferred tool" of Southeast Asian gangs and money launderers. Tether responded at the time by stating that the company collaborates with law enforcement around the world to oversee its issued tokens comprehensively and to high standards.

Before forming a partnership with Cantor in 2021, most U.S. banks avoided doing business with Tether. Lutnick has stated that he personally negotiated the partnership with the company and reviewed their accounts to ensure they held all claimed assets. He said during the Senate nomination hearing that Tether executives assured him they would cooperate with law enforcement and take measures to curb money laundering.

In April 2024, Lutnick participated in negotiations for Cantor Fitzgerald's investment in Tether. Bloomberg reported that this investment was conducted in the form of a $600 million convertible bond, granting the financial services company a 5% stake. The book value of this stake has significantly increased, and if Tether achieves a $500 billion valuation target in recent negotiations with potential investors, the value of this stake could reach $25 billion—more than the total value of all the company's other assets.

In November 2024, after Trump was re-elected, Lutnick helped lead his transition team, and Cantor continued to work with Tether to advance various transactions. In December 2024, Cantor arranged a deal for Tether, investing $775 million in the struggling video-sharing platform Rumble Inc. In April 2025, Tether and Cantor together with SoftBank Group announced the establishment of a bitcoin treasury management firm, Twenty One Capital Inc.

Twenty One Capital was 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 bill includes several favorable provisions for Tether, such as a three-year grace period before the company headquartered in El Salvador must comply with U.S. regulations.

White House spokesperson Kush Desai, responding to questions regarding Lutnick’s asset divestiture and the Tether loan, stated: "The only special interest guiding the Trump administration’s decision-making is the best interest of the American people. By reaching historically significant trade and investment agreements, creating a level playing field and creating jobs for American workers, Secretary Lutnick consistently places the American people and America first."

In February 2025, Lutnick handed over the chairmanship and CEO position of Cantor Fitzgerald to his 28-year-old son Brandon. Brandon had previously collaborated with Tether in Lugano, Switzerland, and recently stated that he has established an "ever-deepening friendship" with Tether CEO Paolo Ardoino.

As a Wall Street billionaire, Lutnick faces a complex task in asset divestiture. His financial disclosure documents list over 800 assets, ranging from stocks and apartment buildings to a satellite firm. An official involved in the disclosure process, who requested anonymity, stated that Lutnick holds so many stakes in subsidiaries and joint ventures that the lawyers reviewing his asset divestiture agreements are concerned about clarifying the destinations of all his financial interests.

In January 2025, Lutnick attempted to alleviate these concerns by submitting an ethics agreement stating he would seek to divest his holdings and resign from management positions at his companies. Due to some transactions requiring regulatory approval, which could take a long time, Lutnick stated that unless he obtains an ethical waiver, he would not "personally and substantially participate in any specific matter that may benefit the divested companies."

In July 2025, U.S. President Donald Trump presents a copy of the GENIUS Act in Washington

At the beginning of the administration, Lutnick joined the cryptocurrency policy advisory group and later agreed in May to lock in his asset prices, foregoing future appreciation. On July 8, he received a limited ethical waiver allowing him to participate in "high-level strategic and execution" discussions on issues that might have "minimal impact" on his sold companies, but he was prohibited from participating in matters that would directly affect those companies. He completed the sale of Cantor assets in October.

Lutnick is one of a dozen members of the President's Digital Asset Market Working Group, which held over a thousand meetings with industry officials last winter and spring. On July 30, the group released a 160-page report outlining the government's relevant plans. Three of Lutnick's colleagues at the Department of Commerce participated in drafting the document.

The group's recommendations include "promoting the development and expansion of stablecoins," with Tether holding about two-thirds of the market share in this financial instrument. The report states: "Policymakers should encourage the adoption of stablecoins to enhance the dollar's dominance in the digital age." The group praised the GENIUS Act, and both Cantor Fitzgerald and Tether heavily lobbied for the bill.

Before the nomination hearing, Lutnick was asked about his relationship with Tether, and he 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 that they had reached an agreement to sell most of their business to Lutnick's children, stating that the move marks the company's transition to "the next generation of inheritance."

The asset sale was completed on October 6. Lutnick's stake in Cantor Fitzgerald’s publicly listed affiliates (commercial real estate firm Newmark Group Inc. and brokerage firm BCG Group Inc.) was repurchased by Cantor and the two aforementioned companies, totaling over $350 million.