Warren scrutinizes Commerce pick’s ties to Tether

US Senator Elizabeth Warren raised concerns regarding Howard Lutnick, the CEO of Cantor Fitzgerald and nominee for Commerce Secretary, due to his firm’s involvement with stablecoin issuer Tether. In a letter dated January 27, Warren expressed "serious concern" over Lutnick’s "deep involvement with and support for Tether," which she described as a facilitator of criminal activity and a favorite among outlaws.

Warren, the leading Democrat on the Senate Banking Committee, acknowledged Lutnick’s agreement to divest his interest in Cantor Fitzgerald, which holds a 5% stake in Tether and serves as its asset manager. Despite this divestment, Warren remains skeptical about Lutnick’s potential conflict of interest and his ability to prioritize the interests of the American people over his financial ties if confirmed.

The senator pointed out that Lutnick’s confirmation would grant him "extraordinary access" to President Trump and officials responsible for Tether’s regulation. She posed a series of questions to Lutnick, including details about his financial stake in Tether and any discussions with Trump administration officials regarding the cryptocurrency firm.

Warren’s inquiry also extends to Cantor Fitzgerald’s compliance efforts with Know Your Customer rules, international sanctions, and Anti-Money Laundering laws in relation to Tether. She has requested responses to her 13 questions by February 10, although she is not part of the Senate Commerce, Science, and Transportation Committee, which will conduct Lutnick’s confirmation hearing.

While highlighting the use of Tether’s stablecoin for illicit activities such as money laundering and financing of North Korea’s nuclear program, Warren also noted Tether’s recent cooperation with law enforcement. The company aided in freezing assets linked to a European money laundering operation on January 27 and previously assisted the FBI in recovering funds from crypto scammers.

Senator Warren, known for her caution towards the crypto industry, has pushed for stricter regulations. She introduced the Digital Asset Anti-Money Laundering Act in 2022 and 2023, aiming to integrate the crypto sector into existing anti-money laundering and counter-terrorism financing frameworks. This legislative effort has been met with criticism from the Chamber of Digital Commerce and former military and national security officials, who argue that it could drive the digital asset industry overseas and pose national security risks.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.