Last October, U.S. Commerce Secretary Howard Lutnick sold his multibillion-dollar stake in Cantor Fitzgerald to a trust fund benefiting his four children. The financial services firm, which he had led for over three decades, made the arrangement to comply with federal ethics rules.
Almost simultaneously, one of the trust funds made an unusual move. The "Dynasty Trust A," benefiting all four children, borrowed an undisclosed sum from the stablecoin issuer Tether. Through an investment slated for 2024, Tether has helped propel Cantor Fitzgerald's assets to new heights, with its overseas controlling shareholders also advocating for more favorable U.S. cryptocurrency regulations.
Spokespersons for Cantor Fitzgerald and Lutnick's children declined to discuss the loan amount or whether the funds were used to finance any aspect of the asset sale. However, spokesperson Stan Neve stated that the acquisition was financed "through various funding sources, multiple companies, and multiple trust funds at market rates and prices," in accordance with the federal ethics agreement signed by Howard Lutnick. This loan had not been previously reported by the media.
A loan document filed in New York on October 7th shows that the loan is secured by the "all assets" held by the trust, including any assets that may be acquired subsequently. A Cantor executive familiar with the transaction noted that the loan is specifically secured by a convertible bond that grants Cantor the right to obtain a 5% stake in Tether.
According to a recent disclosure by this financial services company, Dynasty Trust A's assets include over half of Cantor Fitzgerald's equity. However, Neve stated that, through another independent management entity, the company's control "is fully held by the next generation of the Lutnick family and has never been pledged."
By selling assets, Lutnick met the requirements of federal regulations aimed at having presidential nominees' officials eliminate potential conflicts of interest. However, experts who have reviewed the relevant transaction documents say that if this loan helped Lutnick sell equity to the children's trust, it would violate the original intent of the federal divestiture requirements.
"In theory, this transaction should have eliminated the conflict of interest, but in reality, it has created a new conflict," said Kathleen Clark, a law professor at Washington University in St. Louis and former ethics counselor for the District of Columbia. She stated that if Tether's loan helped Lutnick complete this "ultimately benefiting both himself and his children" transaction, then his family owes Tether a favor. This also raises more concerns that Howard Lutnick might use his government position to benefit Tether and his children, rather than serve the public interest.
A Cantor Fitzgerald executive familiar with the matter disagreed with Clark's view, stating that this loan would not alter the "already robust economic and strategic alliance" between Tether and the company. A Tether spokesperson did not respond to a request for comment.
A U.S. Department of Commerce spokesperson did not respond to a series of questions but sent a statement: "Minister Lutnick has fully complied with his ethical agreement terms, including all divestiture and recusal requirements, and will continue to comply."
The amount of the loan provided to the trust by Tether is not yet clear, and the price at which Lutnick's children acquired their father's equity has not been disclosed. However, as CEO and Chairman, Lutnick holds the vast majority of the company's equity. Following the 2024 investment in Tether, the company's valuation skyrocketed by billions of dollars.
Tether's core business is issuing a stablecoin called USDT, which is a digital currency pegged to the dollar; holders can engage in instant, low-fee transactions outside the traditional banking system. For each USDT issued, Tether is supposed to hold high-quality, highly liquid reserve assets as support. Last year, Tether disclosed that its reserve scale reached $192 billion; since 2021, Cantor has been earning fees by managing these funds. Tether's business profit is extremely high, reportedly achieving a $10 billion profit last year, with a profit margin of up to 99%.
The success of this stablecoin company has also been accompanied by controversy. In 2021, U.S. regulatory authorities accused Tether and its affiliate companies of making misleading statements about its reserves in a loss situation. Subsequently, these companies were fined approximately $60 million but did not admit to any wrongdoing. According to two sources familiar with the matter, Tether was also under investigation by the U.S. Department of Justice in 2024, although the current status of the investigation is unclear.
Meanwhile, the Donald Trump administration relaxed enforcement efforts on cryptocurrency, disbanding teams within the Department of Justice and the U.S. Securities and Exchange Commission responsible for investigating cryptocurrency-related crimes. In 2024, a United Nations report referred to Tether as the "tool of choice" for Southeast Asian gangs and money launderers. At that time, Tether responded by stating that the company collaborates with law enforcement agencies worldwide and conducts comprehensive, high-standard monitoring of its issued tokens.
Prior to its partnership with Cantor in 2021, most U.S. banks had steered clear of doing business with Tether. Lutnick stated that he personally negotiated the partnership with the company and reviewed its accounts to ensure it held all the assets it claimed. During a Senate confirmation hearing, he stated that Tether executives assured him they would cooperate with law enforcement and take a series of measures to curb money laundering.
In April 2024, Lutnick was involved in Cantor Fitzgerald's investment negotiations with Tether. Bloomberg reported that this investment took the form of a $6 billion convertible bond, giving the financial services company a 5% stake. The book value of this stake has risen significantly, and if Tether achieves its $500 billion valuation target in recent negotiations with potential investors, the value of this stake could reach $25 billion—exceeding the total sum of the company's other assets.
In November 2024, following Trump's reelection, Lutnick assisted in leading his transition team, while Cantor continued to collaborate with Tether to advance various transactions. In December 2024, Cantor arranged a deal for Tether to invest $775 million in the loss-making video-sharing platform Rumble Inc. In April 2025, Tether and Cantor, in partnership with SoftBank Group, announced the establishment of the Bitcoin Treasury Management company, Twenty One Capital Inc.
In July 2025, Trump signed the GENIUS Act, a landmark piece of legislation for the stablecoin industry. The act included several provisions favorable to Tether, such as granting the El Salvador-based company a three-year grace period before having to comply with U.S. regulatory requirements.
White House spokesperson Kush Desai, in response to questions regarding the Lutnick asset divestiture and Tether loan, stated: "The sole special interest guiding the Trump administration's decisions is the utmost interest of the American people. By achieving historic trade and investment agreements, fostering a fair competitive environment, and creating job opportunities for American workers, Secretary Lutnick has always prioritized the American people and the United States."
In February 2025, Lutnick passed on the role of Chairman and CEO of Cantor Fitzgerald to his 28-year-old son, Brandon. Brandon had previously collaborated with Tether in Lugano, Switzerland, and recently claimed to have developed an "increasingly deep friendship" with Tether's CEO, Paolo Ardoino.
As a Wall Street billionaire, Lutnick faced a complex task regarding asset divestiture. His financial disclosure listed over 800 assets, ranging from stocks and apartment buildings to a satellite company. An official involved in the disclosure process, who requested anonymity, indicated that Lutnick's ownership of so many subsidiaries and joint ventures was to the extent that even the lawyers reviewing his asset divestiture agreement were concerned that they could not untangle the full extent of his financial interests.
In January 2025, Lutnick sought to address these concerns by submitting an ethics agreement, stating that he would seek to divest his equity holdings and resign from management positions in his companies. Due to some transactions requiring regulatory approval, which could be time-consuming, Lutnick stated that unless granted an ethical waiver, he would not "personally and substantially participate in any particular matter that could benefit the specific entities from which he divested."
Early in his government tenure, Lutnick joined the cryptocurrency policy advisory group and later in May agreed to lock in the prices of his assets, forfeiting any future appreciation. On July 8, he received a limited ethics waiver allowing him to participate in "high-level strategic and execution" discussions on issues that may have a "minimal impact" on the companies he sold, but he was barred from engaging in matters directly affecting those entities. He completed the sale of Cantor assets in October.
Lutnick is one of over a dozen members of the Presidential Digital Asset Market Working Group, which held over a thousand meetings with industry officials last late winter and spring. On July 30, the group released a 160-page report outlining the government's related plans. Lutnick's three Commerce Department colleagues were involved in drafting the document.
The group's recommendations include "advancing the development and growth of stablecoins," with Tether holding about two-thirds of the market share in this financial tool. The report stated, "Policymakers should encourage the adoption of stablecoins to enhance the dollar's dominance in the digital age." The group lauded the "GENIUS Act," with both Cantor Fitzgerald and Tether vigorously lobbying for the bill.
Prior to his confirmation hearing, Lutnick was asked about his relationship with Tether, to which he responded that he would "faithfully fulfill 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, marking a step towards the "next generation legacy" of the company.
The asset sale was completed on October 6. Lutnick repurchased equity in Cantor Fitzgerald-listed affiliate companies (commercial real estate firm Newmark Group Inc. and brokerage firm BCG Group Inc.) from Cantor and the two aforementioned companies, totaling over $3.5 billion.
