U.S. Senate Investigative Committee Sends Letter to Cantor Fitzgerald Requesting Clarification on Relationship with Stablecoin Issuer Tether

On October 8, Richard Blumenthal, the Democratic chief member of the U.S. Senate Permanent Subcommittee on Investigations, sent a letter to Cantor Fitzgerald Chairman Brandon Lutnick requesting clarification on the company's equity, custody, and compliance relationship with stablecoin issuer Tether. Brandon Lutnick is the son of Secretary of Commerce Howard Lutnick; Howard Lutnick handed over the company's management to his son after joining the cabinet.

The letter defines the scope of the investigation as the illegal use of cryptocurrency and the interests of government officials with crypto companies. Blumenthal wrote that Tether claims to operate in El Salvador, but the vast majority of its assets are in the U.S. and are custodied by Cantor. He requested clarification on how the company investigates allegations that USDT is used in Iran's shadow banking and to evade Russian sanctions, as well as the banking and sanctions firewall.

The numbers cited in the letter are Blumenthal's allegations, not established facts. He claims that Cantor acquired approximately 5% equity in Tether in 2024, with the valuation rising from $600 million when Trump was re-elected to about $10 billion; Cantor also earns tens of millions of dollars annually for custodian services of Tether's assets. He also stated that Howard Lutnick received over $250 million during the same period, including a $192 million distribution from Cantor. Senate documents also record Howard Lutnick denying that Cantor holds Tether investments.

The scope of the request includes income received by Cantor from Tether since January 1, 2023, its custodial role, compliance controls, payment arrangements for the Lutnick family, and all communications related to Tether after Howard Lutnick's departure. Blumenthal also inquired whether Cantor requested Tether to conduct independent audits, whether it evaluated terminating the partnership, and whether there were any Tether loans or other arrangements when transferring equity to children. The deadline for a response is October 23.

This letter follows a report released by the Democratic side of the committee on September 28. The report reviewed 846 wallets designated by the U.S. Treasury's Office of Foreign Assets Control and Israel's National Bureau for Counter Terror Financing, stating that USDT has become a payment channel for Iran-related networks. Blumenthal had previously requested the Treasury Secretary and Attorney General to investigate potential sanctions violations. Tether's verification as of June 30 shows assets of $187.75 billion, liabilities of $183.64 billion, and excess reserves of $4.11 billion.

This is not a market transaction but a minority party investigation letter tying custodians and shareholders into the compliance issues of stablecoins. Funds remain in Cantor's custodied U.S. Treasury reserves, with selling pressure coming from Cantor, which may be required to provide records, while buyers have no new subscriptions or redemptions. The beneficiaries are the investigators who want to write the custodial and sanctions review into legislative materials; the pressured parties are Cantor, which is both a shareholder and custodian, and Tether, which has its U.S. Treasury reserves placed there.