US Senator Elizabeth Warren is raising concerns about Howard Lutnick, Donald Trump’s nominee for Commerce Secretary, over his ties to stablecoin issuer Tether. Warren, a strong critic of cryptocurrency, sent a letter on Jan. 27 questioning Lutnick’s involvement with Tether and its potential impact on his role in the government.
Warren Says That Lutnick Can Influence Crypto Policies
Lutnick is the CEO of Cantor Fitzgerald, an investment firm that holds a 5% stake in Tether and also serves as its asset manager. Although he has agreed to divest from the company, Warren argues that this does not eliminate concerns about his past connections or possible influence over crypto regulations.
She specifically questioned whether Lutnick could prioritize the interests of the American people over his financial ties if confirmed as Commerce Secretary.
Warren warned that, if confirmed, Lutnick would have direct access to President Trump and other officials involved in crypto regulations. She believes this could allow him to shape policies that might benefit Tether or the overall crypto industry.
As part of her inquiry, Warren asked Lutnick to answer 13 questions.
These include details about his current financial stake in Tether, discussions with Trump officials regarding the company, and whether Cantor Fitzgerald ensured that Tether follows US financial regulations like Know Your Customer (KYC) and Anti-Money Laundering (AML) laws.
She has requested answers by Feb. 10. However, Warren is not part of the Senate committee that will oversee Lutnick’s confirmation hearing on Jan. 29.
Warren Argues That Tether Is Used For Illegal Activities
Warren has long been critical of Tether. She argues that it is used for illegal activities such as money laundering and sanctions evasion. She also pointed to concerns that Tether may be used to finance North Korea’s nuclear program.
Despite this criticism, Tether has worked with law enforcement to combat illicit financial activities. On Jan. 27, Tether partnered with blockchain firms Tron and TRM Labs to help Spanish authorities freeze $26.4 million linked to money laundering. In September 2023, Tether helped the FBI recover $6 million from crypto scammers targeting US citizens.
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Warren’s Push for Stricter Crypto Laws
Warren has been a vocal advocate for tougher crypto regulations. She has urged Trump’s Treasury Secretary nominee to consider stricter oversight and has introduced legislation to tighten controls on digital assets.
Her proposed Digital Asset Anti-Money Laundering Act, introduced in both 2022 and 2023, aims to enforce existing financial laws on the crypto industry. However, the bill has faced opposition from US-based crypto advocacy groups and former security officials. They argue it could drive the industry overseas and limit law enforcement’s ability to track illicit activities.
Tether and Cantor Fitzgerald have not yet responded to Warren’s letter.
