Cantor Fitzgerald Agrees to $600 Million Deal for 5% Stake in Tether

YEREVAN (CoinChapter.com) — Cantor Fitzgerald acquired a 5% stake in Tether, valued at up to $600 million. The Wall Street Journal (WSJ) reported this on Nov. 24. The transaction was finalized within the past year. It strengthens Cantor Fitzgerald’s connection to the stablecoin issuer. This deal comes during a time of heightened political and regulatory scrutiny.

Howard Lutnick, Cantor Fitzgerald’s CEO, became Secretary of Commerce under President-Elect Donald Trump on Nov. 19. This coincided with Fitzgerald’s acquisition of a 5% stake in Tether. As a result, discussions also began about Tether potentially gaining political support through Lutnick’s new role.

Political Links Amid Federal Investigation into Tether

Moreover, the U.S. Attorney’s Office for the Southern District of New York has been investigating allegations that Tether is being used by third parties for illicit activities, including terrorism financing. This scrutiny places the deal in a complex regulatory context.

The WSJ report quoted Giancarlo Devasini, a suspected major shareholder of Tether, as saying Lutnick might leverage his political connections to address the challenges Tether faces.

“Lutnick will use his political clout to try to defuse threats facing Tether,”

Devasini reportedly stated.

Lutnick is actively involved in Trump’s transition team, assisting in the selection of candidates for key government positions, including those overseeing regulatory agencies that might affect Tether’s operations.

Cantor Fitzgerald’s Role in Supporting Tether

As a key banking partner for Tether, Cantor Fitzgerald also manages a significant portion of the stablecoin issuer’s reserves, totaling $134 billion, primarily in U.S. Treasury bills. With Tether facing banking challenges globally, Cantor Fitzgerald’s support is critical to its financial stability.

In addition to its role in Tether’s ecosystem, Cantor Fitzgerald has expanded its cryptocurrency services. At the Bitcoin 2024 Conference in July, Lutnick announced the launch of a $2 billion Bitcoin lending program. He said,

“We will offer leverage to those who own Bitcoin. We are going to launch with $2 billion of lending.”

This development underscores the firm’s active involvement in the cryptocurrency sector alongside its financial support for Tether.

Leadership Changes at Cantor Fitzgerald

Notably, following his appointment as Secretary of Commerce, Howard Lutnick has confirmed that he will step down as Cantor Fitzgerald’s CEO upon Senate confirmation. Under Lutnick’s leadership, the firm has grown to manage approximately $3.5 billion in assets, as reported by Fintel.