As President Donald Trump's nominee for Secretary of Commerce, Howard Lutnick is facing scrutiny from Senator Elizabeth Warren regarding his firm's relationship with Tether, a leading global stablecoin issuer. As CEO of Cantor Fitzgerald, which serves as Tether's US banker, Lutnick has been accused by Warren of supporting a cryptocurrency operation with alleged ties to illicit activities.
In a letter to Lutnick, Warren stated that his firm's involvement with Tether has enabled the stablecoin's use by criminals and terrorists, and that Cantor Fitzgerald's role as Tether's US Treasuries dealer and custodian of its Treasury reserves makes it partly responsible for the abuse. Warren also alleged that Cantor Fitzgerald has a stake in Tether, although Lutnick testified that his firm holds a convertible bond rather than a direct equity stake. The senator pointed out that Tether's stablecoin has been the subject of over 150 investigations worldwide, including those by the US Department of Justice and Department of the Treasury. In response to Warren's concerns, Lutnick expressed support for increased auditing demands on stablecoin issuers and the deployment of US law-enforcement artificial intelligence tools to combat illicit activity.
He argued that the use of AI tools could eliminate illicit activity on stablecoins within a year or two and emphasized the importance of transparency in detecting and tracking such activity.