FameEX Hot Topics | Tether’s $5B Mint and Political Ties Spark Industry Suspicion

Tether, the largest stablecoin by market capitalization, has once again sparked significant attention with a $5 billion minting spree completed in just 72 hours. This surge in supply not only reinforced its central role in driving market liquidity but also raised suspicions in financial circles. Howard Lutnick, CEO of financial services giant Cantor Fitzgerald and a prominent member of Donald Trump’s transition team, is at the center of these developments.

In recent months, Lutnick has been outspoken in defending Tether’s financial stability. His support has coincided with Trump’s nomination of Lutnick as Secretary of Commerce. This comes amid ongoing investigations by the US Attorney’s Office for the Southern District of New York into Tether’s alleged involvement in illicit activities, including potential ties to terrorism financing. Cantor Fitzgerald’s role as a critical banking partner for Tether has also drawn scrutiny, particularly as other global banks have distanced themselves from the controversial stablecoin issuer.

Blockchain analytics from SpotOnChain reveal a carefully timed series of Tether issuances. On November 6, Tether minted $1 billion, coinciding with Bitcoin’s surge to a record high of $76,200. Subsequent issuances of $2 billion on November 9 and 10 pushed Bitcoin past $80,000, with a final $2 billion mint raising Tether’s market cap to $124 billion. By the time of publication, this figure had climbed to $132 billion, solidifying Tether’s dominance in the stablecoin market and its role in driving crypto liquidity.

Lutnick’s increasing involvement with Tether has drawn significant criticism. While he has publicly endorsed the stability of Tether’s reserves, claiming to have reviewed parts of its balance sheet, he has yet to provide transparent evidence of these holdings. This lack of transparency has amplified concerns about Tether’s practices and its impact on the broader crypto market.

Adding further complexity, Cantor Fitzgerald has acquired a 5% stake in Tether, valued at $600 million, according to a Wall Street Journal report. This stake is seen as potentially aligning Tether with increased political support from the Trump administration, raising questions about the interplay of business and politics in the crypto sector.

Lutnick has also indicated plans to vet candidates for government positions that could oversee Tether’s operations. If confirmed by the Senate as Commerce Secretary, he has stated he would step down as Cantor Fitzgerald’s CEO but may assume another role. His longstanding criticism of Federal Reserve policies contrasts sharply with his silence on Tether’s opaque operations, further fueling the controversy surrounding his involvement.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.