Citing the ties of his company to Tether, a hotly contested stablecoin issuer, Senator Elizabeth Warren has focused further attention on Howard Lutnick, nominee for Commerce Secretary.
Warren expressed great concern in a letter dated January 27 concerning Lutnick’s financial involvement in Tether via Cantor Fitzgerald, his investment company with a 5% holding in the business and asset management under control. She contended that should Lutnick take on the position of Commerce Secretary, these linkages begged grave concerns regarding possible conflicts of interest.
Emphasizing the importance of openness in his financial activities, Warren wrote, “While you have agreed to divest your interest in Cantor Fitzgerald, this does not erase concerns about your longstanding connections to Tether and its affiliates.”
Should confirmation be affirmed, Lutnick would have a major impact on rules affecting Tether and the larger bitcoin sector. Warren worries that his past participation would influence laws to support the stablecoin issuer, therefore compromising regulatory control.
The senator has asked Lutnick to respond to 13 important questions, including specifics on his present Tether financial involvement and conversations he could have had with members of the Trump administration about the company. She also asked whether Cantor Fitzgerald made sure Tether followed anti-money laundering rules, Know Your Customer (KYC) policies, international sanctions, and financial laws.
Warren is not a member of the Senate Commerce Committee, which reviews Lutnick’s confirmation, but her letter lends weight to the continuous discussion about Tether’s regulatory posture and claimed involvement in illegal financial activity.
Tether and Cantor Fitzgerald have not yet answered questions posed by Warren. Tether has, in the meantime, tried to work with law enforcement, lately helping authorities freeze millions of assets connected to illegal activity. Warren is still dubious, though, and advocates more laws on cryptocurrency to stop abuse.
The biggest concern still is if Lutnick can reassure legislators that his prior commercial activities won’t compromise his capacity to represent the interests of the American people as the confirmation hearing gets ready.
