Democratic Senators Elizabeth Warren and Ron Wyden have sent letters to both Commerce Secretary Howard Lutnick and Tether CEO Paolo Ardoino, demanding answers regarding a reported loan from Tether to a trust benefiting Lutnick's children. The loan allegedly occurred around the time Lutnick transferred his ownership stake in Cantor Fitzgerald to trusts for his children to comply with federal ethics rules after becoming Commerce Secretary.
The senators expressed grave concerns about potential conflicts of interest, stating, "If reports of this loan are accurate, it would raise serious questions about the relationship between Secretary Lutnick and Tether, and the influence of Tether on Mr. Lutnick’s policy decisions." The loan, first reported by Bloomberg News, was of an undisclosed amount and was made to a trust where Lutnick's four adult children are beneficiaries.
Lutnick, the former CEO of Cantor Fitzgerald, sold his stake in the firm to his sons Brandon Lutnick (now Chairman & CEO) and Kyle Lutnick (Executive Vice Chairman) as part of his divestiture requirements. However, ethics experts cited by Bloomberg noted that adding his children to the trusts could undermine the conflict-of-interest safeguards.
Warren and Wyden further highlighted that Tether lobbied for the GENIUS Act, a stablecoin regulatory law signed by President Trump last year. Lutnick, a member of the President’s Working Group on Digital Assets, was present at the signing ceremony. "The coziness of his relationship with Tether prior to his nomination, and the favorable treatment Tether received in the GENIUS Act, make reports of a loan from Tether to his children’s trust even more troubling," the senators wrote.
The senators also criticized Tether's regulatory history, referencing a 2021 settlement with the Commodity Futures Trading Commission over false claims about its dollar backing, and a 2024 report that the Department of Justice considered sanctioning Tether due to its use by terrorist groups. Warren and Wyden stated, "Tether is seen as a ‘dream currency’ for money launderers… The Department of Justice was reportedly investigating Tether as recently as 2024 for potential violations of sanctions and anti-money laundering rules."
Representatives for the Commerce Department and Tether did not immediately respond to requests for comment. The letters come as the Senate Banking Committee considers broader crypto market structure legislation, with particular concern over conflicts of interest.
