By Angus Berwick

Senator Elizabeth Warren demanded incoming Commerce Secretary Howard Lutnick disclose more on his ties to crypto firm Tether ahead of his Wednesday confirmation hearing.

In a letter to Lutnick, Warren (D., Mass.) said that his deep involvement with Tether raises questions about his judgement and potential conflicts of interest once in office. Tether's cryptocurrency has spread deep in the financial underworld.

Lutnick is set to resign from his position as chief executive of Wall Street firm Cantor Fitzgerald, which holds most of the assets that back Tether's dollar-pegged stablecoin. He is Cantor's majority owner, and has said he will divest himself of interests in his companies.

Warren cited a December article by The Wall Street Journal that reported that Cantor had agreed to take a 5% ownership interest in Tether, which Cantor valued at as much as $600 million. Lutnick personally negotiated the investment and has a close relationship with Tether's owner, the Journal reported.

She asked Lutnick to describe the nature of the ownership interest, and for details of Cantor's due diligence on Tether before accepting it as a client. The Justice and Treasury Departments have been investigating Tether for possibly violating financial-crime laws.

"If you are confirmed as Commerce Secretary, you will have extraordinary access to President Trump and other high-level officials responsible for regulating Tether, putting you in a position to influence policies that may directly or indirectly impact Tether," Warren wrote.

Lutnick has praised Tether publicly, but hasn't commented on the ownership interest. Tether says its relationship with Cantor is entirely professional.

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(END) Dow Jones Newswires

January 29, 2025 08:54 ET (13:54 GMT)

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