Cantor Fitzgerald Agrees to Acquire 5% Stake in Tether for Up to $600M: Report

Cantor Fitzgerald, the renowned financial services firm, has reportedly secured a 5% stake in Tether, the issuer of the popular USDT stablecoin, for up to $600 million. This agreement, made within the past year, could position the firm to gain more political leverage as it aligns itself with the incoming Trump administration.

According to a Nov. 24 report from the Wall Street Journal, the 5% stake in Tether was valued at up to $600 million at the time the deal was finalized. The timing of this agreement is significant, given that Cantor Fitzgerald’s CEO, Howard Lutnick, was recently appointed by President-Elect Donald Trump as the Secretary of Commerce on November 19.

Potential Political Influence for Tether

The acquisition could help Tether secure greater political support, especially considering Lutnick’s close ties to the incoming administration. As part of his role in Trump’s transition team, Lutnick is reportedly vetting candidates for key government positions that may influence oversight of Tether. Business associates familiar with the situation quoted Tether’s largest shareholder, Giancarlo Devasini, as saying that Lutnick could leverage his political influence to protect Tether from regulatory threats.

Lutnick, who has expressed confidence in Tether’s financial stability, also works closely with Trump as one of his transition advisors, where he is involved in shaping government personnel decisions. Lutnick is expected to step down from his role as CEO of Cantor Fitzgerald once confirmed by the Senate.

Cantor Fitzgerald’s Relationship with Tether and Regulatory Challenges

Cantor Fitzgerald has long been a crucial banking partner for Tether, particularly at a time when many global financial institutions have distanced themselves from the stablecoin issuer. The firm manages the majority of Tether's $134 billion in reserves, which are largely held in US Treasury bills.

This partnership comes amid ongoing scrutiny from U.S. regulators. The U.S. Attorney's Office for the Southern District of New York has been investigating whether Tether has been used for illicit activities, including terrorism financing. Despite this, Lutnick has consistently defended Tether’s financial integrity, emphasizing the importance of US dollar-backed stablecoins, especially for residents of high-inflation countries like Argentina, Turkey, and Venezuela.

Cantor Fitzgerald’s Expanding Role in Crypto

Cantor Fitzgerald’s involvement in the cryptocurrency space has grown, with Lutnick also announcing the firm’s new Bitcoin lending program at the Bitcoin 2024 conference. The program, which aims to offer leverage to Bitcoin owners, is set to launch with an initial $2 billion in lending. This move underscores Cantor Fitzgerald’s increasing commitment to the crypto industry, which aligns with its broader strategy to expand into digital asset services.

As of now, Cantor Fitzgerald manages assets worth around $3.5 billion, according to Fintel data. The firm's growing presence in both traditional finance and crypto markets, alongside its political connections, could shape the future of Tether and the broader digital asset ecosystem.