Cantor Fitzgerald Acquires 5% Stake in Tether for Up to $600M
Cantor Fitzgerald, a global financial services firm, has reportedly acquired a 5% stake in Tether, the world’s largest stablecoin issuer, in a deal valued at up to $600 million. The move is seen as a strategic alignment with President-elect Donald Trump’s administration, as Cantor’s CEO Howard Lutnick was recently appointed as Trump’s Secretary of Commerce.
The deal, first reported by the Wall Street Journal on November 24, 2024, underscores Tether’s growing political influence and its effort to secure stronger backing from major financial institutions.
Key Details of the Deal
The 5% stake in Tether positions Cantor Fitzgerald as one of the stablecoin issuer’s key stakeholders. Given the valuation of Tether’s total business, the deal was valued at as much as $600 million. This acquisition follows Cantor Fitzgerald’s increasing role in U.S. crypto regulation and policy, especially as its CEO, Howard Lutnick, has been named Secretary of Commerce in Trump’s incoming administration.
According to insider reports, Giancarlo Devasini, who is believed to be Tether’s largest shareholder, indicated that Lutnick could leverage his political influence to shield Tether from regulatory threats. As Commerce Secretary, Lutnick would be in a position to influence U.S. policy on stablecoins and cryptocurrency regulation.
Lutnick is already part of Trump’s transition team and is reportedly involved in vetting candidates for other key government positions, some of which could have oversight of the crypto industry, including agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Tether’s Position in the Market
Tether (USDt) is the largest stablecoin in the crypto market, with a total circulating supply of over $134 billion. Stablecoins like Tether are essential for crypto traders and investors, providing a bridge between fiat currencies and digital assets.
Cantor Fitzgerald has played a significant role in supporting Tether’s financial stability at a time when traditional banking partners have distanced themselves from the stablecoin issuer. Unlike many of its banking peers, Cantor has maintained a relationship with Tether, holding the majority of Tether’s U.S. Treasury bill reserves, which back the USDt stablecoin.
Tether’s reserve strategy has been under increased scrutiny from U.S. regulators and law enforcement. Reports suggest that the U.S. Attorney’s Office for the Southern District of New York has been investigating whether Tether has been used by third parties for illicit financial activities, including terrorism financing. Tether has repeatedly denied these allegations, arguing that its financial reserves are transparent and fully backed.
Cantor Fitzgerald’s Growing Role in Crypto
Beyond its role as a custodian for Tether’s U.S. Treasury reserves, Cantor Fitzgerald has made significant moves in the cryptocurrency space. At the Bitcoin 2024 conference, CEO Howard Lutnick announced the launch of a $2 billion Bitcoin lending program aimed at providing leverage for Bitcoin holders.
“We will offer leverage to those who own Bitcoin. We are going to launch with $2 billion of lending,” Lutnick stated at the conference, signaling Cantor’s deepening commitment to digital assets.
With Cantor’s entry into Bitcoin lending and its $600 million stake in Tether, the firm is positioning itself as a critical player in the U.S. crypto industry. As one of Tether’s most important financial backers, Cantor’s involvement could offer greater financial stability to Tether while also giving the company access to influential U.S. political figures.
Political Implications
The timing of the deal is seen as strategically significant. On November 19, 2024, five days before the Tether stake was revealed, Howard Lutnick was named Secretary of Commerce in President-elect Donald Trump’s administration. The appointment places one of Tether’s most influential backers in a critical position to shape U.S. policy on digital currencies, stablecoins, and fintech innovation.
As Secretary of Commerce, Lutnick will have influence over trade, economic development, and technology policy, all of which directly affect the crypto industry. While Lutnick is expected to step down as CEO of Cantor Fitzgerald following his Senate confirmation, his influence as one of Tether’s key backers is likely to persist.
With Lutnick’s appointment and Cantor’s 5% stake, Tether may gain political protection from future regulatory crackdowns, especially as it continues to face scrutiny from the U.S. Department of Justice and other regulatory bodies.
The acquisition of a 5% stake in Tether by Cantor Fitzgerald signals a deepening relationship between one of the world’s most prominent financial institutions and the crypto industry’s largest stablecoin issuer. With Howard Lutnick taking on the role of Secretary of Commerce, Tether stands to benefit from political and regulatory influence as it navigates increased scrutiny from U.S. regulators.
With Cantor Fitzgerald’s financial backing and political connections, Tether could see increased support in its efforts to maintain market dominance and protect itself from legal challenges. As Tether’s role in the global financial system continues to expand, the impact of this deal may be felt across both the crypto industry and the broader financial markets.