US Senator Elizabeth Warren has pressed US President Donald Trump’s Commerce Secretary pick, Cantor Fitzgerald CEO Howard Lutnick, over his investment firm’s connection with stablecoin issuer Tether.
In a Jan. 27 letter, Warren said she has “serious concern” about Lutnick’s “deep involvement with and support for Tether, a known facilitator of criminal activity that has been described as ‘outlaws’ favorite cryptocurrency.’”
“While you have agreed to divest your interest in Cantor Fitzgerald, which holds a 5% stake in Tether, and serves as Tether’s asset manager, this divestment does not end the questions about your deep personal ties to the company or its affiliates,” wrote Warren, the top Democrat on the Senate Banking Committee.
She said she still questions his “ability to put the interests of the American people” ahead of personal financial interests if he’s confirmed as the Secretary of the Department of Commerce.
According to Warren, if Lutnick is confirmed in his hearing on Jan. 29, he will have “extraordinary access” to President Trump and other officials responsible for regulating Tether.
She claims this will put him in “a position to influence policies that may directly or indirectly impact Tether and the entire cryptocurrency industry.”
Warren asked for Lutnick to answer 13 questions, including his current financial stake in Tether, plus any conversations he has had with Trump administration officials about Tether.
She also asked if Cantor Fitzgerald performed due diligence to confirm that Tether complies with Know Your Customer rules in the Bank Secrecy Act, international sanctions, and Anti-Money Laundering laws.
The Massachusetts senator wants answers to her questions by Feb. 10. However, she is not on the Senate Commerce, Science and Transportation Committee, which will hold Lutnick’s confirmation hearing.
Warren said bad actors use Tether’s namesake stablecoin, Tether (USDT), for criminal activity like money laundering and sanctions evasion, and to finance actions such as North Korea’s nuclear program.
Tether and Cantor Fitzgerald did not immediately respond to Cointelegraph’s request for comment.
Tether has helped authorities shut down illicit activities. On Jan. 27, it collaborated with blockchain firms Tron and TRM Labs to help Spanish law enforcement freeze $26.4 million in crypto linked to a pan-European money laundering operation.
Related: Tether will relocate HQ to El Salvador after securing license
Last September, Tether said it assisted the FBI in recovering $6 million from crypto scammers targeting US citizens by freezing scammers’ wallets.
Warren, a crypto-skeptic, has called for stringent regulations for the crypto industry and recently urged Trump’s Treasury pick to consider stricter crypto laws.
In 2022 and again in 2023, she introduced the Digital Asset Anti-Money Laundering Act to bring the crypto industry to heel under existing AML and CTF frameworks.
The bill was blasted by US-based crypto advocacy group the Chamber of Digital Commerce and 80 former military and national security officials over concerns it could hinder law enforcement and increase national security concerns by driving the digital asset industry overseas.
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