- Cantor Fitzgerald and Tether are developing a $2 billion Bitcoin-backed lending program, allowing clients to borrow USD using BTC as collateral.
- Howard Lutnick, nominated as Commerce Secretary under Trump, plans to divest from Cantor Fitzgerald and transfer Tether relationships to colleagues.
- Cantor manages most of Tether’s $132 billion in assets and owns a 5% stake valued at $600 million.
- Brandon Lutnick, Howard’s son and former Tether intern, may take over the relationship management.
- The program faces regulatory scrutiny amid broader concerns about stablecoin oversight and Tether’s offshore operations.
Bitcoin Lending Program Takes Shape
Cantor Fitzgerald, a major U.S. financial services firm, is in discussions with Tether to launch a $2 billion Bitcoin-backed lending program, according to a Bloomberg report.
The program would enable clients to use Bitcoin as collateral for USD loans, with potential for expansion based on cryptocurrency adoption rates.
Multiple financial contributors are expected to join alongside Tether, with Cantor already recruiting staff for the initiative.
Leadership Changes and Political Implications
The announcement comes as Cantor’s CEO Howard Lutnick prepares for a significant career shift following his nomination as Commerce Secretary under President-elect Donald Trump.
Lutnick plans to US/lutnicks-China-ties-draw-fire-after-trump-taps-him-lead-us-trade-tariffs-2024-11-21/”>divest his interests in Cantor, BGC, and Newmark to comply with government ethics requirements.
Brandon Lutnick, Howard’s son, emerges as a potential successor for managing Tether relationships, having previously interned at Tether’s Swiss operations.
Tether’s Strategic Partnership
Cantor currently manages the majority of Tether’s $132 billion assets through its custody business.
The firm holds a 5% stake in Tether valued at $600 million, as reported by the Wall Street Journal.
At the Bitcoin Conference in Nashville, Lutnick recalled his first meeting with Tether CFO Giancarlo Devasini, stating: "I basically told him the movie line. I said, ‘Show me the money’ […] And we found every penny, and they had every penny."
Regulatory Challenges
A recent U.N. report identified Tether’s USDT as frequently used in money laundering operations.
The U.S. Treasury Department has requested additional authority from Congress to block stablecoin transactions linked to illegal activities.
Bipartisan senators introduced legislation in April to regulate stablecoins, potentially affecting Tether’s offshore operations.
Tether’s corporate structure, spanning multiple jurisdictions including Hong Kong and the British Virgin Islands, has attracted increased regulatory attention.
The company faced a $18.5 million settlement with the New York Attorney General’s office in 2021 over reserve misrepresentation claims.
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