Cantor Fitzgerald has invested in stablecoin issuer Tether during the past year, in a deal that would give the broker a 5% stake, which Cantor values at $600 million. That’s according to a Wall Street Journal report, citing sources. Cantor Fitzgerald CEO Howard Lutnick has been nominated to be US Secretary of Commerce and would divest his interest in Cantor to comply with government ethics rules.
For the past two or three years Cantor Fitzgerald has provided custody for the Treasury securities that back the Tether stablecoin, which account for more than 80% of the $132 billion in assets that back the stablecoin. According to the Journal, the company makes tens of millions in fees for providing the service.
Cantor’s role has expanded. It acted as placing agent for a $150 million investment made by Tether into crypto mining firm, Bitdeer. Lutnick’s son Brandon interned at Tether in Lugano in 2023. And Bloomberg discussions with Tether about the company providing funding for a planned Cantor Bitcoin lending program announced in July that will start at $2 billion. Bloomberg said the program had not yet launched and Tether would not be the only financier.
Meanwhile, Tether is using the massive profits it has earned on its stablecoin to launch a separate investment arm which is branching out into other activities. One of them is commodities trade finance, starting with oil shipments. It also recently launched Hadron, an asset tokenization platform that it is making available to third parties that want to tokenized assets.
Meanwhile, Tether is allegedly subject to an investigation by the Treasury and Justice Department for possible violations of anti money laundering and sanctions legislation, although it vehemently denies wrongdoing. In 2021 it entered into settlements with the CFTC and New York State Attorney General relating to misrepresentations about the stablecoin’s reserves.
