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- Senator Warren questions Howard Lutnick’s ties to Tether and demands transparency regarding his firm’s due diligence on crypto compliance.
- Tether’s alleged use in illicit activities raises concerns about Lutnick’s potential conflict of interest if confirmed as Secretary of Commerce.
Howard Lutnick, Donald Trump’s nominee for US Secretary of Commerce, is under fire after Senator Elizabeth Warren sought an explanation for his relationship with Tether Holdings Limited. The company is well-known for issuing the stablecoin Tether (USDT), which has regularly been connected to illegal financial activities, according to Bloomberg.
Renowned for his outspoken advocacy on banking and cryptocurrency regulations, Warren sent an official letter asking about his relationship with Tether. She also asked for records on Tether’s adherence to anti-money laundering (AML) rules and “know your customer” (KYC) policies, including those on the due diligence Lutnick and his company, Cantor Fitzgerald, undertook.
Warren said in her letter, “We cannot allow someone with ties to a financial ecosystem vulnerable to abuse to be given greater authority over the country’s trade policy.”
Anything to Hide?
For instance, Lutnick’s personal financial disclosure records omitted stakes in Tether or other cryptocurrencies. Cantor Fitzgerald indeed holds Tether stock and participates actively in several areas of the business. But under his ethical agreement, Lutnick said he will sell all of his Cantor Fitzgerald interests should he be appointed Secretary of Commerce.
Is that sufficient, though? For Warren, this still marks a big unanswered question.
Tether and Global Issues
Tether clearly has long been the focus of inquiry for authorities all around. Criminal groups ranging from the North Korean government to Mexican drug gangs and Southeast Asian human trafficking networks are thought to be using this stablecoin. As it turns out, some US officials claim Russia funded the war in Ukraine via Tether to get around sanctions.
Warren is naturally curious about knowing more about Lutnick’s ties with Tether, given his record.
Elizabeth Warren: Concerned Over Conflict of Interest
Should confirmation of Secretary of Commerce, Lutnick or his deputy will join the working group assigned to assess digital asset laws. This implies that he could affect the direction of US crypto policy. Imagine what would happen if someone having financial interests in a possibly problematic company assisted in controlling the rules controlling it.
Warren wants this kind of risk never to materialize. She thus gave Lutnick a February 10 deadline for his response. Her confirming hearing is scheduled for January 29, 2025.
Alert Regarding TRUMP and MELANIA Tokens
On the other hand, as we previously reported, Warren has voiced concerns with political tokens like TRUMP and MELANIA. She seems these tokens are not actual financial assets. She regards them more as political tools capable of compromising national security and economic stability.
Given the political sphere’s growing involvement in the crypto industry, Warren seems to be trying to ensure that legal gaps are not taken advantage of for political or personal benefit. Will Warren’s ask have a significant influence? It is still to be seen.
