Sen. Blumenthal Demands Cantor Fitzgerald Records on Tether Ties

Sen. Richard Blumenthal, the ranking Democrat on the Senate Permanent Subcommittee on Investigations, sent a letter on Thursday, Oct. 8, to Cantor Fitzgerald chief Brandon Lutnick demanding details of the firm's relationship with Tether, whose US reserves Cantor holds and manages. CoinDesk reported the letter at 5:22 p.m. ET. Blumenthal is asking about Cantor's banking and sanctions safeguards and about the Tether dealings of Howard Lutnick, Brandon's father and the US Commerce Secretary, who handed the firm to his son on joining the administration.

Details

According to TokenPost, the letter requests records from Jan. 1, 2023 onward covering Cantor's revenue from Tether, its custodial role, its compliance controls and any payments or financial arrangements involving the Lutnick family. It also asks about any Tether loan tied to Howard Lutnick's transfer of his Cantor stake to his children. Cantor was asked to respond by Oct. 23. Blumenthal also cites Cantor's roughly 5% stake in Tether. Per ICIJ, citing The Wall Street Journal, Cantor acquired rights to that stake in 2024 through a convertible bond reportedly worth up to $600 million; Tether itself has never confirmed its ownership structure.

In the letter quoted by CoinDesk, Blumenthal wrote: "Just as Tether has made untold millions in interest and investments from the stablecoins used in these illicit activities, so has Cantor Fitzgerald profited from its relationship with Tether." He added: "While Tether claims to operate out of El Salvador, the vast majority of its assets reside in the United States under your custodianship." One request asks Cantor to describe every step it has taken to investigate allegations that USDT was used for money laundering, in Iran's shadow banking network and for Russia sanctions evasion. Neither Cantor nor Tether responded to CoinDesk's requests for comment.

The letter extends a probe the subcommittee's Democrats have run since the summer. On Sept. 28 they released a report titled "Tethered to Terrorism": of 846 sanctioned or seized wallets linked to Iran and its proxies, 84% transacted exclusively or almost exclusively in USDT, IBTimes reported. Blumenthal asked Treasury Secretary Scott Bessent and Attorney General Todd Blanche to open inquiries, per Crypto Briefing. Tether responded that it had helped freeze about $550 million in Iran-linked USDT in 2026. Its second-quarter attestation, as reported by ForkLog, showed $187.75 billion in assets against $183.64 billion in liabilities as of June 30, including $114.96 billion in US Treasury bills.

What it means for the market

For now this is a records request, not an enforcement action: neither Treasury nor the Justice Department has announced an investigation. Blumenthal sits in the minority and cannot issue subpoenas, but CoinDesk notes that if Democrats retake the Senate in November (Kalshi puts the odds at 61%, Polymarket at 64%), the industry's critics would chair committees with the power to compel testimony.

What matters for crypto is that the target is not the issuer itself but its US reserve custodian, the link through which more than $100 billion in US government paper backs USDT, the main settlement coin on exchanges. Pressure on Tether is building on two fronts at once: in the EU, ESMA this week gave platforms three months to remove stablecoins without a MiCA license, a group that includes USDT. Follow the market's reaction in the daily summary.