Howard Lutnick, the chairman of Cantor Fitzgerald and President Donald Trump's nominee for U.S. Commerce Secretary, faced scrutiny from Senate Democrats regarding Cantor Fitzgerald's investment in Tether, the company behind the largest stablecoin, USDT. Cantor Fitzgerald serves as Tether's primary custodian for U.S. Treasuries, manages its reserves, and holds convertible debt issued by Tether's parent company. Concerns about the reserves backing USDT have persisted in the crypto industry, and Lutnick tried to downplay them by asserting Cantor's confidence in Tether. However, he softened his statements during the hearing, stating that Cantor Fitzgerald does not conduct continuous diligence on Tether's financial statements. Bettors on Polymarket are giving a 10% chance of Tether becoming insolvent in 2025 and a 14% chance of it de-pegging. Lutnick also clarified that Cantor Fitzgerald's convertible debt investment in Tether does not constitute an equity interest. While Tether's critics call for an audit, Lutnick did not demand one but acknowledged that audits should happen for U.S. dollar stablecoin issuers. When questioned about his influence on crypto regulation, Lutnick denied making any improper suggestions regarding Tether and cautioned against undermining the dominance of the U.S. dollar on the blockchain through legislation.



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