šŸ’””Unmasking the Dollar’s Digital Doppelganger: A Tale of Stablecoins, Scandal, and Secrets”šŸ’”

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In the grand theater of the United States Senate, a battle of wits and wills unfolds between the esteemed Howard Lutnick, President Trump’s pick for U.S. Commerce Secretary, and the inquisitive lawmakers. The subject of their intense scrutiny? Lutnick’s ties to the infamous Tether and its dollar stablecoin, USDT (USDT), a digital doppelganger of the mighty greenback.

As the Senate hearing commenced, Lutnick, the CEO of Cantor Fitzgerald, bravely faced a barrage of questions concerning Tether’s alleged role in illicit finance. The company’s reserves and the potential concealment of $19 billion in nefarious activities have been under the microscope for years.

The year 2023 witnessed Republican lawmakers grilling the Department of Justice about Tether and Binance‘s potential involvement in financing terror. In 2024, The Wall Street Journal reported that U.S. investigators had delved into Tether’s operations, scrutinizing potential sanctions violations and money laundering breaches.

Tether and its chief, Paolo Ardoino, have consistently denied these allegations, maintaining that no investigation is in progress. The company releases quarterly attestations to soothe users, but many experts deem these reports inadequate.

In 2021, Tether agreed to pay $41 million in civil penalties as part of a settlement with the Commodity Futures Trading Commission. The CFTC claimed that Tether had misrepresented its assertion that USDT was fully backed by reserves at all times.

During the hearing, Senator Maria Cantwell, the Commerce Committee’s ranking Democrat, pressed Lutnick on stablecoin audits. He firmly stated that “U.S. dollar stablecoins should be audited” and “completely backed by U.S. Treasuries, 100%.”

Cantwell also alluded to allegations that Chinese, North Korean, and Russian criminal groups have utilized USDT for illicit transactions. Lutnick, however, retorted that fiat currency remains the primary tool for wrongdoers and that innovators should not be held accountable for the misuse of their technology.

“It’s like blaming Apple because criminals use Apple phones,” Lutnick quipped.

President Trump has tapped Lutnick to serve as the next U.S. Commerce Secretary, subject to Senate confirmation. In this role, he would prioritize job creation and collaborate with Trump’s crypto council to mold digital asset policies.

Due to conflicts of interest in this office, Lutnick has pledged to relinquish his Cantor Fitzgerald post, which serves as a Tether custodian. “I will divest, I will sell all of my interests, my business interests, all of my assets, everything,” Lutnick vowed during the hearing.

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2025-01-29 21:56