Cryptocurrency markets have soared since Donald Trump's re-election as US president, with Tether (USDT) playing a central role in the rally. On November 18th, Tether issued $13 billion worth of USDT, followed by another $3 billion on November 25th, bringing total circulation to $132.6 billion. USDT is a stablecoin pegged to the US dollar and is the third largest cryptocurrency after Bitcoin and Ethereum.
Despite Tether's prominence, the company remains highly controversial. The company's management has faced investigations, lawsuits, and accusations of inadequate collateral, opaque operations, and links to illegal activities. According to the UNODC report, USDT is involved in money laundering and arms trafficking. Additionally, U.S. regulators are concerned that its widespread use could destabilize the dollar. A bill is being considered that would ban private stablecoins like USDT.
Howard Lutnick, the CEO of Cantor Fitzgerald and the Trump administration's nominee for secretary of commerce, has become a pivotal figure in Tether's business. Mr. Lutnick facilitated a $600 million deal in which Kantar acquired 5% of Tether, and has leveraged his firm's resources to stabilize Tether's collateral by managing investments in government bonds. Tether remains Kantar's largest customer, generating significant revenue for the company.
Mr. Lutnick's ties to Tether have raised concerns about conflicts of interest. He is expected to step down as Kantar's CEO, but remains a senior member of Trump's team and has significant influence. Critics argue that Lutnick's position downplays the allegations against Tether and claims that Tether has sufficient financial reserves to shield it from regulatory scrutiny. are.
The cryptocurrency market benefited from Tether's growth and President Trump's victory, with its market capitalization rising 48% to $3.5 trillion since the election. Trading volume also surged by 140%. But questions remain about the compatibility of Mr. Tether and Mr. Lutnick's dual roles in politics and finance.
Mr. Lutnick has faced criticism from both ends of the political spectrum, much of it focused on unrelated issues such as his Jewish heritage and ties to Israel. Far-right conspiracy theories are even revisiting Cantor Fitzgerald's losses during the 9/11 attacks, further complicating his public profile.
The intersection of the Tether controversy, Lutnick's political influence, and the burgeoning crypto market highlights the complex dynamics of an industry that continues to challenge regulatory and financial norms.
