Nikolas Sargeant
Senator Elizabeth Warren has challenged Howard Lutnick's nomination for Commerce Secretary, highlighting concerns over his firm Cantor Fitzgerald's relationships with controversial stablecoin issuer Tether.
In a January 27 letter, Warren voiced "serious concern" regarding Lutnick's Tether involvement, characterizing the stablecoin company as a "known facilitator of criminal activity" and "outlaws' favorite cryptocurrency." Despite Lutnick's commitment to divest his Cantor Fitzgerald stake, which holds 5% interest in Tether and manages its assets, Warren maintains that his long-term connections warrant scrutiny.
Lutnick's Regulatory Influence Raises Red Flags
As the Senate Banking Committee's leading Democrat, Warren questioned whether Lutnick could effectively prioritize public interests over financial ties. She warned that his potential confirmation at the January 29 hearing would grant him "extraordinary access" to President Trump and key regulators, potentially influencing cryptocurrency policy decisions. Warren's office issued 13 specific questions, demanding details about Lutnick's Tether investments, Trump administration discussions, and Cantor Fitzgerald's compliance procedures regarding KYC and AML regulations.
Cryptocurrency Oversight Battle Continues
Warren, a persistent crypto industry critic, has maintained pressure for stricter oversight. While she won't participate directly in Lutnick's confirmation hearing, her concerns about Tether's role in illicit activities remain prominent. Recent developments show Tether's cooperation with authorities, including helping Spanish officials freeze $26.4 million in crypto linked to money laundering and assisting the FBI in recovering $6 million from scammers targeting U.S. citizens.
Warren's legislative efforts, including the Digital Asset Anti-Money Laundering Act in both 2022 and 2023, aim to strengthen crypto regulation. However, industry groups and national security experts, including the Chamber of Digital Commerce and former military officials, argue these measures could push innovation overseas while compromising law enforcement's ability to track illegal transactions. Warren has requested Lutnick's response to her concerns by February 10.
