A Senate Democrat has opened a formal inquiry into Cantor Fitzgerald’s multibillion-dollar financial relationship with Tether, demanding the bank turn over records on custody arrangements, revenue and ownership by October 23.
Senator Richard Blumenthal, the ranking Democrat on the Senate Permanent Subcommittee on Investigations, sent the letter on October 8 to Cantor chairman Brandon Lutnick. He wants documents on the firm’s custody services for Tether, how much revenue the relationship generates, any ownership interest the bank holds in the stablecoin issuer, its sanctions monitoring procedures, and communications involving Commerce Secretary Howard Lutnick, who ran Cantor before joining the administration.
At the center of the inquiry is a stake reported at about 5% of Tether, rights Cantor obtained in 2024 while Howard Lutnick was still chairman and chief executive. Blumenthal estimates the stake’s value has climbed from roughly $600 million at acquisition to about $10 billion since President Trump returned to office, a figure drawn from external reporting that neither company has publicly confirmed. A 5% cut of Tether would be a position in an issuer whose USDT token, with a circulating supply above $180 billion, settles an estimated $30 trillion in on-chain volume each year and functions as dollar liquidity for much of the trading world.
What the staff report found
The letter follows a September 28 report by the subcommittee’s Democratic staff on cryptocurrency transactions linked to Iran. Investigators reviewed 846 digital asset wallets sanctioned or otherwise targeted for suspected Iranian ties. The finding that anchors the probe: 84% of those wallets transacted almost entirely in USDT, dwarfing every other token in the sample. The report painted a picture of sanctions evasion that runs through the largest token in crypto rather than through exotic mixers or privacy coins, which explains why a bank custody arrangement rather than a token issuer sits at the center of the letter.
Blumenthal alleges that Tether failed to freeze certain wallets despite public information connecting them to illicit financing. He has separately asked the Treasury and Justice departments to investigate possible sanctions and banking violations. His letter to Cantor seeks details on anti-money laundering procedures, sanctions screening, due diligence on Tether itself, and whether the bank has considered ending the relationship altogether. In effect, he is asking whether Cantor profits from the token’s dominance while treating its enforcement record as somebody else’s problem.
The timing is awkward
The inquiry lands in a week crowded with USDT news. The Treasury is moving to seize roughly $1 billion in Iran-linked crypto, its largest such action of the year. On October 8 the European Securities and Markets Authority told platforms licensed under the EU’s MiCA framework to stop selling stablecoins that lack authorization, with USDT the biggest name affected. Purchases stop now, and balances must be cleared by January 8, 2027. And on October 10 a THORChain engineer reported that Tether temporarily froze USDT vaults on his cross-chain protocol, calling the move a warning about where control over the token actually sits.
Tether has spent two years building a public record of cooperation with US law enforcement. The company has frozen hundreds of millions of dollars in addresses at the request of investigators, including a high-profile action assisting Ukrainian forces after the invasion. Its chief executive, Paolo Ardoino, regularly presents those freezes as proof the token polices itself and works with authorities faster than the traditional banking system ever has. The Senate probe will test whether that record holds up against the scale of USDT trading in high-risk jurisdictions, where the token remains the closest thing to a dollar bank account that much of the world can reach.
What Cantor has at stake
For Cantor, the questions go beyond reputation. The custody arrangement with Tether, whose reserves top $100 billion in US Treasuries and cash-like instruments, makes the bank a significant counterpart to the largest reserve pool in crypto. The letter asks how much revenue Cantor earns from Tether, whether its ownership stake was disclosed to regulators, and what sanctions and anti-money-laundering screening the bank applies to the issuer’s customer-facing operations.
The political stakes compound the financial ones. Howard Lutnick, who built Cantor into a Wall Street power and championed the Tether deal, now serves as Commerce Secretary in an administration that has positioned itself as friendly to the crypto industry. Blumenthal wants to know whether the secretary or his former firm has been involved in any government decisions touching Tether. That reaches past regulatory plumbing into conflict-of-interest questions that tend to attract follow-on investigations once the underlying documents surface.
What happens next
Neither company has responded to the letter publicly. Cantor did not immediately answer requests for comment. Tether’s press operation has historically dismissed congressional inquiries of this kind as political theater, though the company’s cooperation with the Treasury seizure this week complicates that posture.
The subcommittee has not scheduled hearings. If Cantor produces the records by October 23, Blumenthal’s team will likely publish findings before the end of the year, possibly alongside legislation assigning stablecoin issuers’ bank partners explicit obligations. The outcome will land just as the GENIUS Act, the federal framework governing payment stablecoins, takes full effect on January 18, 2027. Congress will then have to decide whether the law’s perimeter covers offshore issuers that dominate US trading, or leaves them parked outside it, and Cantor’s paper trail may supply the strongest arguments either way.