Senator Richard Blumenthal has opened an inquiry into Cantor Fitzgerald’s business with Tether, demanding records on the bank’s custody of the stablecoin issuer’s reserves, its 5% stake in the company and the earnings of Commerce Secretary Howard Lutnick’s family from the arrangement. The letter, sent Thursday to Cantor chairman Brandon Lutnick by the ranking Democrat on the Senate Permanent Subcommittee on Investigations, sets a response deadline of October 23.
The inquiry follows a report published September 28 by Democratic investigators on the same subcommittee, which alleged that Tether’s USDT has become a key settlement tool for Iran’s shadow banking network. Staff examined 846 wallets sanctioned or targeted for seizure over links to Iran and regional proxies. According to the release, 84% of them had transacted exclusively or almost exclusively in USDT. Blumenthal referred those findings to the Treasury and Justice departments for potential investigation of sanctions violations.
What Blumenthal is asking for
The letter requests details on several fronts. It asks how Cantor monitors Tether’s compliance with banking and sanctions law, whether the bank requires independent audits of the issuer, and whether it has ever considered terminating the partnership. It also seeks all communications involving Howard Lutnick about Tether, including messages sent after he left the firm. On the money side, Blumenthal wants the annual revenue Cantor earns from Tether, the value and terms of the ownership stake, and the reserve custody arrangements themselves.
Blumenthal cites estimates that Cantor’s rights to a 5% stake in Tether, acquired in 2024, have risen in value from about $600 million to roughly $10 billion since Trump returned to the White House. The letter alleges Howard Lutnick received more than $250 million in that period, including a $192 million distribution from Cantor Fitzgerald.
“Disturbingly, Cantor Fitzgerald’s lucrative business arrangements with Tether come at the expense of America’s national security,” Blumenthal wrote. “Just as Tether has made untold millions in interest and investments from the stablecoins used in these illicit activities, so has Cantor Fitzgerald profited from its relationship with Tether.”
The history behind the inquiry
Cantor’s relationship with Tether dates to 2021, when the bank began acting as custodian for a portion of the US Treasury bills backing the stablecoin’s reserves. The firm reportedly custodies tens of billions of dollars of Tether’s holdings. Howard Lutnick oversaw Cantor as chairman and chief executive during that period and helped negotiate the April 2024 investment that gave the bank rights to the 5% stake.
He stepped down after Senate confirmation as commerce secretary in February 2025. His son Brandon took over as chairman and another son became vice chairman. The letter also asks for the terms of the elder Lutnick’s divestiture and whether Tether provided any loan or financing to the family to facilitate the ownership transfer to his children.
“Just as Tether has made untold millions in interest and investments from the stablecoins used in these illicit activities, so has Cantor Fitzgerald profited from its relationship with Tether,” Blumenthal wrote in the letter.
Tether’s defense
Tether pushed back hard on the underlying report. In a statement issued alongside the September subcommittee release, the company said cooperation with US law enforcement had resulted in roughly $550 million in Iran-linked USDT being frozen during 2026. It cited an April action covering more than $344 million across two addresses and a July freeze of more than $130 million in four wallets. The company says it has worked with hundreds of law enforcement agencies over the years.
Tether also pointed to its financial transparency record. It announced a Big Four audit engagement in March and later reported completion of its first full financial statement audit covering 2025. The company argues that the subcommittee’s sample was deliberately selected for links to suspected illicit networks and therefore cannot be read as a measure of the share of total USDT activity that is illicit.
What the inquiry can and cannot settle
The letter is an inquiry, not a finding that either company broke the law. It does separate two functions that are often blurred in the public debate. Cantor holds the reserve assets, meaning it can see the securities and cash entrusted to it. Tether, as the token issuer, holds the freeze controls on public blockchains and can block specified USDT addresses. Seeing one does not automatically give the other firm a full picture of on-chain flows. A claim that an address should have been frozen earlier needs a timeline of the designation, the notice given, the evidence available and the issuer’s own action.
Still, the political pressure is building at a sensitive moment for Tether. Treasury Secretary Scott Bessent said Thursday that the United States will “probably” seize $1 billion in crypto tied to Iran this week, telling a Newsmax summit in Washington that “we know where it is and we are isolating them.” The seizure plan is part of what Bessent called an “absolute isolation campaign” against Iran, covering Strait of Hormuz blockades, restrictions on international flights and closing land routes with neighboring countries.
The US has sanctioned seven Iranian crypto exchanges since June. The latest action, in September, targeted BitBank over allegations that it moved hundreds of millions of dollars in bitcoin to the Islamic Revolutionary Guard Corps between June and July. That followed sanctions against Nobitex, Wallex, Bitpin and Ramzinex in June, and Shelbit and Aban Tether in August. Tether said it has frozen nearly $550 million in Iran-linked USDT this year as part of that effort.
Cantor has not yet publicly responded to the letter. The response deadline falls days before the November 3 midterm elections, and control of the Senate Permanent Subcommittee on Investigations could shift depending on the result. A deeper probe, a referral to Treasury and Justice, or a quiet resolution are all on the table. What is clear is that the world’s largest stablecoin issuer and its biggest banking partner now face their most direct congressional scrutiny to date.