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Financial services giant Cantor Fitzgerald has reportedly acquired a 5% stake in stablecoin issuer Tether, a move valued at up to $600 million when the agreement was made, according to a Nov. 24 report from The Wall Street Journal.

The deal, reportedly finalized over the past year, could strengthen Tether's position amid regulatory scrutiny, particularly with the incoming Trump administration.

The acquisition gains added significance as Cantor Fitzgerald's CEO, Howard Lutnick, was recently named U.S. Secretary of Commerce by President-Elect Donald Trump. Lutnick’s political influence and close ties to Trump could potentially defuse regulatory threats facing Tether, the WSJ reported, citing business associates familiar with the matter.

According to the report, Giancarlo Devasini, believed to be Tether's largest shareholder, allegedly indicated that Lutnick would leverage his political standing to shield Tether from challenges. Lutnick is already actively involved in Trump’s transition team, advising on key government appointments, including roles that might oversee Tether.

Cantor Fitzgerald has played a critical role as one of Tether's most significant banking partners during a period when the stablecoin issuer has faced severed relationships with banks worldwide.

The firm currently holds the majority of Tether's $134 billion reserves, primarily invested in U.S. Treasury bills. Lutnick has publicly voiced confidence in Tether’s financial stability and its importance as a U.S. dollar-backed stablecoin for economies grappling with high inflation, such as Argentina, Turkey, and Venezuela.

The acquisition also coincides with heightened regulatory attention on Tether. The U.S. Attorney’s Office for the Southern District of New York has reportedly been investigating whether Tether has been used by third parties to facilitate illicit activities, including terrorism financing.

Lutnick has announced plans to step down as Cantor Fitzgerald's CEO upon his confirmation by the Senate for the Commerce Secretary role. Despite his impending government position, Lutnick has continued to champion blockchain and cryptocurrency initiatives. At the Bitcoin 2024 conference in July, he announced Cantor Fitzgerald’s $2 billion Bitcoin lending program, underscoring the firm’s commitment to advancing crypto services.

With approximately $3.5 billion in assets under management, Cantor Fitzgerald’s move to secure a 5% stake in Tether highlights the growing intersection of crypto and traditional finance. The deal could also signal Tether's strategic intent to solidify political backing as regulatory scrutiny intensifies.

This development positions Cantor Fitzgerald as a key player not only in Tether's growth but also in shaping the regulatory narrative around stablecoins in the U.S. The collaboration between one of the largest stablecoin issuers and a financial powerhouse with direct political connections is likely to have far-reaching implications for the broader crypto industry.

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