- Tether faces challenges as authorities focus on bad actors who use its USDT stablecoin.
- Secretary of Commerce nominee Howard Lutnick is a big supporter of Tether.
- Tether's deep reserves are throwing off cash and new investments.
Tether opened 2024 under a cloud.
For years, law enforcement agencies have suspected that criminals have increasingly turned to Tether’s stablecoin, USDT, to launder dirty money.
Moreover, questions dogged the company about whether it had the cash to back up more than $137 billion in USDT tokens.
Yet, as 2025 opens, Tether has been buoyed by influential allies and appears richer than ever.
In the first half of 2024, the crypto industry’s largest stablecoin issuer reported it raked in $5 billion in what it called profits stemming from its reserves.
And thanks to a key appointment by President-elect Donald Trump, Tether is poised to have a good friend in the White House — Howard Lutnick, a top fundraiser for the Republican standard-bearer.
Enter Lutnick
Following his election win, Trump nominated Lutnick, a billionaire Wall Street financier, as the Secretary of Commerce.
Lutnick is the CEO of Cantor Fitzgerald, a New York financial services firm that manages billions of dollars worth of US Treasury bonds that back up USDT.
Cantor, which plays a crucial role in sovereign debt trading worldwide, also owns 5% of Tether, according to The Wall Street Journal.
Hailing stablecoins as “fundamental for the US economy,” Lutnick has emerged as a major crypto booster in traditional finance.
If the Senate confirms Lutnick, he will have an important role in supporting US businesses abroad and implementing Trump’s aggressive tariff agenda.
Tether, which now sports a market value of $137 billion, is labouring to assuage authorities that it is acting to curb the use of USDT by bad actors.
In June, the US Treasury Department reported that Mexico-based criminal organisations are increasingly turning to cryptocurrencies like USDT to purchase precursor chemicals for the lethal opioid fentanyl.
Treasury Department officials have weighed sanctions against Tether for these links, according to The Washington Post. Paolo Ardoino, Tether’s CEO, told DL News there is no indication of an investigation by the Treasury.
When the US hit Venezuela’s state-run oil producer with a new round of sanctions in April, the company turned to Tether to conduct its business, according to Reuters.
Ardoino told DL News that Tether strictly avoids activity with sanctioned countries.
The company has said it works with the US Department of Justice and other law enforcement agencies. Since its inception in 2014, it has frozen about 1,800 cryptocurrency wallets linked to illicit activities, the company said.
Meanwhile, Tether has started to resemble an investment fund by raking in returns from its billions of dollars in reserves.
Ardoino told DL News that most of these proceeds are generated from Tether’s US Treasury bonds yield. It also makes money from service fees clients pay when they redeem their USDT in cash.
The stablecoin firm holds more than $84 billion in Treasury bills, according to a report it released in September.
With the backing of the US government, Treasuries are one of the lowest-risk assets on the planet. Yet Tether also holds a slew of higher-risk assets, including a $100 million stake in an Argentinian dairy producer.
‘They’re just trying to find profitable uses for the vast amount of money they have.’
— Noelle Acheson
Ardoino told DL News that Tether receives many investment opportunities, but only a small number of deals are approved.
It also invested $200 million into a company developing technology that lets people control computers with brain signals in April.
Its largest investment of the year, however, was $775 million in Rumble, an online video channel that competes with YouTube and is popular with right-wing users.
“They’re just trying to find profitable uses for the vast amount of money they have,” Noelle Acheson, a crypto analyst, told DL News. “You got a lot of money, and you need to figure out something to do with it.”
Crude oil deal
Beyond unorthodox investments, she said that Tether’s new trade financing division is especially fascinating.
In November, Tether announced that USDT was used to finance a $45 million crude oil transaction between a commodity trader and a major oil company.
It’s a big leap for companies to conduct such large cryptocurrency transactions, but Ardoino expects business to pick up in 2025.
“We anticipate significant progress as the search for dollar alternatives intensifies in certain regions, and the barriers to adoption are removed,” he told DL News.
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at liam@dlnews.com.
