Cantor Fitzgerald to tap Tether in $2M Bitcoin lending project, secures 5% stake

Howard Lutnick, US President-elect Donald Trump’s pick for Commerce Secretary, aims to launch a $2 billion project to lend dollars to customers who supply Bitcoin as collateral, according to Bloomberg citing people familiar with the matter on November 24.

Funding for the program will start at $2 billion and “ultimately is expected to reach the tens of billions,” one of the sources told Bloomberg.

Lutnick’s financial services firm, Cantor Fitzgerald, currently provides custody services to Tether. It uses it to hold the billions of dollars of US Treasury bonds that act as reserves for its stablecoin USDT.

Cantor Tether Association

As Lutnick prepares for a position in the US government, he plans to turn his company’s relationship with Tether over to his colleagues. Brandon Lutnick, his son who works at Cantor as a trader, has already interned with Tether in Lugano, Switzerland, Bloomberg noted.

“Tether Investments is looking to use some of the profits generated in the past few years for different opportunities,” a Tether spokesperson told Reuters.

Cantor announced the Bitcoin financing project in June, stating at the time: “We are excited to help unlock the full potential of Bitcoin and continue to bridge the gap between traditional finance and digital assets.”

Additionally, Cantor reached an agreement to invest in Tether with a stake valued at up to $600 million, which equates to roughly a 5% stake, according to a Wall Street Journal report over the weekend.

“I wonder if this is an older stock purchase, dating back to a period of lower interest rates and a smaller Tether market cap,” mused Bitcoin pioneer Adam Back, who he added, “sounds a little cheap, otherwise, given the income you can calculate from Treasury interest rates.”

Cantor Fitzgerald is buying 5% of Tether for $600 million.

Cantor shares in one of the most profitable companies, while Tether gets regulatory protection.

CEO of Cantor @howardlutnickis Trump’s pick for Commerce Secretary.

somewhere, @Bitfinexed she is crying

Bullish for Bitcoin.

— Wayne Vaughan (@WayneVaughan) November 24, 2024

The WSJ has repeatedly targeted Tether with FUD, most recently in October claiming that the company was being investigated for non-compliance with AML laws, an accusation that CEO Paolo Ardoino denied, calling it “ old noise” regurgitated.

Industry watchers have speculated that the targeting of Tether by US financial regulators could end the new pro-crypto administration.

Increased supply of ties

Tether’s USDT supply is up more than 10% since early November to $132.8 billion, giving it a 68.5% market command.

According to Coingecko, the total market cap of stablecoins has risen to an all-time high of $194 billion, representing 5.5% of the entire crypto market.

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