PANews reported on January 29 that U.S. Democratic Senator Elizabeth Warren is pressuring Trump's nominee for Commerce Secretary Howard Lutnick to explain his and his company Cantor Fitzgerald LP's relationship with Tether, raising questions about possible conflicts of interest ahead of Lutnick's confirmation hearing on Wednesday.

In a letter sent to Lutnick on Tuesday, Warren asked about his relationship with Tether Holdings Ltd., including how much he and Cantor Fitzgerald had invested in the stablecoin issuer.

She also asked Lutnick to detail any due diligence conducted and whether they verified Tether’s compliance with “know your customer” rules under the Bank Secrecy Act, international sanctions and anti-money laundering laws.

Lutnick does not list Tether or any other cryptocurrency investments in his financial disclosure form, but does list at least $806 million worth of assets and more than 800 legal entities he is involved in. Cantor Fitzgerald holds a stake in Tether and plays a role in its operations. Lutnick said in his ethics agreement that he would divest all of his shares in Cantor Fitzgerald and its affiliates if approved by the U.S. Senate.

In her letter, Warren questioned whether those measures would be sufficient to avoid conflicts of interest, noting Lutnick’s status as a prominent backer of Tether and his relationship with Tether’s billionaire chief financial officer, Giancarlo Devasini.

Tether said in a statement that it complies with KYC regulations and voluntarily cooperates with law enforcement to prevent illegal behavior. Tether denies any links to criminals and says it is working with law enforcement to freeze proceeds from illegal activity.

In addition, Warren wants Lutnick, co-chair of the Trump transition team, to describe any discussions he has had with new administration officials about Tether. She also noted that Lutnick maintains a personal relationship with his company (his two sons work at Cantor Fitzgerald Group) and is concerned that Lutnick may continue to exert control after divesting his holdings. (Bloomberg)