Cantor Fitzgerald Bets Big on Crypto with Tether Stake

Cantor Fitzgerald has significantly deepened its ties with stablecoin giant Tether, acquiring a 5% stake valued at approximately $600 million, according to a Wall Street Journal report.

The investment comes at a pivotal moment, with Howard Lutnick, Cantor Fitzgerald’s CEO, poised to become the next U.S. Secretary of Commerce under President-elect Donald Trump’s administration. This positioning could potentially reshape the regulatory landscape for digital assets.

According to multiple reports, Cantor Fitzgerald already manages the majority of Tether’s substantial $132 billion reserve, primarily held in U.S. Treasury securities. The firm earns tens of millions in annual fees for this custody service, highlighting the lucrative nature of their partnership.

Beyond the equity stake, Cantor is exploring an ambitious $2 billion Bitcoin-backed lending program. The initiative would allow clients to borrow dollars using Bitcoin as collateral, with Tether potentially playing a supportive role in the financial infrastructure.

The collaboration occurs against a backdrop of increased regulatory scrutiny. Tether has faced investigations into potential misuse for illicit activities, though the company consistently refutes such claims. The incoming Trump administration’s reportedly crypto-friendly stance could provide a more supportive environment for such innovations.

Lutnick’s son Brandon, who previously interned at Tether’s Swiss operations, symbolizes the growing interconnectedness between traditional financial institutions and cryptocurrency platforms.

As Lutnick prepares to transition into a governmental role, he plans to divest his interests in Cantor Fitzgerald to comply with ethics rules. This move suggests a careful navigation of potential conflicts of interest while maintaining the firm’s crypto-forward strategy.