US Commerce Secretary took out a Tether loan during a family wealth transfer, fuelling conflict-of-interest concerns

It has emerged that Tether provided a loan to the children of US Commerce Secretary Howard Lutnick during a transfer of his assets, prompting conflict-of-interest concerns.

According to Bloomberg on the 18th (local time), Lutnick in October last year sold his stake in Cantor Fitzgerald into a trust for his four children. The move was intended to comply with ethics rules designed to prevent conflicts of interest for public officials.

However, it was confirmed that around the same time one of the children’s trusts, “Dynasty Trust A,” borrowed funds from stablecoin issuer Tether. The size of the loan was not disclosed.

Cantor Fitzgerald said the transaction was conducted through various funding sources on market terms, but did not confirm whether the loan was used to finance the asset purchase.

Bloomberg reported that the loan was secured by all assets held in the trust, including Tether convertible notes held by Cantor Fitzgerald.

Ethics experts said that even if the transaction formally complied with the rules, it could in substance create a new conflict of interest. Kathleen Clark, a professor at Washington University School of Law, said, “This transaction looks like it is meant to resolve a conflict of interest, but in reality it creates a new problem,” adding that it is “a structure under which the Lutnick family takes on another debt to Tether.”

The company, however, pushed back, saying the criticism “does not add any additional impact to the already established economic interests.”

Tether has maintained close ties with Cantor Fitzgerald. Cantor earns fees by managing Tether’s reserve assets, and in 2024 it was reported to have acquired about a 5% stake through an investment of roughly $600 million.