For Tether, these are intriguing times.

The most popular cryptocurrency in the world has also emerged as the preferred option for transnational criminals and anyone who want to do business outside of the purview of the established international financial system.

As a consequence, Tether is coming under investigation by US and EU law authorities.

Concerns over possible conflicts of interest have been raised by Tether’s substantial investment from Wall Street behemoth Cantor Fitzgerald and its CEO, Howard Lutnick, who was also Donald Trump’s choice for commerce secretary.

KEY POINTS

  • With a $138 billion market valuation, Tether has emerged as the biggest and most significant stablecoin globally, and it is also a preferred option for transnational criminals seeking to conceal illicit activities and launder funds.
  • Wall Street behemoth Cantor Fitzgerald, helmed by CEO Howard Lutnick—Donald Trump’s choice for secretary of commerce—is one of Tether’s investors.
  • U.S. regulators are looking into Tether for potential sanctions and anti-money laundering infractions.
  • Tether’s massive scale has raised worries about systemic risk, and its expanding financial and political clout will provide special difficulties for regulators and law enforcement in the future.
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How Does Tether Operate and What Is It?

Giancarlo Devasini, an Italian former cosmetic surgeon who had previously contributed to the development of the cryptocurrency exchange Bitfinex, and Brock Pierce, an American entrepreneur who had previously co-founded Realcoin and had connections to Steve Bannon, a former White House strategist to Donald Trump, launched Tether in 2014.

Trading cryptocurrencies was transformed by Tether, which provided a reliable digital asset with a value based on the US dollar.

The reserves used to preserve this dollar peg include gold, Bitcoin, U.S. Treasury notes, and other assets.

Tether’s market capitalisation increased from a few billion dollars in 2019 to $138 billion in January 2025, making it the most traded cryptocurrency globally.

Why Tether Is Favourite by Some Criminals

Tether has drawn more regulatory attention despite its obvious, legal use since it may also be used by dishonest people to transfer money covertly.

A UN study from January 2024 claims that USDT has become a “preferred choice” for criminal syndicates, purportedly enabling illicit deals of around $17 billion.

Because of its liquidity, relative anonymity, and simplicity of transferring substantial amounts of money across borders without the usual financial regulation, the stablecoin is attractive to criminals.

USDT has allegedly been used by terrorist groups, sanctioned enterprises, and drug traffickers to circumvent finance constraints.

Crucial
Tether transactions usually occur on exchanges or platforms with less strict Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance, whereas Bitcoin and other cryptocurrency transactions are recorded on public blockchains and can frequently be traced back to users (with sufficient resources and expertise). Illicit transactions become possible as a result.

The Political Consequences of Howard Lutnick’s Tether Stake

Financial and political circles have taken notice of Cantor Fitzgerald’s 5% investment in Tether, which is worth around $600 million.

Lutnick has become a significant ally.

The New York Times. “Trump Taps Wall St. Executive Howard Lutnick for Commerce Secretary.”

Currently, his company earns large fees by managing a large portion of Tether’s alleged billions in Treasury bills.

Given the investigations into the use of Tether by criminal actors, Lutnick’s positions as co-chair of Trump’s transition team and, if approved, secretary of commerce have raised questions about possible conflicts of interest.

The Ethical Risk of Tether’s Development

The majority of Tether’s uses are legal, including enabling trading of cryptocurrencies and tokens, providing liquidity, and acting as a reliable storage of digital money.

Tether’s quick uptake in international markets and incorporation into traditional financial channels are fuelled by this activity.

As a result, several analysts caution that Tether’s further growth may present serious dangers.

According to some academics, Tether has become “too big to fail” in the cryptocurrency space, and its demise may cause a chain reaction that extends beyond digital assets.

Further concerns over responsible financial management, systemic risk, and regulatory supervision are brought up by Tether’s opposition to thorough audits as well as the company’s expanding impact across a number of industries, including investments in artificial intelligence and video platforms.

The Bottom Line

The growth of Tether shows that potential and risks of cryptocurrency innovation.

Although it is now a crucial component of the infrastructure of digital assets, the boundaries between traditional finance, cryptocurrencies, and political power are becoming increasingly hazy due to its expanding scale, regulatory obstacles, and possible political entanglements.

 

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