Inside the Revolving Door Exposed: Who Is Designing U.S. Stablecoin Regulation for Tether?

Original authors: Anthony Cormier, David Kocieniewski, Annie Massa, Bloomberg

Original translation: Saoirse, Foresight News

The event is viewed as a landmark moment for the crypto industry—and the first legislative-level win in Trump’s push to make the U.S. a “global crypto hub.”

A year earlier, in the same month, Trump signed the GENIUS Act into law in the East Room of the White House, witnessed by a group of members of Congress and industry executives. He said the bill marked a key step toward integrating digital assets into the U.S.’s mainstream financial system.

For the first time, the bill set federal regulatory rules for stablecoins, aiming to reshape market confidence—an industry with a market size as large as $300 billion. The bill requires issuers to disclose accounts and guard against financial fraud. It also plans to bring stablecoin issuing companies under U.S. regulatory jurisdiction, regardless of whether the companies are incorporated in the U.S., in order to address a long-standing industry pain point: criminals, terrorist organizations, and entities evading sanctions have continued to use stablecoin funds to move money.

However, extensive interview records and court documents reveal the behind-the-scenes negotiation: in the months before and around Trump’s inauguration, his adviser Howard Lutnick and Bo Hines worked behind the scenes to weaken regulatory constraint provisions. The final version of the bill tilted toward Tether, the world’s leading stablecoin issuer. Multiple insiders involved in consultations said that among Trump’s circle of advisors, Lutnick and Hines had decisive influence on the legislative direction, and the bill ultimately included multiple provisions favorable to Tether. Dozens of industry executives, lobbyists, and current and former U.S. public officials who provided leads for this report all requested anonymity because they had no authority to disclose negotiation details externally.

On July 18, 2025, Trump signed the GENIUS Act in the White House. He called the bill a “major advance that cements America’s global leadership in finance and crypto technology.” Photo: Al Drago/Bloomberg

Before taking office as U.S. Secretary of Commerce under the Trump administration, Howard Lutnick was chairman and CEO of the Wall Street investment bank Cantor Fitzgerald, which was tasked with managing Tether’s reserve assets. Congressional lobbying records, federal court filings, and a source familiar with the matter confirm that throughout 2024, Lutnick served as Tether’s crisis communications lead—quelling negative coverage and lobbying lawmakers to resist bills that Tether did not endorse.

After Trump took office, Bo Hines was responsible for driving the final phase of the legislative fight. The 29-year-old White House aide is a North Carolina native entrepreneur and crypto investor. He ran as a Republican in the 2022 and 2024 congressional elections but lost both times. He described himself as the “hard-nosed enforcer” pushing the bill forward inside the White House. Three insiders said that as the negotiations neared completion, Hines made public-facing statements that the terms Tether was fighting to lock in were the White House’s “red lines”—non-negotiable.

This report lays out the full legislative timeline and exposes operations that had never previously been made public: first Howard Lutnick, and then—through Bo Hines’s multi-front coordination—helped deliver favorable rules to Tether, which holds about 60% of the global stablecoin market. The reporting also clearly shows how policy-making in this administration is deeply interwoven with the personal economic interests of officials. Both Hines and Lutnick received substantial returns from Tether.

From 2024 until shortly after the GENIUS Act was finalized and rolled out—over a period of 18 months—Tether executives completed a series of commercial arrangements:

• In April 2024, Tether granted subscription rights to sell equity worth several billion dollars in financial institutions owned by Howard Lutnick, with the transaction consideration at only $600 million. Tether’s chairman told partners directly that the deal price was “ridiculously low.”
• In December 2024, Tether invested $775 million in Rumble Inc, which was continuously operating at a loss. The streaming company reached a partnership with the company that operates the Trump Truth Social platform, and multiple people from the Trump camp were among the investors.
• In August 2025, Bo Hines was hired as an executive, just one month after the bill signing.
• In October 2025, Tether provided a loan to a trust. The trust’s beneficiaries were Howard Lutnick’s children, who at the time were acquiring his father’s business assets worth several billion dollars.

Under the federal ethics agreement that cabinet officials are required to sign, Howard Lutnick had promised to divest his Cantor Fitzgerald holdings and to proactively recuse himself from all matters with conflicts of interest. A spokesperson for the U.S. Department of Commerce did not respond to the details in this article, but stated publicly: Lutnick complied with the ethics commitments, divested all assets including those related to Tether, and “did not participate in any work related to stablecoin provisions in the GENIUS Act.”

Bo Hines did not respond to interview requests, and the White House also declined to comment.

Tether issued an official statement firmly denying that it engaged in improper lobbying with policymakers regarding stablecoin legislation. The company said it has long communicated in a lawful and transparent manner with regulatory agencies, members of Congress, and law-enforcement bodies, and that many market participants conduct similar exchanges. Tether also emphasized that the GENIUS Act does not provide any special favors for Tether; the entire new rule set will apply uniformly to all stablecoin issuers seeking to operate within the framework.

The bill sparked intensive lobbying across the entire financial sector—crypto exchanges, credit card institutions, and community banks all joined the contest. But Tether is undoubtedly the absolute leader in the industry. Its largest competitor is only about half its size, so during the GENIUS Act negotiation phase in 2025, Tether had the highest stakes.

Since the bill took effect, Tether registered in El Salvador has continued to expand. The company launched new compliant tokens for the U.S. market, but its core product remains the stablecoin with the widest global circulation. Multiple industry research firms and government documents show that USDT has long been used by terrorist groups, North Korean hackers, and sanctioned entities in Iran and Russia. Under the GENIUS Act provisions, this USDT core token may be permanently outside direct jurisdiction of U.S. regulators.

The final version of the GENIUS Act contains multiple provisions that favor Tether, with significant differences from the earlier stablecoin regulatory proposals drafted by members of Congress. Stablecoins combine convenience with pseudonymity: blockchain wallet addresses are permanently public, but users’ real identities cannot be directly traced.

Trump’s core crypto legislative aide who was put in charge

As early as 2023 to 2024, legislators from both parties drafted a bill setting hard requirements: if offshore stablecoin firms (such as Tether) wanted to operate in the U.S., they would have to accept U.S. regulatory scrutiny and implement a full set of anti-money-laundering rules.

The GENIUS Act significantly loosened that constraint. A clause criticized as a “regulatory parity loophole” states: as long as the U.S. Treasury Secretary determines that El Salvador’s regulatory standards are roughly equivalent to those of the U.S., Tether’s USDT can be overseen by El Salvador’s regulators, and Tether is planning to move its headquarters to the country. The implementation details for this “equivalence” determination are still being drafted.

Another change reduces the liability boundaries for stablecoin issuers, which insiders call a “DeFi loophole”: issuers do not need to track misuse of tokens in secondary markets in decentralized finance. Users can bypass banks and exchanges and trade peer-to-peer directly on-chain without verifying identity or disclosing the purpose of funds.

The bill also provides a three-year compliance grace period: once stablecoin issuers enter the U.S. market, they are not required to fully meet all compliance requirements for three years. During legislative negotiations, some Democratic lawmakers proposed shortening the grace period to 18 months; insiders said Tether insisted on keeping the three-year timeline, and it was at a critical moment that Bo Hines stepped in to fight hard for it.

During the negotiation process, Bo Hines told all parties that Tether matters greatly to the White House and that Republicans should stand firm. Three insiders said Hines explicitly argued that preserving the three-year transition period is a red line that cannot be compromised.

Bo Hines, appointed by Trump to serve as executive director of the President’s Council of Digital Asset Advisors, spearheaded efforts to push the GENIUS Act through Congress. Photo: Tierney L. Cross/Bloomberg

Many financial experts warned that the above provisions would weaken the U.S.’s ability to combat money laundering by criminals and sanctioned entities, while also obstructing the goal of making Trump a global leader in digital currency.

Timothy Massad, a former deputy assistant secretary at the Treasury Department under the Obama administration, raised concerns: regulatory loopholes would create unfair competition. U.S.-based crypto firms would face high compliance costs, while offshore issuers could evade stringent anti-money-laundering rules, and it could even harm the dollar’s position as a global reserve currency. Massad also served as chairman of the U.S. Commodity Futures Trading Commission from 2014–2017.

“If we want the dollar to continue maintaining its position as a core global reserve currency, we cannot allow anonymous transfers of dollar funds by terrorists, sanctioned individuals, and criminals.” Timothy Massad said.

Any currency faces the risk of being used illegally. However, since USDT was launched in 2014, Tether has continued to face skepticism, with outsiders arguing it has not conducted sufficient user due diligence. In its early years, Tether argued that having the company set up overseas can shield it from what it calls “overregulation” by the U.S. But its stance later changed: in December 2023, Tether issued rules to proactively freeze wallet addresses related to individuals and entities listed on the U.S. Treasury’s sanctions list.

Investigators have continued to gather evidence showing USDT being used for activities such as Mexican fentanyl smuggling and assisting Russia in evading sanctions. A January 2024 UN report said that USDT is the preferred tool of Southeast Asian crypto money-laundering gangs. Two insiders said that in 2024, the Biden administration’s National Security Council even discussed a comprehensive ban on Tether tokens entering the U.S. market.

Ultimately, that proposal was shelved for enforcement reasons: the illegal funds related to USDT could still be traced via on-chain transactions. In the long run, federal law-enforcement authorities also recognized that Tether’s willingness to cooperate in freezing assets involved in cases had improved.

A Tether spokesperson responded to interviews: “The company has built a globally leading law-enforcement cooperation mechanism.” The company said it is committed to combating financial crimes, and the GENIUS Act will further strengthen relevant work.

Even so, throughout the negotiation process and after the bill’s rollout, USDT continues to be frequently selected by illegal groups.

Data from the blockchain analytics firm Elliptic shows: in 2025, a sanctioned Iranian central bank purchased USDT worth $507 million. That same year in July—also the month Trump signed the bill—Elliptic detected about $2.5 billion of USDT flowing into the wallets of multiple Russia-linked companies; the U.S. Treasury determined that these companies built cross-border channels to help others evade sanctions.

Even just this year, Elliptic data also shows that USDT worth more than $4 billion has been circulating in the black market run by Chinese fraud gangs, used for crimes such as pig-butchering scams, fake scams, and online sexual extortion.

Court case materials show that starting in July 2025, U.S. federal prosecutors across the country initiated dozens of lawsuits seeking to seize USDT involved in the cases, with the total amount at least $172 million.

Tether’s total circulating supply is more than twice that of its top competitor, Circle Internet Group Inc, but the number of employees is less than half. A large portion of suspicious transaction analysis work is outsourced to third-party institutions. Tether refuses to disclose the size of its compliance team, but says publicly: “We maintain routine cooperation with 67 judicial jurisdictions worldwide and more than 340 law-enforcement institutions, identifying, freezing, and assisting in recovering assets related to illegal activities.”

A company spokesperson said: “This is not just a paper-level compliance commitment, but real cooperation that is actionable and measurable. Most traditional financial institutions cannot reach an equivalent level.”

Howard Lutnick’s lobbying layout

Cantor Fitzgerald has managed Tether reserve assets since 2021, when this investment-banking executive had already known Trump for decades. At that time, Trump had just ended his first presidential term and was preparing to return to the White House. Tether’s profitability was strong, but its market reputation remained controversial. In 2024, Howard Lutnick worked on both Trump’s campaign and Tether in multiple directions.

To earn investor trust that tokens are backed by adequate reserves, independent auditing is crucial, but Tether has never released a complete independent reserve audit report. In 2021, Tether and its related exchange(s) paid $61 million to settle federal regulators and New York State accusations. Regulators alleged that Tether made false statements about the size of its reserves and misled investors; under the settlement agreement, Tether did not admit wrongdoing. Under the provisions of the GENIUS Act, stablecoin issuers must produce an audit report each year. This year, Tether announced it had hired an audit firm, but it has not disclosed a timeline for when the complete audit report will be released.

Howard Lutnick (then chairman and CEO of Cantor Fitzgerald) attends the World Economic Forum in Davos, Switzerland, in January 2024. Photo source: Bloomberg

As the market continued to question the authenticity of Tether’s reserves, Howard Lutnick stepped forward publicly to support it. In January 2024, he went to Davos and, during a Bloomberg TV live broadcast, said: “They have the cash reserves they claim to have.”

The next month, Howard Lutnick visited El Salvador to meet with Tether chairman Giancarlo Devasini and President Nayib Bukele, who strongly backs the country’s crypto industry—this president calls himself the “coolest dictator in the world.” After that, Tether officially announced plans to move its headquarters to the country’s capital, San Salvador.

In April 2024, Cantor Fitzgerald spent $600 million to subscribe for a convertible note, obtaining subscription rights to 5% of Tether’s equity. The deal was not disclosed to the public until after Trump won the election in November that year. Based on Tether’s own financial statements and calculations, the discount was extremely large: in 2024, Tether’s net profit was about $13 billion. Using the valuation logic of publicly listed financial institutions, the company’s valuation would be at least $130 billion. By that estimate, Cantor’s investment implied a paper equity value of more than $6 billion.

Bitcoin entrepreneur Cory Klippsten met with Tether executives, including Howard Lutnick, in 2024. According to his account, Tether chairman Giancarlo Devasini described the deal as “ridiculously cheap.”

Cory Klippsten had previously worked with Tether commercially, but the cooperation later broke down and the two sides ended up in litigation. In court filings, Cory Klippsten alleged that Tether executives poached employees, stole program code and trade secrets, and tore up the cooperation agreement. Tether counter-sued Cory Klippsten for alleged violations, claiming it used the Tether investment as collateral for other deals. During the lawsuit, Cory Klippsten sought to subpoena Howard Lutnick to appear in court and to obtain records of interactions between Cantor Fitzgerald and Tether. Lutnick’s attorney argued in court that the Secretary of Commerce was not related to the dispute; the purpose of the evidence-collection request was just to “harass and humiliate Lutnick.”

In court materials filed in March, Cory Klippsten said he fully preserved records of his talks with Giancarlo Devasini that year, and that excerpts from the lawsuit included the phrase “ridiculously cheap.” The filing argued that Cantor’s convertible note in substance was an implicit compensation for Howard Lutnick to act as Tether’s spokesperson in Washington and in the media world.

Early stablecoin regulation bill that was derailed midstream

Members of Congress have long held doubts about Tether. In late 2023, Wyoming Republican Senator Cynthia Lummis co-signed an open letter urging the Department of Justice to investigate whether, during the October 2023 Israel attack, Tether provided material financial support to terrorist organizations such as Hamas. In April 2024, Cynthia Lummis teamed up with New York Democratic Senator Kirsten Gillibrand to introduce a bill requiring all stablecoin issuers operating in the U.S. to comply with U.S. anti-money-laundering rules and information disclosure obligations.

At the time, Cynthia Lummis made her position clear: if Tether wants to enter the U.S. market, it must comply with U.S. regulations. After the bill was announced, she discussed her view in a CoinDesk interview: “If Tether chooses to stay overseas and is willing to be governed by other regulatory entities, that is a business decision for the company. But if it wants to be recognized in the U.S. market, we want it to achieve U.S. compliance.”

That same July, at the Bitcoin Nashville conference, Howard Lutnick publicly supported Tether again, and Trump also delivered a keynote speech at the event. Lutnick said emotionally: “We will never work with any company that is involved in jihadist terror activities. I hate this.” He reminded the audience that during the 2001 World Trade Center attacks, more than 650 Cantor Fitzgerald employees were killed, including his brother.

In July 2024, Trump delivered a speech at the Bitcoin Nashville conference in Nashville, Tennessee. Photo: Brett Carlsen/Bloomberg

After the speech, Trump—who had shifted from crypto skeptics to crypto supporters—invited Howard Lutnick onto the campaign’s private aircraft and appointed him as co-chair of the Presidential Transition Committee. The group flew to Minnesota, where Lutnick took the stage to warm up the event, before Ohio Senator JD Vance (a well-known crypto supporter) delivered remarks.

Notes from Cory Klippsten said: Trump’s election prospects continued to rise, greatly boosting confidence among Tether executives. “They see new opportunities—to fly to New York, to get on CNBC. That’s the kind of platform Trump can bring.”

In 2024, Howard Lutnick traveled to Washington. The lobbyists hired by Cantor Fitzgerald continued to communicate with members of the House and Senate to advance multiple stablecoin bills that were pending at the time. Insiders said Lutnick met with Patrick McHenry, the then-chair of the House Financial Services Committee, to discuss how the new law would affect offshore companies like Tether. Patrick McHenry did not accept an interview. In September of the same year, Lutnick met Cynthia Lummis; a spokesperson for the senator said the meeting mainly involved preparations for the presidential transition team, with only brief mention of her concerns about Tether’s involvement with financial crime.

The spokesperson emphasized: “No one asked Cynthia Lummis to abandon pushing her own bill. The Secretary Lutnick and his team have never, in any form, pressured her to modify the text.”

Court documents cite records kept by Cory Klippsten, relaying remarks from Tether chairman Giancarlo Devasini: “Howard told me he had already blocked all relevant bills related to stablecoins and crypto. There’s still some time before Congress adjourns, and Howard judged that no policies harmful to us would be enacted.”

All of these bills ultimately stalled. The following year, Cynthia Lummis and Kirsten Gillibrand both voted in favor of the revised GENIUS Act, endorsing the clause allowing offshore entities to accept regulatory parity. Kirsten Gillibrand’s spokesperson declined to comment on the voting choice; Cynthia Lummis’s spokesperson said lawmakers often vote for bills that do not exactly match their ideal plans. This year, Cynthia Lummis is leading the drafting of a bill in the Senate to build a regulatory framework for crypto assets beyond stablecoins.

After Trump won the election in November 2024, Cantor Fitzgerald helped facilitate Tether’s next round of investment, further tightening links between Tether and Trump’s business circles. Around Christmas, Tether invested $775 million in Rumble Inc. The conservative video streaming platform provides cloud services and advertising support for Trump’s Truth Social.

Excerpt from the December 20, 2024 transaction agreement. Investor Tether Investment Limited and Delaware-based Rumble Inc signed the agreement: investor will contribute $775 million; the company will issue 103.33M shares of Class A common stock at an issuance price of $7.50 per share. The company also launched a voluntary tender offer for up to 70 million shares, with the repurchase price also at $7.50 per share. Source materials are from the December 2024 filings with the U.S. Securities and Exchange Commission.

The timing of this investment is notable: in that year, Rumble accumulated losses of $338 million. The platform claims to champion freedom of speech and positions itself against mainstream video websites. The list of investors included multiple Trump allies, who later joined Trump’s second administration, including Vice President JD Vance, former deputy director of the FBI Dan Bongino, and former White House special adviser for AI and crypto David Sacks.

After the Tether investment news was released, Rumble’s stock price surged in the short term. On December 26, the closing price was $16.27, up 126% from the day the announcement came out. Rumble has since renamed itself to RUM Group. Of the $525 million (about 68%) invested by Tether, it was used to repurchase shares from the core management team. After that, Tether continued to increase its stake, and the current market value of its holdings is about $875 million.

At the time, Tether CEO Paolo Ardoino said: “Tether’s investment in Rumble was driven by the shared commitment to decentralized principles and transparent operations, as well as the fundamental right to freedom of speech.” The company said about $250 million would be used for business expansion, including building a crypto payments platform.

During the formation phase of Trump’s second-term team, the White House assigned stablecoin legislative推进 work to a former college football player. His first contact with crypto came from participating in the 2014 “Bitcoin Saint Peter’s Bowl” football event.

“Hi, Bo!”

When Bo Hines first entered Washington politics, his resume was not as strong as those of the crypto giants and veteran congressional staffers he dealt with daily. But the young man—1.85 meters tall and 93 kilograms—had the qualities that the Trump White House valued: he looked good on camera, firmly supported the MAGA ideology, and public records show he did not acknowledge the 2020 presidential election results. Beyond that, in the fall of 2024, he and his father’s company jointly invested $1 million in outdoor billboards, funding political action committees supporting Trump’s campaign.

After being appointed by the president, Bo Hines took charge of a brand-new Presidential Council of Digital Asset Advisors. He was responsible for several tasks: studying the creation of a federal crypto asset reserve, drafting regulatory guidance for the crypto industry, and his core mission was to push the GENIUS Act to be enacted.

In early February 2025, the bill text was circulated internally within Washington. In the latter part of that month, crypto executives and lawmakers gathered at the Willard Hotel to workshop the bill. Two attendees confirmed that Tether CEO Paolo Ardoino unexpectedly appeared. Paolo Ardoino told those present that the company was seriously implementing anti-money-laundering work.

In March, Paolo Ardoino posted photos of visiting Congress and the White House on social media. He told The New York Times that after Howard Lutnick formally became Secretary of Commerce in February, he intentionally avoided meeting him to steer clear of potential conflicts of interest.

That same month, Tether hired Washington lobbyist Jeff Miller. Since 2024, Miller has continued representing Cantor Fitzgerald on stablecoin-related matters. Miller served for two consecutive terms as a core member of Trump’s inauguration committees. His consulting firm saw rapid growth in business during Trump’s first term. In 2025, Miller Strategies collected a total of $570k in service fees, including $480k paid by Cantor and $90k paid by Tether.

At the same time, Bo Hines continued to push the work steadily. Insiders said he believed lawmakers did not have the authority to go against the president’s will and kept pressuring all sides to reach consensus as quickly as possible. He also argued that the market overstates the risk of digital tokens being used illegally. In an April interview with Bitcoin Magazine, Bo Hines said: “It is not smart for criminals to use digital assets to commit crimes. In most scenarios, transaction records can be publicly traced.”

The earliest version of the GENIUS Act triggered strong dissatisfaction from Tether’s competitors and Democratic lawmakers. Compared with multiple versions of the 2024 drafts, regulatory constraints were clearly loosened.

In May, a group of Democratic lawmakers (including crypto-policy moderates) jointly resisted, temporarily stalling the bill. Two insiders said that New York Senator Chuck Schumer urged colleagues in a closed-door Democratic meeting to review Tether operating materials compiled by the Biden National Security Council, ensuring that the GENIUS Act sets sufficient protective rules to prevent U.S. adversaries from laundering money using crypto channels.

That same month, Massachusetts Senator Elizabeth Warren urged Democratic colleagues to reject the latest version of the bill. She believed the provisions deliberately loosened regulation and specifically benefited Tether.

Insiders said Bo Hines ignored such concerns, repeatedly citing Trump’s intent and saying the president wanted the bill implemented as soon as possible. Republican congressional leadership continued to push the legislative agenda.

The final focus of the legislative fight centered on the length of the compliance transition period. In private negotiations, Bo Hines insisted that Republicans could not give up the three-year grace period and rejected the Democrats’ proposal to shorten it to 18 months. In multiple internal meetings, he made it clear to all parties that this was a demand proposed by Tether.

Bo Hines ultimately won. At the July signing ceremony, the bill’s main supporters gathered in the White House.

Standing on the stage, Trump looked out at the crowd and asked, “Where is Bo Hines? Hi, Bo! Bo used to be a very good football player, right? The top college football athlete in the U.S.—I met him because of football.” (In his early years, Bo Hines was a wide receiver at the University of North Carolina State, then transferred to Yale; a shoulder injury ended his football career.)

After Bo Hines stood up to accept applause, he sat down. Immediately to his front, in the row next to him, was Tether CEO Paolo Ardoino. Just one month later, Tether officially announced it had hired Bo Hines as an adviser; not long after, Bo Hines was promoted to become CEO of Tether’s new U.S.-compliance token USAT. This new token has limited circulation, with a total supply of about $186 million. In a speech at a crypto industry conference last year, Bo Hines said that both USAT and USDT would meet the GENIUS Act requirements.

At the signing ceremony, between Bo Hines and Vice President JD Vance in the front row sat Howard Lutnick. Trump gestured for him to stand and accept applause from the whole crowd, praising him for his performance in the tariff negotiations: “Howard, you did an excellent job.”

Three months later, Howard Lutnick completed the transaction to sell Cantor Fitzgerald to benefit a trust set up for his children. The day after the deal closed, a filing submitted in New York showed that Tether issued a loan to one of the trusts in an undisclosed amount.

Howard Lutnick refused to disclose publicly the transaction value for the acquisition of assets by his children, and also did not explain whether this Tether loan was used to pay for the acquisition. That same year, Tether approached investors and planned to raise financing at a $500 billion valuation. If that valuation was realized, the potential paper value of the 5% equity stake held by Cantor Fitzgerald would reach $25 billion.