Revolving Door Exposed: Who Is Tailoring U.S. Stablecoin Regulation for Tether?

This is seen as a landmark event for the crypto industry—the first legislative-level win in Donald Trump’s effort to push the United States to build 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 called the bill a critical step toward bringing digital assets into the United States’ mainstream financial system.

For the first time, the bill sets federal regulatory rules for stablecoins, aiming to reshape market confidence in a sector worth as much as $300 billion. The legislation requires issuers to publish their books and guard against financial fraud; it also plans to bring stablecoin issuers under U.S. regulatory jurisdiction, regardless of whether the company is incorporated in the United States—intended to address the industry’s long-standing pain points: criminals, terrorist organizations, and sanctions-evasion actors repeatedly using stablecoin flow funds.

However, extensive interview records and court documents reveal inside details of the negotiations. In the months before and around Trump’s inauguration, his adviser Howard Lutnick and Bo Hines operated behind the scenes, weakening regulatory constraint provisions. The final bill disproportionately favored Tether, one of the world’s leading stablecoin issuers. Multiple people familiar with the talks said that among Trump’s staff, Lutnick and Hines played decisive roles in steering 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 requested anonymity because they lacked authority to disclose negotiation details publicly.

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

Before serving as U.S. Commerce Secretary in the Trump administration, Howard Lutnick was chairman and CEO of the Wall Street investment bank Cantor Fitzgerald—an institution entrusted to manage Tether’s reserve assets. Congressional lobbying records, federal court filings, and a source familiar with the matter confirm that throughout 2024, Lutnick acted as Tether’s crisis communications lead, calming negative public sentiment and lobbying lawmakers to resist bills that Tether did not support.

After Trump took office, Bo Hines handled the closing phase of the legislative power struggle. At 29 years old, this White House staffer 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 a “hardliner enforcer” pushing the bill within the White House. Three insiders said that as the negotiations neared completion, Hines publicly signaled externally that the terms Tether was pushing to land were White House “red lines” that could not be crossed.

This report lays out the full legislative timeline and exposes previously undisclosed operational maneuvers: first Howard Lutnick, then—through coordinated efforts led by Bo Hines—helping Tether, which holds about 60% of the global stablecoin market share, secure favorable rules. The story also clearly shows how policy-making in this administration is deeply intertwined with the personal economic interests of officials. Both Hines and Lutnick received substantial returns from Tether.

From 2024 onward until shortly after the GENIUS Act took effect, for a period of 18 months, Tether executives completed a series of business arrangements:

In April 2024, Tether sold, for $600 million, the option to subscribe to equity worth several billions of dollars in a company owned by an institution under Howard Lutnick’s control. The transaction price was only $600 million. The chairman of Tether reportedly told partners directly that the deal price was “ridiculously low.”

In December 2024, Tether invested $775 million in the persistently loss-making Rumble Inc. The streaming company reached an agreement with the company operating the Trump Truth Social platform, and multiple people from Trump’s camp were listed as investors.

In August 2025, Bo Hines was hired as an executive—only one month after the bill was signed.

In October 2025, Tether provided a loan to a trust; the trust beneficiaries were Howard Lutnick’s children, who at the time were in the process of acquiring their father’s business assets worth several billions of dollars.

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

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

Tether released an official statement, strongly denying that it engaged in improper lobbying with policymakers regarding stablecoin legislation. The company said it has long engaged in legal, transparent communication with regulators, lawmakers, and law-enforcement agencies, and that many market participants do similar exchanges. Tether also emphasized that the GENIUS Act contains no special benefits for Tether, and that the entire set of new rules will apply uniformly to all stablecoin issuers that want to operate under the framework.

The bill sparked intense lobbying across the entire financial industry—crypto exchanges, credit card issuers, and community banks all joined the game. But there is no doubt that Tether is the absolute leader in the industry. Its largest competitor is only about half its size; therefore, during the 2025 bill negotiation stage, Tether had the highest stakes weight.

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

The final text of the GENIUS Act contains multiple provisions that tilt toward Tether, with significant differences from the earlier stablecoin regulatory drafts proposed by members of Congress. Stablecoins have both convenience and pseudonymity: blockchain wallet addresses remain permanently public, but the real identity of users cannot be directly traced.

Trump’s key aides steering crypto legislation

As early as 2023 to 2024, lawmakers from both parties drafted bills with hard requirements: non-U.S. stablecoin companies (such as Tether) must accept U.S. regulatory review and implement a full anti-money-laundering compliance regime if they want to do business in the United States.

The GENIUS Act substantially loosened that requirement. Critics call it an “equivalent regulatory loophole.” The clause states that as long as the U.S. Secretary of the Treasury determines that El Salvador’s regulatory standards are broadly equivalent to those of the United States, Tether’s USDT can be overseen by El Salvador’s regulators—and Tether is planning to move its headquarters there. The implementation details for how equivalence determinations are made are still being drafted.

Another change narrows the responsibility boundary for stablecoin issuers, which insiders call a “DeFi loophole”: issuers do not need to track whether tokens are abused in secondary markets in decentralized finance. Users can bypass banks and exchanges and trade directly peer-to-peer on the blockchain without verifying identity or explaining sources and uses of funds.

The bill also sets a three-year compliance grace period: stablecoin issuers entering the U.S. market will not be forced to meet all compliance requirements within the first three years. During legislative negotiations, some Democratic lawmakers proposed shortening the grace period to 18 months, and insiders said Tether insisted on keeping the three-year term—at critical moments, Bo Hines stepped in and fought hard.

During the negotiations, Bo Hines told all sides that Tether was important to the White House and that Republicans should hold their position. Three insiders said Hines explicitly argued that keeping a three-year transition period was an uncompromisable red line.

Bo Hines was appointed by Trump to serve as executive director of the President’s Council on Digital Assets, driving the push for the GENIUS Act through Congress. Photo: Tierney L. Cross/Bloomberg

Many financial experts warned that these provisions would weaken the United States’ ability to combat money laundering by criminals and sanctioned entities, while also blocking Trump’s goal of establishing global leadership in digital currency.

Timothy Massad, former assistant secretary of the Treasury in the Obama administration, raised concerns: regulatory loopholes would create unfair competition—U.S.-based crypto firms would face high compliance costs, while overseas issuers could evade strict anti-money-laundering rules, and could even undermine the global reserve currency position of the U.S. dollar. Timothy Massad previously served as chair of the U.S. Commodity Futures Trading Commission from 2014 to 2017.

“If we want the dollar to retain its status as the world’s core reserve currency, we cannot allow terrorists, sanctioned individuals, and other criminals to anonymously transfer dollar funds.” Timothy Massad said.

Any currency carries the risk of being used illegally. However, since USDT was introduced in 2014, Tether has continued to face criticism that it does not conduct sufficient due diligence on users. In its early years, Tether argued that establishing companies overseas could protect it from what the U.S. calls “overregulation.” But its position later changed: in December 2023, Tether issued rules to proactively freeze wallet addresses associated with individuals and entities that the U.S. Treasury listed on sanctions lists.

Investigation groups have continued to gather evidence showing that USDT has been used for activities such as Mexican fentanyl smuggling and helping Russia evade sanctions. A United Nations report in January 2024 said that the preferred tool of crypto money-laundering crews in Southeast Asia is USDT. Two insiders said that in 2024, the Biden administration’s National Security Council even discussed a broad ban on Tether tokens entering the U.S. market.

Ultimately, that proposal was shelved. Law enforcement gave the rationale that USDT-related illegal funds could still be tracked through on-chain transactions. In the long term, federal law enforcement has also come to recognize that Tether’s willingness to freeze involved assets has improved.

A Tether spokesperson responded to the interview: “The company has built an enforcement cooperation mechanism that leads in effectiveness across the global financial sector.” The company said it is committed to fighting financial crime, and the GENIUS Act will further strengthen related work.

Even so, throughout the entire bill negotiation process and after implementation, USDT continues to be frequently used by illicit groups.

Blockchain analytics firm Elliptic data shows: in 2025, a sanctioned Iranian bank bought USDT worth $507 million. In the same year, in July—also the month Trump signed the bill—Elliptic detected inflows of nearly $2.5 billion in USDT into wallets tied to multiple Russian-related entities. The U.S. Treasury determined that such entities built cross-border channels to help parties evade sanctions.

Even just this year, USDT worth more than $4 billion has circulated on the black market operated by Chinese-scam syndicates, used for crimes such as pig-butchering scams, impersonation scams, and sexual extortion; the data also came from Elliptic.

Court filings show that starting in July 2025, federal prosecutors across the United States initiated dozens of lawsuits seeking to seize USDT involved in the cases, with a total amount of at least $172 million.

Tether’s total circulating supply is more than double that of its top competitor, Circle Internet Group Inc, but its employee count is less than half. Large amounts of suspicious-transaction analysis work are outsourced to third-party institutions. Tether declined to disclose the size of its compliance team, but said publicly: “We continuously collaborate on a routine basis with 67 global jurisdictions and more than 340 law-enforcement agencies to identify, freeze, and assist in recovering assets related to illegal activities.”

A company spokesperson said: “This is not just paper-level compliance promises. It is practical cooperation that can be implemented and measured, at a level that most traditional financial institutions can hardly achieve.”

Howard Lutnick’s lobbying playbook

Cantor Fitzgerald has managed Tether reserve assets since 2021. At that time, this investment-banking executive had known Trump for decades. Trump had just finished his first term and was preparing to return to the White House. Tether’s profitability is strong, but the market reputation has been heavily controversial. In 2024, Howard Lutnick simultaneously worked across multiple fronts for Trump’s campaign and for Tether.

To earn investors’ trust that a token is backed by sufficient reserves, independent audits are crucial—but Tether has never published a complete independently audited reserve report. In 2021, Tether and its affiliated exchange paid a $61 million settlement to resolve allegations brought by federal regulators and the State of New York. Regulators alleged that Tether made false statements about the size of its reserves and misled investors; in the settlement agreement, Tether did not admit wrongdoing. Under the GENIUS Act provisions, stablecoin issuers must produce audit reports every year. This year, Tether announced it had hired an auditing firm, but had not yet disclosed a timetable for when it would release the complete audit report.

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

As market doubts about the authenticity of Tether’s reserves persisted, Howard Lutnick publicly stepped up to endorse Tether. In January 2024, he traveled to the Davos forum and, during a Bloomberg TV broadcast, said: “They have the funds reserves they claim to have.”

The following month, Howard Lutnick visited El Salvador to meet Tether chairman Giancarlo Devasini, as well as President Nayib Bukele, who strongly supports the crypto industry in the country—Bukele calls himself the “coolest dictator in the world.” After that, Tether officially announced plans to move its headquarters to the capital city of San Salvador.

In April 2024, Cantor Fitzgerald paid $103.33M to subscribe for convertible notes and obtained the right to subscribe for 5% of Tether’s equity. The deal was not made public externally until after Trump won the election in November of that year. Combined with Tether’s own financial reports, the deal discount was enormous: Tether’s net profit in 2024 was about $13 billion. Using publicly listed financial institutions’ valuation logic, the company’s valuation would be at least $130 billion. On that basis, the paper value of the equity for Cantor’s investment exceeded $6 billion.

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

Cory Klippsten previously collaborated commercially with Tether, and the later partnership broke down, leading both sides into litigation. In court documents, Cory Klippsten accused Tether executives of poaching employees, stealing program code and trade secrets, and tearing up the cooperation agreement; Tether counter-sued Cory Klippsten for allegedly violating terms by using Tether’s investment as collateral for other deals. During the litigation, Cory Klippsten sought to subpoena Howard Lutnick to testify and requested Cantor Fitzgerald’s and Tether’s records of interactions. Lutnick’s attorney argued in court that the Secretary of Commerce had no relation to the dispute and that the evidence-gathering request was meant only to “harass and humiliate Lutnick.”

In court materials filed in March, Cory Klippsten said he had fully preserved records of conversations he had had that year with Giancarlo Devasini, and that excerpts in the lawsuit include the statement “ridiculously cheap.” The filing’s argument was that Cantor’s convertible note deal was essentially an implicit payment to Howard Lutnick for acting as a proxy spokesman for Tether in Washington and the media circles.

An early regulatory bill that died midstream

Members of Congress had long harbored doubts about Tether. At the end of 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 substantive funding 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 stated clearly: if Tether wants to enter the U.S. market, it must comply with U.S. regulations. After the bill was introduced, in an interview with CoinDesk she said: “If Tether chooses to stay overseas and agrees to be governed by other regulatory authorities, that is a business decision by the company. But if it wants to be recognized in the U.S. market, we want it to achieve U.S. compliance.”

That July, at the Nashville Bitcoin Conference, Howard Lutnick once again publicly supported Tether, while Trump also delivered a keynote speech at the event. Lutnick said with visible emotion: “We will never partner with any company involved in jihadist terrorist activities—I find that utterly repugnant.” He reminded the audience that in the 2001 World Trade Center attacks, more than 650 Cantor Fitzgerald employees were killed, including his brother.

In July 2024, Trump spoke at the Nashville Bitcoin Conference in Tennessee. Photo: Brett Carlsen/Bloomberg

After the speech, Trump—who had shifted from crypto skeptics to crypto supporters—invited Howard Lutnick aboard his campaign plane and appointed him joint chair of the presidential transition committee. The group flew to Minnesota, where Lutnick took the stage to warm up the event, followed by remarks from Ohio Senator JD Vance (a well-known crypto supporter).

Cory Klippsten’s notes wrote: Trump’s election momentum kept rising, greatly boosting confidence among Tether executives. “They see new opportunities—to fly to New York, to get on CNBC. That’s the platform Trump can bring.”

In 2024, Howard Lutnick went to Washington. Lobbyists hired by Cantor Fitzgerald continued to communicate with members of the House and Senate, pushing several stablecoin bills that were under consideration at the time. Insiders said Lutnick met with Patrick McHenry, then-chair of the House Financial Services Committee, to discuss how the new law would affect overseas entities such as Tether. Patrick McHenry did not agree to be interviewed. That same year in September, Lutnick met Cynthia Lummis; a spokesperson for the senator said the meeting focused mainly on preparations by the presidential transition team, with only brief mention of her concerns about Tether’s links to financial crimes.

The spokesperson emphasized: “No one persuaded Cynthia Lummis to abandon pushing her own bill. The Secretary and his team have never pressured her in any form to amend the provisions.”

Court documents citing records Cory Klippsten kept quote Tether chairman Giancarlo Devasini as saying: “Howard told me he has blocked all the bills related to stablecoins and crypto currency. There’s still time before Congress recesses. Howard thinks no policy unfavorable to us will be出台.”

All of those bills were ultimately shelved. The following year, Cynthia Lummis and Kirsten Gillibrand both voted in favor of the revised GENIUS Act, acknowledging the clause within the bill that allows overseas entities to accept equivalent regulation. A spokesperson for Kirsten Gillibrand declined to comment on the vote choice; a spokesperson for Cynthia Lummis said lawmakers often vote for bills that do not fully match their preferred ideals. 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’s election victory in November 2024, Cantor Fitzgerald helped broker Tether’s next round of investment, further deepening links between Tether and Trump’s business circle. Around Christmas, Tether injected $775 million into Rumble Inc. The conservative video-streaming platform provides cloud services and advertising support for Trump’s Truth Social.

A selected excerpt from the transaction agreement dated December 20, 2024. Tether Investment Limited (the investor) and Delaware-incorporated Rumble Inc signed an agreement: the investor would contribute $775 million; the company would issue 103.33M shares of Class A common stock at an issue price of $7.50 per share. The company also launched a voluntary tender offer to repurchase up to 70 million shares, at the same repurchase price of $7.50 per share. Source: U.S. Securities and Exchange Commission filing dated December 2024.

The timing of this investment is striking: that year, Rumble had cumulative losses of $338 million. The platform claims to champion freedom of speech and positions itself against mainstream video sites; the investor roster included multiple Trump allies, who later joined Trump’s second-term administration, including Vice President JD Vance, former FBI deputy director Dan Bongino, and former White House special adviser on AI and crypto David Sacks.

After the investment news was released, Rumble’s stock surged in the short term. It closed at $16.27 on December 26, up 126% from the announcement day. Rumble has since been renamed RUM Group. Of the $525 million (about 68%) invested by Tether, the company used it to repurchase shares from the core management team. Since then, Tether has continued to increase its holdings; its current position value is about $875 million.

At the time, Tether CEO Paolo Ardoino said: “Tether invested in Rumble because both sides share the principles of decentralized operation and transparent operations, as well as the basic 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 stage of Trump’s second administration, the White House handed the task of pushing stablecoin legislation to a former college football player. He first encountered cryptocurrency through participating in the 2014 “Bitcoin St. Petersburg” football event.

“Hi, Bo!”

Bo Hines’s résumé when he first entered Washington politics cannot compare with the day-to-day crypto giants and long-time congressional insiders he interacts with. But this young man, 1.85 meters tall and 93 kilograms, has traits that the Trump White House values: he is camera-friendly, firmly supports MAGA, and public records show that he does not recognize the 2020 presidential election results. In addition, in the autumn of 2024, an outdoor billboard company he co-ran with his father funded and invested $1 million in political advertising for a political action committee supporting Trump.

Appointed by the president, Bo Hines led the new President’s Council on Digital Assets, responsible for multiple tasks: studying the establishment of a federal crypto asset reserve, drafting regulatory guidance for the crypto industry, and his core mission was to push for the GENIUS Act to be implemented.

In early February 2025, the bill text was circulated internally within Washington. In late that month, crypto executives and lawmakers gathered at the Willard Hotel for discussions. Two attendees confirmed that Tether CEO Paolo Ardoino unexpectedly showed up. 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 officially took office as Commerce Secretary in February, he deliberately avoided meeting him to steer clear of potential conflicts of interest.

That same month, Tether hired the D.C. lobbyist Jeff Miller. He has represented Cantor Fitzgerald on stablecoin-related matters continuously since 2024. Jeff Miller served as a key member of the Trump inauguration committee for two consecutive administrations. His consulting firm’s business grew rapidly during Trump’s first term. In 2025 as a whole, Miller Strategies collected $570k in service fees—$480k paid by Cantor and $90k paid by Tether.

Meanwhile, Bo Hines continued to push his work forward steadily. Insiders said he believed lawmakers lacked the authority to go against the president’s wishes and he kept pressuring all sides to reach consensus quickly. He also argued that the market has greatly exaggerated the risk of digital tokens being used illegally. In an April interview with Bitcoin Magazine, Bo Hines said: “It’s not wise for criminals to use digital assets to commit crimes. In most cases, transaction records can be publicly traced.”

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

In May, a group of Democratic lawmakers (including moderate voices in crypto policy) coordinated a boycott, temporarily stalling progress of the bill. Two insiders said that New York Senator Chuck Schumer urged colleagues in a closed-door Democratic meeting to consult Tether operational materials prepared by the Biden National Security Agency, ensuring the GENIUS Act included sufficient guardrails to prevent U.S. opponents from laundering money through crypto channels.

That same month, Massachusetts Senator Elizabeth Warren called on her fellow Democrats to reject the latest version. She said the provisions were designed to loosen regulation on purpose and specifically benefit Tether.

Insiders said Bo Hines ignored these concerns, frequently citing the president’s wishes and claiming that Trump wanted the bill to be implemented as soon as possible. Republican congressional leadership continued to push the legislative agenda.

The final battleground of the bill ended up being 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 Democrats’ proposal to cut it down to 18 months. In multiple internal meetings, he made it clear to everyone that this was Tether’s demand.

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

Standing on stage, Trump looked around the crowd and asked out loud: “Where is Bo Hines? Hi, Bo! Bo used to be a very good football player, right? He was an all-top college football player in the United States. I know him because of football.” (Bo Hines was an outside receiver for the University of North Carolina early on, then transferred to Yale; a shoulder injury ended his football career.)

After Bo Hines got up to receive applause and took his seat, the person seated immediately next to him in the front row was Tether CEO Paolo Ardoino. Only one month later, Tether announced it had hired Bo Hines as an adviser. Soon after, Bo Hines was promoted to become CEO of Tether’s new U.S.-compliant token, USAT. This new token has limited circulation, with a total size of about $186 million. Bo Hines said at a crypto industry conference last year that both USAT and USDT would meet the requirements of the GENIUS Act.

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

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

Howard Lutnick refused to disclose publicly the transaction amount of how much his children paid to acquire the assets, and also did not specify whether the Tether loan was used to pay the purchase price. In the same year, Tether approached potential investors to plan financing based on a $500 billion valuation. If that valuation were to be realized, the potential paper value of the 5% equity held by Cantor Fitzgerald would reach $25 billion.