US investment bank Cantor Fitzgerald is facing scrutiny from a senior Senate Democrat over its ties to stablecoin issuer Tether, with Sen. Richard Blumenthal demanding records on the firm's partnership with the stablecoin issuer and on how much Commerce Secretary Howard Lutnick's family has made from the arrangement.

In a letter sent Thursday, Blumenthal, the ranking Democrat on the Senate's Permanent Subcommittee on Investigations, asked Cantor chairman Brandon Lutnick to explain how the bank monitors Tether's compliance with banking and sanctions laws. He also requested all communications involving Howard Lutnick about Tether, including those sent after he left Cantor.

The letter extends congressional scrutiny of stablecoins beyond the issuers themselves to the Wall Street banks that service them, and adds questions about a sitting cabinet secretary's family finances to the debate over the sector's role in illicit finance.

"Disturbingly, Cantor Fitzgerald's lucrative business arrangements with Tether come at the expense of America's national security," Blumenthal wrote.

A multibillion-dollar partnership under scrutiny

The inquiry puts Cantor's lucrative partnership with Tether under examination. Cantor Fitzgerald acquired rights to a 5% stake in Tether in 2024 and reportedly custodies tens of billions of dollars of the stablecoin issuer's US Treasury bill reserves.

Tether's USDt ($USDT) is the largest stablecoin by market value, and issuers keep much of their backing in short-term US government debt — a structure that has made bank custody arrangements like Cantor's a focus of congressional interest.

Blumenthal alleges that Cantor's stake in Tether has increased in estimated value from $600 million to $10 billion since Trump returned to office, and that Howard Lutnick received more than $250 million in that period, including a $192 million distribution from Cantor Fitzgerald.

The letter follows a report published last month by the Democratic investigators on the Senate Permanent Subcommittee on Investigations, which alleged that Tether's USDt ($USDT) has become a key tool for Iran's shadow banking network. Blumenthal called on the US Treasury and Justice Department to investigate potential sanctions violations.

Tether responded with a statement saying it has been working with law enforcement for years and has frozen nearly $550 million in Iran-linked $USDT this year.

"Just as Tether has made untold millions in interest and investments from the stablecoins used in these illicit activities, so has Cantor Fitzgerald profited from its relationship with Tether," Blumenthal wrote in his latest letter to Cantor.

Cointelegraph reached out to Cantor Fitzgerald and Tether but did not receive an immediate response.

Cantor-Tether ties date back to 2021

Cantor's relationship with Tether began in 2021, when the bank started acting as a custodian for a portion of the US Treasuries backing the stablecoin issuer's reserves. Howard Lutnick oversaw Cantor as chairman and CEO during that period and helped negotiate its investment in Tether in April 2024.

Lutnick stepped down from Cantor after the Senate confirmed him as commerce secretary in February 2025. The firm then named his son Brandon chairman and his other son vice chairman.

Records sought beyond earnings

Beyond earnings and compliance records, Blumenthal is seeking the terms of Howard Lutnick's divestiture from Cantor, along with details of any other loans or financing Tether provided to Lutnick or his family to facilitate the transfer of ownership to his children.

The senator has also asked whether Cantor requires independent audits of Tether, whether it has ever reviewed terminating the partnership, and what steps it has taken to investigate allegations of illicit finance and sanctions evasion.

Blumenthal has asked Cantor to respond by Oct. 23. Beyond the bank's response, whether the Treasury and Justice departments act on his earlier call to investigate potential sanctions violations is the other major open question in the inquiry.