Wall Street CEO on Tether Controversy: 'They Have the Money'

Tether's $95 billion stablecoin has been dogged by questions around whether it actually holds the assets it says are backing USDT. Cantor Fitzgerald's Howard Lutnick, whose firm manages money for Tether, says it does.

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Updated Mar 8, 2024 at 8:02 p.m. UTC
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Cantor Fitzgerald CEO Howard Lutnick vouched for stablecoin issuer Tether's legitimacy on Tuesday, addressing what has been one of the big questions in crypto over the years as its stablecoin, USDT, has grown into a behemoth: Does Tether have the money it says it does.

"They have it," he said during an interview with Bloomberg TV.

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  • That's strong validation for Tether coming from a prominent and influential Wall Street figure. Lutnick's Cantor Fitzgerald is among the best-known bond trading houses on Wall Street and one of 25 primary dealers for U.S. Treasurys, allowing direct trade with the Federal Reserve.

    The stablecoin issuer has long been under the microscope for its backing of USDT, which, with over $95 billion in market capitalization, remains the most widely used stablecoin in the world.

    "I manage many of their assets," said Lutnick, who brought up crypto in the interview that was streamed live from Davos, Switzerland. "From what I've seen – and we did a lot of work – they have the money they say they have."

    Lutnick seemed to refer to Tether's latest attestation report, which showed that it held $86.4 billion of assets in reserves as of Sept. 30 against $83.2 billion in liabilities.

    For years, a big chunk of Tether's reserves were locked up in commercial paper, which worried some observers. However, its latest attestation report shows USDT is mostly backed by U.S. Treasuries, widely considered among the safest assets in the world, and there are no longer any commercial paper holdings.

    Still, the industry isn't completely convinced about the quality of Tether's assets. Most recently, credit rating agency S&P Global's poor score for the stablecoin, which judges characteristics such as "the quality of the asset backing the stablecoin" as well as "weaknesses in other areas, including regulation and supervision, governance, transparency, liquidity and redeemability, and track record" reinforced those concerns.

    Users of USDT are also still waiting for an official audit that would paint a much more precise picture of a company than an attestation.

    Lutnick has previously voiced that he is a fan of Tether. Cantor Fitzgerald is a custodian for the stablecoin issuer's Treasuries.

    When asked about a more prominent topic in crypto news currently – the approval and listing of over a dozen spot bitcoin exchange-traded funds (ETFs) – Lutnick questioned the real value of bitcoin and stablecoins for Americans and argued that crypto currencies are attractive as speculative assets in this country, whereas people in other nations, such as Argentina, Venezuela and Turkey, hold crypto for more substantial reasons.

    "This is a speculative asset for us but for countries like Argentina, Venezuela, Turkey, these crypto assets matter, stablecoins matter in those countries," he said. "It's a way to hold on to the dollar."

    Edited by Aoyon Ashraf.

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    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Helene Braun

    Helene is a New York-based reporter covering Wall Street, the rise of the spot bitcoin ETFs and crypto exchanges. She is also the co-host of CoinDesk's Markets Daily show. Helene is a graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.


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