Commerce Secretary Lutnick: US dollar stablecoins should be audited

Howard Lutnick, President Trump’s pick for U.S. Commerce Secretary, faced tough questioning from lawmakers over his ties to Tether and the alleged criminal use of its dollar stablecoin.

Speaking at a Senate hearing to to evaluate his nomination, the Cantor Fitzgerald CEO responded to a wave of inquiries about Tether’s potential role in illicit finance.

Tether’s USDT (USDT) stablecoin and its reserves have been under scrutiny for years, with policymakers raising concerns about the company’s lack of professional audits. A primary allegation suggests that without proper audits, Tether could be concealing up to $19 billion in illegal activity.

In 2023, Republican lawmakers asked the Department of Justice whether Binance and Tether were facilitating terror financing. In 2024, The Wall Street Journal reported that U.S. investigators had also probed Tether’s operator over potential sanctions violations and money laundering breaches.

Tether and its CEO, Paolo Ardoino, have categorically denied these allegations, claiming that no investigation is underway. The company publishes quarterly attestations to reassure users, though many observers consider these reports insufficient.

USDT’s issuer also paid $41 million in civil penalties as part of a 2021 settlement with the Commodity Futures Trading Commission. According to the CFTC, Tether misrepresented its claim that USDT was fully backed by reserves at all times.

During the hearing, Senate Commerce Committee ranking Democrat Maria Cantwell pressed Lutnick on stablecoin audits. He responded by stating that “U.S. dollar stablecoins should be audited” and “completely backed by U.S. Treasuries, 100%.”

Cantwell also referenced allegations that Chinese, North Korean, and Russian criminal groups have used USDT for illicit transactions. In response, Lutnick argued that fiat currency remains the primary tool for bad actors and that innovators should not be blamed for the misuse of their technology.

“It’s like blaming Apple because criminals use Apple phones,” Lutnick pushed back.

President Trump selected Lutnick to serve as the next U.S. Commerce Secretary, pending Senate confirmation. In this role, he would focus on job creation and collaborate with Trump’s crypto council to shape digital asset policies.

Due to conflicts of interest in this office, Lutnick agreed to depart Cantor Fitzgerald, which is a Tether custodian.

“I will divest, I will sell all of my interests, my business interests, all of my assets, everything,” Lutnick said during the hearing.