- Senator Richard Blumenthal, the ranking Democrat on the Senate’s Permanent Subcommittee on Investigations, sent letters Thursday to Tether and to Nxum Group, the consulting firm Bo Hines started with his father and another partner. Hines is the former White House crypto adviser who now runs Tether’s US arm.
- The Wall Street Journal reported last week that Nxum received large payments for consulting work for Tether while Hines was still advising President Donald Trump’s administration on crypto policy, including on stablecoin issuers significant to Tether. Blumenthal wrote that the relationship raises “alarming ethical and legal concerns.”
- Tether said external counsel previously conducted an in-depth internal investigation that “found no evidence of wrongdoing.” CEO Paolo Ardoino also criticized the senator this week, saying Blumenthal ignored important information and shared his report with the press before giving the company a chance to respond.
- Prediction market Kalshi currently gives Democrats a 69% chance of taking back the Senate. If Blumenthal returns to chair the investigations subcommittee, he would gain significantly greater power to subpoena and control the agenda, and he has made clear that crypto would be high on his list.
What Happened?
Blumenthal requested details of the business arrangements between Tether, Nxum and Hines, writing to Ardoino that Tether was “likely well aware of the illegality and impropriety” of paying a current White House official with a direct role in shaping crypto legislation, CoinDesk reported. CoinDesk had earlier reported that Nxum, which had little track record or experience in politics, was making millions of dollars as the main campaign-advertising provider for a political action committee associated with Tether. Nxum has also recently hired Harry Jung, another former White House crypto adviser. The White House office that advised Trump on crypto has since gone vacant following the departure of Patrick Witt, who replaced Hines as its executive director.
Why It Matters?
The probe goes to the heart of how Tether built its US presence, since Hines advised on stablecoin policy before taking charge of the company’s US arm. Questions over whether payments reached a sitting White House official while crypto legislation was being shaped could become a reputational and legal overhang for Tether’s US business. The letters add to a growing list of Blumenthal inquiries into Tether, including a report on its financial connections to Iran and questions about its ties to US financial partner Cantor Fitzgerald. As the ranking minority member, Blumenthal can demand answers but lacks the expanded subpoena and agenda-setting powers that come with the chair.
What’s Next?
Watch how Tether and Nxum respond to Blumenthal’s requests for details of their arrangements. The bigger catalyst is control of the Senate, since a Democratic majority would hand Blumenthal far greater power to compel testimony and documents. Kalshi’s 69% odds suggest crypto firms should prepare for tougher oversight, with Blumenthal already scrutinizing Trump’s memecoin, World Liberty Financial and Binance. Further reporting on Nxum’s work for the Tether-linked political action committee could add to the pressure.
Affected Tickers and Coins: USDT
Source: CoinDesk
