Last month, Tether’s CEO Paolo Ardoino attended a private lunch with business leaders and lawmakers at the Willard, a luxury hotel situated near the White House.
Tether has long been accused of financial misrepresentation and enabling illegal activities on its platform. However, at the Willard, Ardoino and other leaders from the crypto sector received a warm reception from Sen. Bill Hagerty, a Republican from Tennessee who serves on the Senate Banking Committee. He participated in the lunch, and discussions on digital currency regulations and national security were led by four knowledgeable attendees.
This gathering signifies a transforming landscape for crypto firms, especially with President Trump expressing support for the industry. Once operating with minimal visibility in the U.S., Tether is now seizing this shift to expand its influence in Washington.
Since President Trump took office, Tether has been advocating for regulatory changes in response to its U.S. operations. The company’s primary product, a cryptocurrency known as Stablecoin, aims to maintain a consistent price of $1. Tether aligns with a push in Congress surrounding Senate bills; legislation was introduced this year by Hagerty to define rules for Stablecoins. The firm also initiated a public relations campaign, featuring advertisements in influential Washington publications and highlighting cooperation with U.S. law enforcement agencies.
For years, Tether was viewed with suspicion. Its stability has been a favored method for criminals. In 2021, the company paid $18.5 million to settle a fraud investigation by the New York Attorney General’s office.
However, within mere days of taking office, Trump, who had begun exploring crypto alongside his sons the previous year, reversed the Biden administration’s stringent stance on digital assets. Crypto firms that once avoided the U.S. for fear of regulatory actions now enjoy significant access to Congress and the White House.
No one has undergone a transformation as pronounced as Ardoino, an Italian who had not set foot in the U.S. until this year. During a trip to Washington in March, he met with lawmakers and attended forums hosted by the Commodity Futures Trading Commission, mingling with industry peers at a gathering sponsored by Coinbase, a major crypto exchange.
In a recent interview and social media update, Ardoino described himself as an average foreigner on a delightful journey across America, sharing photos of his visit to the U.S. Capitol and the White House, as well as his experiences at the Central Park Zoo and the Museum of Natural History.
“I’m very naive,” he remarked in an interview with the New York Times. “I’m sure I’ll finally have my first Italian meal in New York at the age of 40.”
Ardoino takes pride in Tether’s robust partnerships. The company’s most prominent ally is investment bank Cantor Fitzgerald, which until recently was led by Howard Lutnick, Trump’s former Secretary of Commerce. One of Tether’s principal lobbyists is Jeff Miller, a significant Republican political player. Cantor Fitzgerald is also involved in discussions surrounding the Stablecoin Bill.
During his recent visit, Ardoino also met Zach Witkoff, the head of Trump’s crypto initiative, World Liberty Financial, and the son of the White House envoy to the Middle East. Tether sought guidance on media strategies from Washitz, the corporate public relations firm founded by former Republican leaders Miller and Kevin McCarthy.
“I’ve met Kevin several times,” Ardoino shared. “We maintain a solid relationship,” he noted, “because we respect the boundary that he hasn’t been involved with Howard during his term.”
Lutnick’s representative did not respond to inquiries for comments.
In a statement, Miller referred to Tether as “the ultimate ally for America,” expressing pride in representing them. A spokesperson for Hagerty mentioned that the senator participated in the March lunch to discuss the relationship between digital assets and national security.
Even within the chaotic world of crypto, Tether’s origin story is particularly intriguing, featuring a diverse array of characters. The company was founded 11 years ago by ex-child actor Brock Pierce, who, alongside his associates, eventually transferred control to Italian Giancarlo Devasini, a former plastic surgeon.
Devasini, now a crypto millionaire, lives in Switzerland and is seldom in the limelight. Ardoino, a former software developer who has been connected with Tether for much of the past decade, stated that since 2014, he has served as the public face of the company.
Tether’s offerings aim to mitigate the significant drawbacks of traditional cryptocurrencies, which are often volatile and less practical for everyday transactions. Stablecoins retain a $1 valuation, making them a preferred choice for many crypto traders.
In essence, Tether and similar issuers function akin to banks. For instance, if a trader deposits $500, they receive 500 Tether coins. The issuer earns income by investing some of these deposits while maintaining their own returns. The model relies on the issuer having sufficient reserves for each coin in circulation and the ability for customers to redeem holdings at any time.
Critics of Tether have long argued that their reserves are inadequate to cover redemption requests. When the New York State Attorney General’s Office announced its 2021 settlement, it was stated that Tether had misrepresented the nature of its reserves, dubbing its cryptocurrency both “unstable” and “stable.”
“Tether’s reputation should matter to everyone,” emphasized California Representative Maxine Waters, a leading Democrat on the House Financial Services Committee in an interview.
Yet, Tether has continually managed to navigate challenges. Currently, the company has made its public audit accessible, revealing that approximately two-thirds of its reserves, equating to about $94 billion, are invested in U.S. Treasury bills.
Last year, Tether recorded profits exceeding $13 billion, establishing itself as one of the wealthiest cryptocurrency operations globally. In December, Tether made an investment of $775 million in Rumble, a right-leaning streaming platform closely associated with Trump Media & Technology Group. Additionally, it has unveiled plans for Tether Tower, a headquarters in El Salvador.
One of Tether’s most influential allies in the U.S. is Lutnick, whose company, Cantor Fitzgerald, manages billions in U.S. Treasury investments for Tether, lending the firm an air of institutional credibility. At last summer’s Bitcoin Conference, Lutnick confirmed that he could verify full backing for Tether coins.
“We accounted for every penny,” he stated at the event. He exclaimed.
After Lutnick was appointed as Secretary of Commerce, he delegated control of Cantor Fitzgerald to his sons. Currently, Cantor Fitzgerald and Tether, in collaboration with lobbyist Miller, are working on shaping Stablecoin regulations in Washington. Lobbying disclosures indicate that both are active in discussions on the Senate’s Stablecoin Act, which sets guidelines to ensure that U.S. issuers maintain adequate reserves.
However, the official guidelines introduced for national innovation under the U.S. Stablecoins Act include provisions allowing foreign issuers to sell coins without adhering to the new regulations, subject to certain law enforcement agency requirements. This clause has drawn criticism from Democratic senators during recent Banking Committee hearings, who denounced it as a “significant loophole” benefiting Tether.
“My Republican colleagues appear concerned about backlash from one of Donald Trump’s close associates,” remarked Senator Elizabeth Warren, a Democrat from Massachusetts.She stated at the hearing.
Ultimately, the Banking Committee approved advancing the bill to the full Senate.
In an interview, Ardoino expressed that he is “very excited” about the Genius Law’s language requiring cooperation with law enforcement, as Tether is already closely collaborating with U.S. authorities. He revealed that Tether is considering launching a U.S. branch and offering “domestic stubcoins” tailored for financial institutions.
Ardoino plans to return frequently to the U.S. He described Washington as “very clean,” although he had some reservations about the food. He is enthusiastic about the potential to challenge American crypto firms on their home turf.
“What fun,” Ardoino remarked.
Source: www.nytimes.com
