Key Takeaways
- • Sen. Richard Blumenthal (D-Conn.) sent a letter to Tether and to Bo Hines demanding answers over reported multimillion-dollar payments from Tether to Nxum, a consulting firm founded by Hines and his father.
- • Blumenthal says the payments implicate federal ethics, anticorruption, and lobbying laws, given Hines' role as White House top crypto adviser during passage of the GENIUS Act.
- • The Wall Street Journal reported that Tether began the business relationship with Nxum weeks after Hines took the helm as the White House's top crypto advisor.
- • Tether says external counsel previously investigated the matter and found no evidence of wrongdoing, and the company is reviewing the letter.
- • Blumenthal also wrote to Nxum, which now employs Harry Jung, former deputy director of the President's Council of Advisors for Digital Assets.
Summary
Sen. Richard Blumenthal, a Connecticut Democrat, said he wants answers from Tether following reports that the stablecoin issuer paid millions of dollars to Nxum, a consulting firm started by former White House crypto adviser Bo Hines and his father. The payments reportedly occurred amid negotiations over stablecoin legislation. In a letter sent to Tether and Hines, Blumenthal said the relationship raised legal and ethical concerns. "Tether's alleged multimillion-dollar payment to a firm controlled by the White House official primarily responsible for cryptocurrency policy implicates federal ethics, anticorruption, and lobbying laws," he said on Thursday.
According to The Wall Street Journal, which first reported the relationship the prior week, Tether began working with Nxum weeks after Hines took the helm as the White House's top crypto advisor. During Hines' tenure, he played a pivotal role in passing the GENIUS Act, which created the first federal regulatory framework for stablecoins. Tether, the issuer of the world's largest stablecoin, advocated for that legislation and subsequently launched USAT, a U.S.-based version of its flagship stablecoin.
A Tether spokesperson told The Block that the company is aware of the allegations and is reviewing the letter. The spokesperson said external counsel previously conducted an in-depth internal investigation that found no evidence of wrongdoing. Blumenthal asked Tether to produce records of its business dealings with both Nxum and Hines.
Blumenthal also sent a letter to Nxum on Thursday. Harry Jung, the now-former deputy director of the President's Council of Advisors for Digital Assets who worked alongside Hines, is now at Nxum, according to his X account. Leadership at the council is also vacant following the departure of Patrick Witt last week after his detail expired. Witt did not disclose his next role but said he looked forward to advancing his mission in the private sector.
The letter comes as lawmakers, including Blumenthal, have repeatedly scrutinized Tether over the past year. Last month, Blumenthal released findings of an investigation that described Tether as central to "Iran's shadow banking system" and to the financing of terrorist groups. Tether has disputed these characterizations, saying it assists authorities in identifying bad actors.
According to The Wall Street Journal, which first reported the relationship the prior week, Tether began working with Nxum weeks after Hines took the helm as the White House's top crypto advisor. During Hines' tenure, he played a pivotal role in passing the GENIUS Act, which created the first federal regulatory framework for stablecoins. Tether, the issuer of the world's largest stablecoin, advocated for that legislation and subsequently launched USAT, a U.S.-based version of its flagship stablecoin.
A Tether spokesperson told The Block that the company is aware of the allegations and is reviewing the letter. The spokesperson said external counsel previously conducted an in-depth internal investigation that found no evidence of wrongdoing. Blumenthal asked Tether to produce records of its business dealings with both Nxum and Hines.
Blumenthal also sent a letter to Nxum on Thursday. Harry Jung, the now-former deputy director of the President's Council of Advisors for Digital Assets who worked alongside Hines, is now at Nxum, according to his X account. Leadership at the council is also vacant following the departure of Patrick Witt last week after his detail expired. Witt did not disclose his next role but said he looked forward to advancing his mission in the private sector.
The letter comes as lawmakers, including Blumenthal, have repeatedly scrutinized Tether over the past year. Last month, Blumenthal released findings of an investigation that described Tether as central to "Iran's shadow banking system" and to the financing of terrorist groups. Tether has disputed these characterizations, saying it assists authorities in identifying bad actors.
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