Howard Lutnick, a billionaire banker poised to run the Department of Commerce, has deep ties to the crypto industry. But he hasn't committed to recusing himself from Donald Trump's crypto task force that will develop policies on digital assets.
Lutnick is the longtime head of Cantor Fitzgerald, an investment bank that serves Tether, a crypto platform with the most widely used stablecoin in the world. The Wall Street Journal reported last October that the federal government is investigating whether Tether's digital token has been used by third parties to fund illegal activities such as the drug trade, terrorism and hacking.
Cantor has around 5% ownership of Tether, valued at $600 million, the Wall Street Journal reported. Lutnick testified at his U.S. Senate confirmation hearing that Cantor's investment in Tether is in the form of a convertible bond.
In response to Democrats questioning whether this presents a conflict with his position on Trump's crypto task force, Lutnick said, "I will follow applicable government ethics laws and regulations based on guidance from the Ethics Office of the Department of Commerce," Politico reported.
His nomination as commerce secretary cleared a Senate committee on Wednesday and is headed to the full chamber for a vote.
Lutnick is the latest in Trump's super-rich administration to face questions about financial and business entanglements that could conflict with their government roles.
Federal law prohibits executive branch officials, with the exception of the president and vice-president, from taking actions that could financially benefit themselves or their families.
Lutnick has agreed to divest from his business interests and step down from his positions at Cantor Fitzgerald and two other financial firms, BGC Group and Newmark Group. CBS News reported. He has not said whether he would recuse himself from Trump's crypto task force, Politico reported.
He will still have a wide array of holdings even after stepping down from the businesses. If confirmed as commerce secretary, Lutnick will need to recuse himself — at least initially — from participating in certain matters involving 106 different corporate entities, according to The New York Times.
It would be the largest number of refusal requirements imposed on a member of Trump's cabinet, which has combined assets worth at least $1.5 billion, per The Times.
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