U.S. Commerce Secretary and Others Suspected of Advancing the Genius Act in Favor of Tether, Reports Say

Key Points of This Article

• Bloomberg points out the suspicion of collusion with Tether.
• Tether denies any inappropriate involvement.

Suspicion of Influence on Certain Conditions of the Genius Act

U.S. Commerce Secretary Howard Latnick and former White House cryptocurrency council head Bo Hines are suspected of having influenced parts of the Genius Act to weaken it and benefit Tether, the largest stablecoin issuer. Bloomberg reported this on the 23rd, citing interviews and court documents.

Initially, from 2023 to 2024, Senators Cynthia Lummis and Kirsten Gillibrand aimed to impose strict anti-money laundering measures on stablecoin issuers based outside the U.S., like Tether, in a bipartisan effort.

However, Latnick, who was then the CEO of Cantor Fitzgerald, which manages Tether's reserves, lobbied against this. According to court documents related to a separate business dispute between Tether and a third party (Swan Bitcoin), Tether's chairman reportedly told stakeholders that Latnick effectively blocked this bill.

As a result, the anti-money laundering proposal initially suggested by Lummis and others did not pass. The Genius Act allows the U.S. Secretary of the Treasury to regulate a stablecoin under the foreign jurisdiction if it is determined that the regulatory framework of the issuing country is equivalent to that of the U.S.

Although the Genius Act was enacted, as of the time of writing, its final implementation rules are still incomplete. The proposed anti-money laundering regulations have been presented by the Federal Deposit Insurance Corporation (FDIC), which is currently soliciting public comments until August 4.

Final rules for reciprocity regulations for foreign issuers have not yet been established.

Regarding Hines, it is reported that while he was the head of the Trump administration's cryptocurrency council, he insisted on a three-year grace period desired by Tether instead of the 18-month compliance grace period proposed by the Democrats.

The compliance period refers to the grace period during which intermediaries, such as exchanges, are allowed to continue handling unapproved stablecoins like USDT within the U.S. Ultimately, the Genius Act established a three-year grace period.

Benefits Received from Tether and Rebuttals to Reports

After the Genius Act was enacted, in August of last year, Tether hired Hines as an advisor and promoted him to CEO of its new U.S. product "USAT."

In April 2024, Tether sold a $600 million convertible bond, granting a 5% equity stake to Latnick's financial services company. According to the previously cited court documents, Tether's chairman mentioned to business associates that this price was "ridiculously low."

Additionally, in October 2025, Tether is providing loans to trusts that will benefit Latnick's children when they acquire their father's multi-billion dollar business interests.

On the other hand, a spokesperson for the Commerce Department commented that Latnick has adhered to the ethical agreement's provisions and has recused himself from matters that could present a conflict of interest, asserting that he has had no involvement in the stablecoin-related aspects of the Genius Act.

Tether also strongly denies allegations of inappropriate engagement with policymakers, claiming to have engaged transparently and legally with regulators, lawmakers, and law enforcement agencies, alongside other companies.

They further rebutted that the Genius Act does not provide Tether with any special advantages but is a framework applicable to the entire industry.

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