Sen. Blumenthal seeks answers from Tether over payments to firm founded by ex-White House crypto adviser

Sen. Richard Blumenthal said he wants answers from Tether following reports that the stablecoin issuer paid millions of dollars to a consulting firm started by former White House crypto adviser Bo Hines and his father amid negotiations to pass stablecoin legislation into law.

The Connecticut Democrat said that relationship raised legal and ethical concerns, in a letter sent to Tether and Hines.

"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," Blumenthal said on Thursday.

Last week, The Wall Street Journal reported that Tether had started a business relationship with Nxum — a consulting firm started by Bo Hines and his father — weeks after Hines took the helm as the White House's top crypto advisor. During Hines' time at the White House, he played a pivotal role in passing the Guiding and Establishing National Innovation for U.S. Stablecoins, or GENIUS Act, which created the first federal regulatory framework for stablecoins. 

Tether, which issues the world's largest stablecoin, became an advocate for the GENIUS Act and, through it, launched the U.S.-based version of its flagship stablecoin, called USAT.

A Tether spokesperson told The Block that the company is reviewing the letter. "Tether is aware of the allegations reported in The Wall Street Journal that form the basis of Senator Blumenthal’s letter," the spokesperson said. "External counsel previously conducted an in-depth internal investigation into the matter, which found no evidence of wrongdoing."

Lawmakers, including Blumenthal, have repeatedly scrutinized Tether over the past year. Last month, Blumenthal released findings of an investigation that found that Tether had become central in "Iran's shadow banking system" and the financing activities of terrorist groups. Tether has pushed back and said it helps authorities find bad actors. 

In Blumenthal's latest letter, he asked Tether to provide records involving the stablecoin issuer's business dealings with Nxum as well as with Hines. 

Leadership at the council is also absent now following the departure of Patrick Witt last week after his detail expired.