Howard Lutnick, Donald Trump’s nominee for commerce secretary, has said that stablecoins, including Tether, should get an audit from a United States firm.
Senator Maria Cantwell (D-WA) asked Lutnick to clarify regulations that would ensure that stablecoins were adequately reserved. Lutnick responded that he believes audits and holding treasuries as collateral are adequate to ensure this.
Lutnick’s firm, Cantor Fitzgerald (from which he intends to divest if nominated), owns a convertible bond from and holds substantial reserves for Tether, the world’s largest stablecoin. Tether has promised since 2014 that it will complete a financial audit; over a decade later, it still hasn’t successfully completed that process.
Read more: Pro-Tether Trump nominee Howard Lutnick to divest Deribit trading broker
Tether has also lied repeatedly about the quality and quantity of its backing, and its former general counsel has previously insisted that the upcoming audit would start with the 2018 fiscal year, during which Tether engaged in a series of related party transactions and misrepresented its reserves to the public.
Despite Tether never completing an audit, Lutnick has previously insisted that he’s confident that Tether has the reserves it promises.
Protos reached out to Tether for comment on Lutnick’s opinion, but it didn’t immediately respond.
Lutnick also insisted during the hearing that federal agencies using artificial intelligence will be able to put a stop to blockchain-based crime, including the use of USDT to fund human trafficking, fraud, and sanctions evasion.
This prediction seems unreasonably optimistic considering the scale of blockchain-based infractions and the limitations of blockchain tracing and artificial intelligence.
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