Sen. Richard Blumenthal is demanding records from Tether over reports that the stablecoin issuer paid millions of dollars to a consulting firm founded by Bo Hines, the former White House crypto adviser, and his father.
What happened
Last week, The Wall Street Journal reported that Tether began a business relationship with Nxum, the Hines family consulting firm, just weeks after Hines took over as the White House's top crypto adviser. While in that job, Hines helped pass the GENIUS Act, the first federal regulatory framework for stablecoins. Tether, which issues the world's largest stablecoin, advocated for the law and, through it, launched USAT, a U.S.-based version of its flagship token.
On Thursday, Blumenthal sent letters to both Tether and Nxum. The Connecticut Democrat said the alleged payment "implicates federal ethics, anticorruption, and lobbying laws," and asked Tether to hand over records of its business dealings with Nxum and with Hines.
Tether's response
A Tether spokesperson told The Block the company is reviewing the letter and is aware of the allegations reported in the Journal. External counsel, the spokesperson said, previously conducted an internal investigation that "found no evidence of wrongdoing."
An internal investigation is still an investigation a company commissions into itself, even when outside lawyers run it. That clears nothing on its own.
The revolving door keeps spinning
The personnel moves around this story are almost too tidy. Harry Jung, the 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. Patrick Witt, who left the council last week after his detail expired, posted on X that he looks forward to advancing his mission in the private sector. The council is now without leadership.
My take
I keep coming back to the timeline. Weeks. Tether signed up with the Hines family firm weeks after Hines took the job shaping policy for Tether's industry, while Tether was pushing for the bill Hines was helping move through Congress. Maybe every payment was disclosed and every contact was legal. Blumenthal's letter is a request for records, not an indictment, and nobody has proven anything.
But this is the same Tether that a Blumenthal investigation last month described as central to "Iran's shadow banking system," a claim Tether rejects, saying it helps authorities find bad actors. The company already had a credibility problem in Washington. Paying the family firm of the official writing your rules, right as your bill becomes law, is how a credibility problem turns into a subpoena.
Whether this goes anywhere depends on what the records show. Nobody outside Tether and Nxum knows what those contain. That is rather the point of asking.