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

Judgment

Tether must now decide how much of its Nxum and Bo Hines records to hand to Sen. Blumenthal, trading the cost of disclosing contract terms and payment details against the risk that withholding invites subpoenas and revives the Iran shadow-banking findings.

Basis

Blumenthal's letter to Tether and Hines says the reported arrangement "implicates federal ethics, anticorruption, and lobbying laws," and asks Tether for records on its dealings with Nxum and with Hines. The trigger was a Wall Street Journal report that Tether began a business relationship with Nxum — a consulting firm started by Hines and his father — weeks after Hines became the White House's top crypto adviser; Hines helped pass the GENIUS Act, which Tether backed and used to launch its U.S. stablecoin USAT. Tether told The Block it is reviewing the letter and that "external counsel previously conducted an in-depth internal investigation into the matter, which found no evidence of wrongdoing." That prior investigation is the mechanism Tether is leaning on: it lets the issuer concede review without conceding the payments. Context raises the stakes — last month Blumenthal released findings that Tether was central to "Iran's shadow banking system," which Tether disputes, and Nxum now employs Harry Jung, formerly deputy director of the President's Council of Advisors for Digital Assets.