Tether, the issuer behind the largest U.S. dollar-pegged stablecoin, is under increasing scrutiny in Washington after reports linked millions of dollars in payments to a consulting firm co-founded by Bo Hines. Hines played a significant role shaping stablecoin legislation while serving in the White House.
Senate probe targets Tether’s payments and ties to Nxum
Senator Richard Blumenthal, Democrat of Connecticut and the top Democrat on the Senate Permanent Subcommittee on Investigations, has demanded that Tether share records concerning its business relationship with Bo Hines and Nxum, the consulting company Hines helped establish. Blumenthal requested the information in a letter to Tether CEO Paolo Ardoino, giving the firm until November 3 to respond.
A Wall Street Journal investigation indicated that Nxum earned $6.3 million from a deal Tether executed in May 2025. Initially, Tether paid $415,000 monthly to marketing agency Notorious, which reportedly forwarded most of the first installment to a wallet controlled by Nxum and divided the funds among three partners. Subsequent payments reportedly went straight to Nxum after Hines stepped down from his government role in August 2025.
Bo Hines previously served as executive director of President Donald Trump’s Presidential Council of Advisers for Digital Assets. He became CEO of Tether’s U.S. operations after leaving the White House.
The Journal further detailed internal messages suggesting Hines remained active within Nxum during his government tenure. According to the report, Hines advocated for an extension to the GENIUS Act’s compliance window, which ultimately favored Tether’s interests, while his father, Nxum co-owner Todd Hines, discussed targeting lawmakers critical of digital assets.
A Nxum spokesperson denied Hines participated in the Tether agreement while in government and maintained he received no funds derived from Tether during that time.
Tether acknowledged the Wall Street Journal’s allegations in a statement, emphasizing that external counsel previously conducted a thorough review and found no sign of misconduct. Blumenthal countered these assertions by stating the structure of payments suggested Tether could have been aware of “illegality and impropriety,” potentially violating federal ethics, anticorruption, and lobbying laws.
Tether stated that its external counsel “previously conducted an in-depth internal investigation into the matter, which found no evidence of wrongdoing.” A spokesperson for Nxum said that Hines did not receive any Tether-related funds during his time in government and was not involved in the deal.
Blumenthal also raised concerns about a Nxum pitch to Tether, reported by the Journal, that outlined a possible purchase of a 25% stake in the consulting firm for $56 million.
Mini dictionary: Nxum is a consulting firm co-founded by Bo Hines and Todd Hines. The company has reportedly been involved in advisory services related to digital assets and legislative matters.
Tether’s role in sanctioned crypto activity draws further scrutiny
Parallel to the payment probe, Senator Blumenthal released a report by Senate Democratic staff noting that of 846 cryptocurrency wallets sanctioned or flagged for seizure due to suspected ties to Iran or its regional allies, 84% processed transactions exclusively or almost entirely in Tether’s USDT stablecoin.
The report, titled “Tethered to Terrorism,” references blockchain analysis of wallets named by the U.S. Treasury’s Office of Foreign Assets Control. Blumenthal argued that these findings point to Tether’s utility in circumventing international sanctions on Iran. Tether responded to these concerns by noting it had frozen approximately $550 million in Iran-linked wallets, with $344 million frozen as recently as April.
| Number of wallets | Linked to Iran | Used USDT almost exclusively |
|---|---|---|
| 846 | Sanctioned or seized | 84% |
Blumenthal has also sought information from Cantor Fitzgerald, Tether’s reserve custodian and a 5% shareholder, concerning its relationship with Tether. This followed reports that Cantor Fitzgerald’s chair, Howard Lutnick, defended Tether at his Senate confirmation hearing, and that Senators Elizabeth Warren and Ron Wyden questioned Lutnick about a Tether loan to a trust for his children.
These parallel investigations highlight growing concerns about Tether’s financial and regulatory practices amid its central role in the global stablecoin market.
