Senator Blumenthal probes Tether payments to Bo Hines' consulting firm Nxum
In brief
- Senator Richard Blumenthal sent letters Thursday to Tether and Nxum Group, the consulting firm Bo Hines co-founded.
- The Wall Street Journal reported Nxum received large Tether payments while Hines advised the White House.
- Tether said an external counsel investigation previously found no evidence of wrongdoing.
- Kalshi gave Democrats a 69% chance of retaking the Senate, per CoinDesk.
What the letters ask
Blumenthal requested details of the business arrangements between Tether and Nxum, a firm Hines started with his father and another partner. The letters follow a Wall Street Journal report from the prior week, which said Nxum received large payments for consulting work for Tether while Hines was still advising President Donald Trump's administration on crypto policy.
In a letter to Tether CEO Paolo Ardoino, Blumenthal wrote that the terms and nature of Tether's relationship with Nxum and Hines raised ethical and legal concerns.
"The highly unusual terms and nature of Tether’s business relationship with both Nxum and Bo Hines raise alarming ethical and legal concerns, indicating that Tether was likely well aware of the illegality and impropriety of issuing payments to a current White House official with such a direct role in shaping cryptocurrency legislation that was instrumental to its business"
Tether said in a statement that it's aware of the Journal's allegations behind the letter, and that external counsel had previously conducted an internal investigation that found no evidence of wrongdoing.
The wider Hines picture
CoinDesk previously reported that Hines' company was earning millions of dollars as the main campaign-advertising provider for a political action committee associated with Tether. That was despite the firm having (in CoinDesk's words) little track record or experience in politics. Nxum has also recently hired Harry Jung, another former White House crypto adviser. The White House crypto advisory office itself is now vacant after Patrick Witt, who'd replaced Hines as executive director, departed.
Blumenthal's crypto focus
This isn't Blumenthal's first run at Tether.
He previously issued a report on Tether's financial connections to Iran, and he's demanded answers about its connection to Cantor Fitzgerald. He's also focused on Trump's memecoin and crypto backers of the president's projects, among other crypto matters. Ardoino criticized the senator's work that week, saying Blumenthal ignored important information and shared his report with the press before giving the company a chance to respond.
The subcommittee seat matters here. If Blumenthal returned to chair the investigations subcommittee, he'd gain significantly greater subpoena and agenda-setting powers, and prediction market Kalshi gave Democrats a 69% chance of retaking the Senate at the time of CoinDesk's reporting.
Frequently asked questions
Why is Senator Blumenthal looking into Tether's payments to Nxum?
The Wall Street Journal reported that Nxum, a firm owned by Bo Hines, received large payments for consulting work for Tether while Hines was still advising the Trump administration on crypto policy. Blumenthal sent letters to Tether and Nxum asking for details of those arrangements.
How has Tether responded to Blumenthal's letter?
Tether said in a statement that it was aware of the Wall Street Journal allegations behind the letter. The company said external counsel had previously conducted an internal investigation into the matter and found no evidence of wrongdoing.
