Trump nominates Secretary of Commerce: How legendary is Howard Lutnick, who manages half of the USDT reserves?

OdailyNews
2024-11-20 16:40:29
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Trump ignited the first fire in the crypto circle through his new team.

Author: jk, Odaily Planet Daily

On November 19, local time in the United States, Donald Trump, the incoming president, announced new cabinet nominations: he nominated Howard Lutnick, CEO of Cantor Fitzgerald, as the new Secretary of Commerce. Previously, he was one of the candidates for Secretary of the Treasury (with a 9% election probability in the relevant pool on Polymarket yesterday).

In the statement, Trump said that Lutnick would lead all matters related to tariffs and trade in the United States. As for the role of Secretary of Commerce, he will oversee all major responsibilities of the Department of Commerce: funding new chip factories, implementing trade restrictions, releasing economic data, and even monitoring the weather. He is also one of the co-chairs of Trump's transition team, tasked with filling about 4,000 government positions before the presidential inauguration.

According to procedural rules and past experience, it will take an additional 2 to 4 months for background checks and Senate voting confirmations from the time of presidential nomination to final appointment.

The most relevant aspect of this matter to the crypto world is that Howard Lutnick's Cantor Fitzgerald manages more than half of the reserves behind Tether. (Odaily previously reported that Tether's $39 billion USDT reserves (U.S. Treasury bonds) are managed by Wall Street bond trading giant Cantor Fitzgerald. Tether reported earlier this week that its assets amounted to $67 billion by the end of 2022. Tether has also become the "unstoppable cornerstone of the crypto world" due to its leading market share in stablecoins.)

So, how strong is Howard Lutnick's background? What is his relationship with Trump and Musk? What statements or initiatives has he made regarding the crypto industry? Odaily Planet Daily will recount the story of Howard Lutnick in this article.

Orphan, Young CEO, 9/11 Survivor

Howard Lutnick's early life was not happy.

He was born on July 14, 1961, in Jericho, Long Island, as the second of three siblings, in a family that practiced Judaism. His father was a history professor at a university, and his mother was a painter and sculptor. Unfortunately, his parents both died of cancer when he was around 18 years old, leaving the family with a significant amount of debt. At that time, Howard was just a freshman in college and had to start dealing with lawyers to properly arrange the debts left by his father; without the full scholarship provided by his college, Haverford College (a prestigious liberal arts college in the U.S.), he might not have been able to complete his studies.

In 1983, Howard Lutnick graduated from Haverford with a degree in economics and immediately joined Cantor Fitzgerald.

Founded in 1945, Cantor Fitzgerald is a financial services company focused on institutional equity, fixed income sales and trading, and also involved in consulting, asset management services, gaming technology, and e-commerce, with over 5,000 institutional clients.

Through a series of profitable trades, he won the favor of the company and quickly established a strong mentor relationship with the company's founder, Bernard Cantor. Howard later described his rise by saying, "The first time I helped him make $100 million, he liked me; the second time I made $100 million, he fell in love with me; the third time I made $100 million— we became family."

In 1991, Howard was appointed president and CEO of the company. At that time, he was only 29 years old.

Howard Lutnick's early photo. Source: Youtube

However, Cantor Fitzgerald's office was located on the 105th floor of the North Tower of the World Trade Center. On the day of the 9/11 attacks, Howard was dropping his son off at preschool and was late because of it; but as he rushed to the office, he saw the Twin Towers billowing with thick smoke. His brother, Gary Lutnick, and 658 of Cantor Fitzgerald's 960 employees perished in that day's terrorist attack.

We can only speculate how Howard faced this tragedy afterward, gleaning some clues from interviews. According to The Economist, in the following three years, he "cried almost every day," even tearing up during numerous television interviews. Initially, the media expressed sympathy and praised him, but a few days later, they began to harshly criticize him for not providing salaries to the families of the deceased employees, calling him heartless, hypocritical, and sensationalist. He insisted he had no choice: "It's just a math problem… the company simply had no money." In the following five years, he donated about a quarter of what remained of the employees' salaries to the victims' families' fund. Over time, the company revived. He said his employees "stitched his soul back together."

Fortunately, in 1999, Howard pushed for the IPO of Cantor Fitzgerald's electronic trading subsidiary, eSpeed. This electronic trading system did not require brokers, which was one of the key reasons Cantor Fitzgerald survived after the 9/11 attacks. Due to the loss of many employees, they were forced to adopt electronic trading, replacing the traditional operations of the Treasury bond market.

According to the Associated Press, in 2013, Cantor Fitzgerald reached a $135 million settlement with American Airlines and insurance companies over lawsuits related to death and personal injury. Howard stated at the time, "We can never, and will never, view this event as 'ordinary.' For us, there is no way to describe this settlement with words like 'ordinary,' 'fair,' or 'reasonable.' All we can say is that this matter has legally come to an end."

Trump mentioned this tragedy when nominating Howard Lutnick as Secretary of Commerce, calling him "the embodiment of resilience in the face of unspeakable tragedy."

Musk Supports His Appointment as Secretary of the Treasury, but He Became Secretary of Commerce

As a billionaire, his statements often lean towards traditional American blue-collar workers. During his campaign, Trump proposed imposing a 60% tariff on Chinese imports and a maximum 20% tariff on all other U.S. imports. Howard explicitly supported this plan in a September interview with CNBC, stating, "Tariffs are a great tool for the president to use— we need to protect American workers."

He is also a staunch supporter of the MAGA movement. Howard was one of the main fundraisers for Trump's 2020 and 2024 presidential campaigns. He hosted fundraising events at his Manhattan home and publicly supported Trump's policies.

In October 2024, Lutnick spoke at a Trump rally at Madison Square Garden, emphasizing the strong performance of the U.S. economy in 1900 and advocating for the restoration of high tariffs and no income tax policies. Howard claimed he missed the era in America when there was no income tax.

In 2022, he pushed for the IPO of the right-wing video platform Rumble, providing a platform for public figures rejected by mainstream tech giants to voice their opinions. "This is a return to free speech on the internet," he said. "We just want the America we are growing into."

Previously, billionaire Elon Musk and others in Trump's circle called for Trump to abandon the original popular candidate for Secretary of the Treasury, Scott Bessent, and instead support Howard. Musk stated in a post, "Bessent is a 'status quo' choice, while Howard Lutnick will truly drive change."

However, ultimately Howard Lutnick did not become Secretary of the Treasury but was nominated as Secretary of Commerce. (Further reading: "Focusing on the U.S. Treasury Secretary Nomination, Can the Crypto Industry Welcome a New Ally?")

Howard Lutnick's Comments on Crypto

Howard Lutnick and his company's relationship and support for crypto are substantial. In a podcast interview with CNBC last year, he stated, "I am a supporter of cryptocurrency, but I am very clear: Bitcoin is just Bitcoin. Other tokens are not worth mentioning." He also added, "I am a strong supporter of a stablecoin called Tether."

Previously, he stated at a Bitcoin conference, "Bitcoin is like gold and should be freely traded anywhere in the world. As the largest wholesaler globally, we will do everything we can to achieve this goal. Bitcoin should be traded globally without exception or restriction, just like gold."

According to Coindesk, his company is not only the manager of Tether's reserves but also jointly handles U.S. Treasury bond trading; Cantor Fitzgerald recently announced a Bitcoin financing business, planning to provide leverage for Bitcoin investors, with initial funding of up to $2 billion.

In a recent post on X, Howard said, "Thank you, President Trump, for trusting me to help achieve the goal of 'Making America Great Again.' As the next Secretary of Commerce, I will join the best government team in American history to fully unleash our economic potential!"

Source: X

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