Senate Democrat probes Tether payments to Bo Hines' firm

Allegations of improper payments and lobbying

The Wall Street Journal reported that Tether struck a deal in May 2025 to pay a marketing firm named Notorious $415,000 a month. The firm passed most of the initial payment to a wallet used by Nxum to be split three ways, resulting in Nxum earning $6.3 million.

Blumenthal alleged in his letter that the payment structure suggests Tether “was likely well aware of the illegality and impropriety” of paying a sitting official. He further stated that the business relationship indicates Tether knew the impropriety of issuing payments to a current White House official with a direct role in shaping cryptocurrency legislation.

The subcommittee also requested information regarding a Nxum pitch deck reported by the Wall Street Journal, which claimed Tether would purchase a 25% stake in the firm for $56 million.

Bo Hines' transition from White House to Tether

Bo Hines was the executive director of the President’s Council of Advisers on Digital Assets from January to August 2025. He was a key architect of the GENIUS Act, which was signed into law in July 2025.

Hines departed the White House on August 9, 2025. The following month, he joined Tether as a “strategic adviser” before later becoming the CEO of Tether US.

During his tenure in government, Hines maintained a one-third stake in the firm Nxum.

Evidence of lobbying and legislative influence

The Wall Street Journal reported that Hines urged lawmakers to double the GENIUS Act’s compliance window from 18 to 36 months, a change that primarily benefited Tether. Messages reviewed by the Wall Street Journal showed Hines sharing talking points about Republican holdouts with Nxum partners.

A message from his father and co-owner Todd Hines stated: “They want us to obliterate these members that are fighting crypto”.

Senator Richard Blumenthal alleged that while Hines failed to divest his one-third stake in Nxum, he worked closely via encrypted messaging applications to coordinate lobbying, advocacy, and “browbeating” of members of Congress opposed to stablecoin legislation.

Blumenthal said that messages also demonstrate that Tether directly coordinated Nxum’s lobbying efforts on the GENIUS Act. In these communications, Tether CEO Paolo Ardoino demanded that Nxum “obliterate” the legislation’s opponents.

Tether and Nxum's response to allegations

A representative for Nxum stated that Hines was not involved in the Tether deal while serving in government. The representative added that Hines “did not receive any Tether-derived funds during that period”.

Tether said that external counsel previously conducted an “in-depth internal investigation into the matter”. That investigation “found no evidence of wrongdoing”.

Broader scrutiny of crypto ties and administration officials

On October 8, 2026, Blumenthal requested records from Cantor Fitzgerald regarding its relationship with Tether. Cantor Fitzgerald serves as Tether’s reserve custodian and is a 5% shareholder in the company. The firm is chaired by the son of Commerce Secretary Howard Lutnick.

A report titled “Tethered to Terrorism” by Blumenthal’s staff found that 84% of 846 cryptocurrency wallets targeted for seizure due to links to Iran transacted in Tether’s USDT. Harry Jung, a former crypto adviser in the Trump administration, left his government role in July 2026 and became a managing director at Nxum in August.

Donald Trump and members of his administration face scrutiny regarding financial gains from crypto policies. The president disclosed earning $1.4 billion from crypto-related investments in 2025.

Political context and upcoming election impact

Blumenthal has limited authority as the Democratic ranking member of the Senate Permanent Subcommittee on Investigations. The 2026 midterm elections could shift party control in the House and Senate, providing Democrats with additional power to investigate the administration’s ties to the crypto industry.

Prediction-market platforms Kalshi and Polymarket favor Democrats retaking majority control of both chambers in 2027. Kalshi puts the chance of Democrats taking the House at 92% and the Senate at 68%. US Election Day occurs on November 3.