Tether – An extraordinary power game between Wall Street, the White House, and the crypto market

Author: Chloe, ChainCatcher

Currently, Bitcoin (BTC) is trading at $90.79K. Meanwhile, Tether is conducting a series of financial transactions that have surprised asset managers and the public market with the company’s business strategy.

Tether earns $15 billion in profit this year, with a 99% profit margin

First, it is important to recognize that Tether is no longer just a stablecoin issuer. Its operational scope includes: cryptocurrency payment systems, digital asset lending services, mining operations management, AI technology investments, brain-machine interfaces, media platform management, and recently, an attempt to acquire the Italian football club Juventus.

According to Nate Geraci, President of The ETF Store: “While U.S. lawmakers are still debating whether to allow stablecoins to generate yields, the reality is that Tether will generate $15 billion in profit this year, with an impressive profit margin of up to 99%.” This raises a profound question: does this enormous capital truly create value for the crypto community, or is it merely a tool for private leaders to privatize assets and control power?

Merger with Rumble, asset separation of Peak Mining: “Left hand gives to right hand” strategy

To better understand how Tether operates, we need to examine the recent transaction of its subsidiary Northern Data.

Northern Data has announced the sale of its Bitcoin (Peak Mining) mining division for $200 million. Interestingly, the three companies acquiring Peak Mining are Highland Group Mining, Appalachian Energy, and 2750418 Alberta ULC, all controlled by co-founder Giancarlo Devasini and Tether CEO Paolo Ardoino.

This is not a typical transaction. With Tether holding approximately 54% of Northern Data shares and the two entities having financial ties through a €610 million loan, any asset exchange is essentially a related-party transaction (related-party transaction). However, Northern Data is listed on the German secondary market with looser regulations, so the company is not required to disclose the identities of buyers or record related transactions.

Nevertheless, global regulatory responsibilities mandate disclosure. Just weeks after the transaction was completed, through corporate filings in the Virgin Islands, the U.S., and Canada, the market learned the true identities of the buyers.

The timing of the transaction is also intriguing: Peak Mining was sold just days before Rumble announced its acquisition of Northern Data for $760 million. Notably, Tether also holds nearly 48% of Rumble’s shares. Some experts suggest that Tether deliberately separated the mining division (namely Peak Mining—highly volatile) to make Northern Data a purely AI cloud computing service provider, helping the company achieve a higher market valuation and reduce risks during the merger.

Throughout this process, the €610 million loan served as a financial coordination tool. According to the plan, in Rumble’s acquisition deal, this loan will be restructured: half will be paid to Tether in the form of shares, and the remaining half will be converted into a new loan for Rumble, secured by Northern Data’s assets.

This layered financial structure creates a closed-loop ecosystem of internal capital flow among the parent company, the acquired entities, and businesses controlled by leadership, while allowing leaders to transfer mining assets into personal names and maintain overall control.

The intricate relationship between Tether, Cantor Fitzgerald, and the White House

Beyond internal transactions, the connection between Tether and Wall Street investment bank Cantor Fitzgerald raises bigger questions.

Howard Lutnick, CEO of Cantor, has been nominated and confirmed as U.S. Secretary of Commerce. This development has raised concerns within the legal community.

The Tether-Lutnick link began in 2021, when Tether transferred tens of billions of U.S. Treasury bonds to support USDT managed by Cantor. This move aimed to allay doubts about reserve transparency and position Lutnick as Tether’s most credible advocate within the traditional financial system.

According to The Wall Street Journal (November last year), Lutnick personally negotiated for Cantor to receive about 5% of Tether’s shares, worth $600 million. However, amid criticism from Senator Elizabeth Warren (who has long suspected Tether as a tool for funding criminal activities, and considering that a future Secretary of Commerce has interests in Tether), Lutnick clarified that Cantor owns “convertible bonds” rather than direct equity.

However, these convertible bonds essentially give the holder the right to convert into shares in the future—an ownership right with deferred effect, potentially enabling actual control when necessary.

During a hearing, Lutnick pledged that upon assuming the role of Secretary of Commerce, he would require stablecoin issuers to undergo more independent audits and fall under U.S. law enforcement oversight. Nonetheless, financial experts warn that Lutnick will lead a department with enormous influence over the financial industry while maintaining interests in a controversial company.

Conclusion: A closed power ecosystem

Through these movements, Tether has built a closed business ecosystem: from separating Peak Mining’s assets, merging with Rumble, to establishing deep connections with Wall Street and the White House. Each seemingly independent decision is part of an overarching power structure. This framework allows private leaders to privatize core assets while bringing Tether closer to U.S. centers of power. With a profit of $15 billion, Tether is leveraging its financial strength to shape a broader power landscape, and whether this serves the public interest or only benefits internal elites remains an unanswered question.