Sen. Richard Blumenthal has asked Tether to provide records on its alleged payments to Nxum, a consulting firm founded by former White House cryptocurrency adviser Bo Hines and Hines’ father, escalating congressional scrutiny of potential conflicts surrounding the passage of U.S. stablecoin legislation.
In letters sent Thursday to Tether and Hines, the Connecticut Democrat sought documents covering the companies’ dealings, payment arrangements, communications, and any work carried out by Nxum for the stablecoin issuer. Blumenthal said reports of a “multimillion-dollar” arrangement raised possible legal and ethical issues under federal lobbying, anticorruption, and ethics rules.
The request follows a report published last week alleging that Tether established a business relationship with Nxum only weeks after Hines began serving as the White House’s top crypto adviser. During his government tenure, Hines worked on efforts to advance the Guiding and Establishing National Innovation for U.S. Stablecoins Act, or GENIUS Act, the law that created a federal framework for stablecoin issuers.
Tether later publicly supported the legislation and introduced USAT, a U.S.-focused version of its flagship dollar-pegged token. Blumenthal’s inquiry places fresh attention on whether work performed by a former administration official’s consulting firm overlapped with policy decisions that could affect one of the largest companies in the stablecoin market.
A Tether spokesperson said the company was reviewing Blumenthal’s letter. The spokesperson added that outside counsel had previously conducted an internal investigation and found no evidence of wrongdoing.
Records request targets Nxum’s Tether work
Blumenthal asked Tether to turn over records relating to payments, contracts, communications, and services involving Nxum, Hines, and other associated people. The letter did not disclose a precise payment total, describing the alleged arrangement only as “multimillion-dollar.”
The senator separately sent Nxum a letter seeking information about the firm’s relationship with Tether. His office cited public information indicating that Harry Jung, a former deputy director of the President’s Council of Advisors for Digital Assets who worked with Hines, is now affiliated with Nxum.
The presence of former digital-assets policy staff at a consultancy serving a major stablecoin issuer is likely to become the focus of the inquiry. Congressional ethics reviews often examine the timing of private-sector relationships, the scope of services performed, and whether former officials used government contacts or nonpublic information after leaving public roles.
Hines’ role in the administration’s stablecoin policy process gives the matter a sharper political edge. The GENIUS Act established requirements intended to bring stablecoin issuers under a clearer federal regime, including standards related to reserve backing and issuer oversight. The implementation timetable for those requirements became a significant issue for companies with large existing token operations.
The material provided does not specify whether Hines personally contacted lawmakers, regulators, or administration officials on Tether’s behalf after his government service. Blumenthal’s request seeks records that could clarify the nature of Nxum’s engagement and whether it involved policy, regulatory, communications, or other consulting work.
Senate scrutiny of Tether has widened
The Nxum inquiry builds on Blumenthal’s earlier scrutiny of Tether, issuer of USDT, the largest stablecoin by circulation. Last month, a Senate inquiry led by Blumenthal said Tether had become central to what it described as “Iran’s shadow banking system” and to financing activity linked to terrorist groups.
According to that congressional inquiry, federal investigators reviewed 846 cryptocurrency wallets previously sanctioned over alleged connections to Iranian proxies. The inquiry found that 84% of those wallets had transacted predominantly in the token now under examination, referring to USDT.
Tether has consistently said it works with law-enforcement agencies and uses blockchain monitoring tools to identify and freeze assets connected to illicit activity when required. The company has argued that the public nature of blockchain transactions makes stablecoins less suitable for criminal use than critics claim, since transfers can be traced and addresses can be blocked.
Blumenthal’s latest letter shifts the immediate focus from sanctions compliance to potential influence and access in Washington. The two issues are politically connected: stablecoin rules now shape reserve requirements, licensing expectations, redemption obligations, and the federal oversight structure that could govern dollar-backed tokens used at global scale.
White House digital-assets council faces turnover
The inquiry arrives as the White House’s digital-assets advisory operation undergoes personnel changes. Patrick Witt departed last week after his government detail expired. Witt said in a post on X that he planned to pursue a role in the private sector, without identifying his next employer.
The departure follows Hines’ move into private consulting and highlights the revolving-door questions that often arise when policy specialists leave government agencies or advisory bodies for businesses affected by the rules they helped shape.
No enforcement action has been announced against Tether, Nxum, Hines, or Jung in connection with Blumenthal’s request. A Senate letter does not itself establish a violation, but it can compel detailed responses and create pressure for companies and former officials to document their relationships.
Tether’s response, and any records it supplies, could determine whether the matter remains a congressional oversight dispute or develops into a broader examination of post-government consulting work in the fast-moving stablecoin sector.
For deeper context on policy debates shaping Tether and other dollar-pegged assets, explore why the GENIUS Act could transform stablecoins.
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