Senator Richard Blumenthal, the ranking Democrat on the Senate Permanent Subcommittee on Investigations, has demanded records from Tether regarding multimillion-dollar payments to Nxum, a consulting firm co-founded by Bo Hines, who previously served as executive director of the White House's digital asset advisory council.
On October 22, Blumenthal wrote to Tether CEO Paolo Ardoino, stating that the payments raise concerns about federal ethics, anticorruption, and lobbying laws. According to the senator's letter, Tether agreed in May 2025 to pay Nxum $415,000 per month for strategic lobbying, public relations, and advisory services while Hines retained a one-third ownership stake in the firm.
Payment Structure and Timing
Blumenthal alleged that Tether initially routed payments through Notorious, a marketing company, before transferring funds to Nxum. Direct contracts with the consulting firm began after Hines left government service in August 2025 and joined Tether as head of its US stablecoin initiative.
The senator also cited allegations that Nxum offered the head of Notorious more than $300,000 and a share of future payments in exchange for signing a nondisclosure agreement.
Legislative Context
The controversy centers on the GENIUS Act, which President Donald Trump signed into law in July 2025 to establish a federal framework for dollar-backed stablecoins. Blumenthal alleged that Hines advocated for specific changes to the legislation while his business partners coordinated lobbying with Tether executives, including provisions that would allow foreign stablecoin issuers additional time to meet US regulatory requirements.
Those accommodations held particular commercial significance for Tether because its flagship USDT stablecoin operates through an offshore issuance structure. The legislation created pathways for qualifying foreign issuers to serve US customers and provided a transition period before stricter restrictions would apply.
Investigation Scope
Blumenthal has requested transaction records, cryptocurrency wallet addresses, and communications to establish the purpose of the payment arrangements. His letter also asked Tether to disclose whether it discussed or negotiated a potential 25% ownership stake purchase in Nxum valued at $56 million.
The inquiry has not established that Tether or Hines violated federal law. The subcommittee's Democratic minority issued the requests.
Regulatory Context
The investigation occurs as Tether expands its domestic operations under the regulatory framework that Hines helped develop. In January 2026, Tether launched USA₮, with Anchorage Digital Bank serving as the federally regulated issuer and Cantor Fitzgerald acting as reserve custodian.
On October 21, the Office of the Comptroller of the Currency finalized regulations governing payment stablecoin issuers, including foreign companies operating under the GENIUS Act. The rules take effect January 18, 2027.
