Every seemingly independent business decision made by Tether is actually interconnected under the same power structure.
Article author: Chloe
Source: ChainCatcher
Recently, Tether's subsidiary Northern Data announced the sale of its bitcoin mining division, Peak Mining, for $200 million. This transaction not only reflects the complex relationships within Tether's power structure but also raises strong doubts in the market regarding Tether's related-party transactions.
The asset flow of Tether is intricate, typical of a 'left hand exchanges with the right hand' trading strategy.
According to the corporate registration documents of the British Virgin Islands, the United States, and Canada, the three companies acquiring Peak Mining are Highland Group Mining, Appalachian Energy, and 2750418 Alberta ULC. The actual controllers behind them are Tether co-founder Giancarlo Devasini and CEO Paolo Ardoino. The board list of Highland Group includes the names of both individuals, while Alberta is solely represented by Devasini as a director, and the identity of the controller of Appalachian Energy has not been disclosed.
Due to Tether holding about 54% of Northern Data's shares and having a financing relationship of €610 million, the financial ties are exceptionally close. Against this backdrop, selling significant assets to a company controlled by Tether's higher-ups has essentially constituted a related party transaction.
However, Northern Data is currently listed on a secondary market in Germany with relatively loose regulations, where disclosure requirements are far lower than those of primary markets. Therefore, the company does not need to publicly disclose the identity of the buyers during the sale, nor must it label the transaction as a related party transaction. The true identities of these acquiring entities only became clear weeks after the transaction was completed, through corporate filings in the British Virgin Islands, the U.S., and Canada.
Additionally, the timing of the transaction has also been questioned. The sale of Peak Mining occurred just days before the video platform Rumble announced its acquisition of Northern Data for $760 million, and Tether coincidentally holds nearly 48% of Rumble's shares.
This move is seen as Tether intentionally divesting its high-volatility mining sector on the eve of the merger, allowing Northern Data to be integrated into Rumble with a more singular identity as an AI cloud computing provider, to achieve a higher market valuation and lower acquisition risks.
In this complex process of asset circulation, the €610 million loan that Tether previously provided to Northern Data became a core scheduling tool. In the Rumble merger case, this loan will be reconfigured, with half being repaid to Tether in stock form by Rumble, and the other half converting into a new loan to Rumble, secured by Northern Data's assets.
This layered financial design has created an internal ecosystem of self-circulating funds among holding companies, acquired entities, and enterprises controlled by high-level individuals, further solidifying Tether's control over the overall structure while transferring mining assets into private ownership.
The relationship between Tether, Wall Street, and the U.S. Cabinet is delicate.
In addition to internal asset scheduling, Tether's relationship with Wall Street investment bank Cantor Fitzgerald is also complex. Especially after Cantor CEO Howard Lutnick was nominated and confirmed as U.S. Secretary of Commerce, both the market and the judiciary have scrutinized this matter more strictly. The alliance between Tether and Howard Lutnick can be traced back to 2021, when Tether transferred hundreds of billions of dollars in U.S. Treasury bonds supporting USDT to Cantor for custody in order to quell market concerns about reserve transparency, with Howard Lutnick acting as Tether's most important credibility endorsers in the traditional financial system.
Lutnick personally participated in the negotiation of the investment agreement, which was originally expected to allow Cantor to acquire about 5% of Tether's shares, valued at up to $600 million. This transaction has drawn strong criticism from Senator Elizabeth Warren, who stated that Tether has long been viewed as a tool involved in financial crimes, while the head of its main asset custodian is set to take charge of the Department of Commerce, representing a serious conflict of interest risk.
In the face of overwhelming skepticism, Lutnick clarified the details of the cooperation with Tether during the hearing, stating that Cantor's final investment form is 'convertible bonds' rather than direct equity, asserting that it does not currently hold equity directly. In this regard, the financial community generally believes that these convertible bonds grant Cantor the right to convert the debt into equity in the future, essentially a delayed ownership interest that may even allow the holder to exercise substantial control when necessary.
Even though Lutnick stated at the hearing that issuers should not be held responsible for their products being used by criminals, he also promised that as Secretary of Commerce, he would require stablecoin issuers to undergo more independent audits and be included under the supervision of U.S. law enforcement agencies. It can be said that after Lutnick officially took charge of the Department of Commerce, Tether's relationship with Wall Street and the U.S. Cabinet has become even more inscrutable.
Tether has achieved a profit of $15 billion this year, with a profit margin of 99%.
Moreover, Tether's business landscape has long exceeded the positioning of a stablecoin issuer. From crypto payments and digital asset lending to mining layouts, from AI robots and brain-computer interfaces to media platform investments, and even a recent attempt to acquire the Italian football club Juventus.
Nate Geraci, president of The ETF Store, stated: 'While U.S. politicians debate whether stablecoins should be allowed to pay interest, it's worth noting that Tether will achieve a profit of $15 billion this year, with an interest rate as high as 99%.
The capital accumulated from such high profits raises the question of whether it is creating value for the crypto industry or constructing a closed wealth cycle for internal executives.
The asset divestiture of Northern Data, Rumble's merger integration, and its relationship with Wall Street suggest that Tether has constructed a closed and powerful business ecosystem, ensuring the privatization of its core assets while pushing its empire into the heart of American power through traditional financial giants and high-level members of the U.S. Cabinet.
Every seemingly independent business decision made by Tether is, in fact, interconnected within the same power structure.
