Tether Makes First VC Investment, Pouring $2M in Arcanum’s Web3 Fund

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Ruholamin Haqshanas

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Ruholamin Haqshanas

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Ruholamin Haqshanas is a contributing crypto writer for CryptoNews. He is a crypto and finance journalist with over four years of experience. Ruholamin has been featured in several high-profile crypto...

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December 26, 2024

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Tether, the issuer of the world’s leading stablecoin USDT, has made its first foray into venture capital by investing $2 million in Arcanum Capital’s Arcanum Emerging Technologies Fund II.

The fund is a tokenized investment vehicle focused on supporting decentralized Web3 projects aimed at advancing blockchain-based technologies, including remittances, privacy, and financial inclusion.

The fund aims to enhance cross-border payments, privacy, and banking services for the unbanked, according to a recent press release.

Tether Dirversifies Business Ventures

Tether CEO Paolo Ardoino noted the importance of fostering censorship-resistant systems and open communication, especially in the face of growing geopolitical and financial restrictions.

“In a world increasingly shaped by geopolitical tensions and macroeconomic uncertainty, the need for resilient technology to safeguard our freedoms has never been more crucial,” he said.

The investment is part of Tether’s broader strategy to diversify its business ventures.

Recent moves by Tether include a $45 million crude oil transaction financed using USDT and a proposal for a boron-backed token to the Turkish government, reflecting its efforts to explore new opportunities in tokenized assets.

Tether also introduced the Hadron tokenization platform, enabling businesses and governments to tokenize real-world assets such as securities and stocks.

Furthermore, Tether recently invested $775 million in Rumble, a video-sharing platform known for its free speech ethos. Ardoino cited Rumble’s commitment to uncensored content as a key factor in the decision.

Meanwhile, Rumble’s embrace of cryptocurrency extends beyond Tether’s investment.

On November 25, the platform confirmed plans to add Bitcoin to its balance sheet, with its board approving up to $20 million of the company’s excess cash reserves for Bitcoin purchases.

Cantor Fitzgerald Acquires 5% Stake in Tether

Financial services giant Cantor Fitzgerald has acquired a 5% stake in Tether, the world’s largest stablecoin issuer, in a deal valued at up to $600 million.

The acquisition, which occurred within the past year, positions the firm to potentially leverage political influence through its CEO Howard Lutnick, who was recently appointed as U.S. President-Elect Donald Trump’s Secretary of Commerce.

Cantor Fitzgerald’s involvement with Tether could bolster the stablecoin issuer’s standing amid increasing regulatory scrutiny.

Tether has faced ongoing investigations from the U.S. Attorney’s Office for the Southern District of New York regarding alleged use of its stablecoin, USDT, in illicit activities such as terrorism financing.

Amid these challenges, Lutnick’s political clout may play a pivotal role in navigating regulatory hurdles.

Tether’s largest shareholder, Giancarlo Devasini, reportedly expressed confidence in Lutnick’s ability to “defuse threats facing Tether,” according to sources cited in the WSJ.

Lutnick, who has been working closely with Trump as a transition advisor, is vetting candidates for key government roles, some of which could directly impact oversight of Tether.

He is expected to step down as Cantor Fitzgerald’s CEO upon Senate confirmation of his cabinet position.