Every seemingly independent business decision made by Tether is actually interconnected within the same power structure.
Article by: Chloe
Article source: ChainCatcher
Recently, Tether's controlling 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 has also sparked strong market scrutiny regarding transactions involving Tether's related parties.
Tether's asset transfers are complex, employing a typical "left-hand to right-hand" trading strategy.
According to corporate registration documents in the British Virgin Islands, the United States, and Canada, the three companies that acquired 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. Both names are listed on the board of directors of Highland Group, while Devasini serves as the sole director of Alberta. The identity of the controller of Appalachian Energy is not publicly disclosed.
Given that Tether itself holds approximately 54% of Northern Data's shares and the two companies have engaged in €610 million in financing transactions, their financial ties are exceptionally close. In this context, the sale of significant assets to a company controlled by Tether's senior management effectively constitutes a related-party transaction.
However, Northern Data is currently listed on a less regulated secondary market in Germany, where disclosure requirements are far lower than on the primary market. Therefore, the company was not required to disclose the buyer's identity or label the transaction as a related-party transaction when it sold. The true identities of these acquiring entities only became clear several weeks after the transaction was completed, through corporate filings in the British Virgin Islands, the United States, and Canada.
Furthermore, the timing of the transaction is also highly questionable. The sale of Peak Mining occurred just days before video platform Rumble announced its $760 million acquisition of Northern Data, and Tether happens to hold nearly 48% of Rumble's shares.
This move is seen as Tether deliberately divesting its highly volatile mining division on the eve of the acquisition, allowing Northern Data to be integrated into Rumble as a more singular AI cloud computing provider, thereby achieving a higher market valuation and reducing acquisition risk.
In this complex asset transfer process, the €610 million loan that Tether previously provided to Northern Data became the core conduit. In the Rumble acquisition, this loan will be reallocated, with half being repaid by Rumble to Tether in the form of stock, and the other half being converted into a new loan to Rumble, secured by Northern Data's assets.
This layered financial design creates an internal self-circulating ecosystem of funds among the holding company, the acquired company, and the companies controlled by senior executives. It also allows Tether's senior executives to further consolidate their control over the overall structure while transferring mining assets to their private names.
Tether has a delicate relationship with Wall Street and the U.S. cabinet.
Beyond internal asset allocation, Tether's relationship with Wall Street investment bank Cantor Fitzgerald is equally complex. This has intensified market and judicial scrutiny, especially after Cantor CEO Howard Lutnick was nominated and confirmed as U.S. Commerce Secretary. Tether's alliance with Lutnick dates back to 2021, when, to quell market concerns about reserve transparency, Tether entrusted hundreds of billions of dollars in U.S. Treasury bonds backing USDT to Cantor, making Lutnick Tether's most important credible guarantor within the traditional financial system.
Lutnick was personally involved in negotiating the investment agreement, which was originally expected to give Cantor approximately 5% of Tether's equity, worth up to $600 million. This deal drew strong criticism from Senator Elizabeth Warren, who stated that Tether has long been seen as a tool for financial crimes, and that the fact that the head of its primary custodian would also head the Department of Commerce poses a serious risk of conflict of interest.
Faced with overwhelming criticism, Lutnick clarified the details of his partnership with Tether at the hearing, stating that Cantor's final investment would take the form of "convertible bonds" rather than direct equity, and asserting that it does not currently hold direct equity. The financial community generally believes that these convertible bonds grant Cantor the right to convert debt into equity in the future, essentially representing a delayed ownership interest, and potentially allowing the holder to exercise substantial control if necessary.
Even though Lutnick stated at the hearing that issuers should not be held responsible for the products being used by criminals, he also pledged that, as Secretary of Commerce, he would require stablecoin issuers to undergo more independent audits and be subject to monitoring by U.S. law enforcement. It can be said that after Lutnick officially took over the Department of Commerce, Tether's relationship with Wall Street and the U.S. cabinet became even more complex and unpredictable.
Tether raked in $15 billion in profits this year, with a profit margin as high as 99%.
Furthermore, Tether's business empire has long since expanded far beyond its role as a stablecoin issuer. From crypto payments and digital asset lending to mining ventures, from AI robots and brain-computer interfaces to media platform investments, and even its recent attempt to acquire Italian football club Juventus.
Nate Geraci, president of The ETF Store, once said, "While U.S. politicians are debating whether stablecoins should be allowed to pay interest, it's worth reminding you that Tether will rake in $15 billion in profits this year with an interest rate as high as 99%."
Is the capital accumulated from such high profits creating value for the crypto industry, or is it building a closed wealth circulation system for the top management?
With its asset divestiture of Northern Data, mergers and acquisitions of Rumble, and its relationship with Wall Street, Tether appears to have built a closed and powerful business ecosystem. While ensuring the privatization of its core assets by its top executives, it has also propelled its empire to the core of American power by bringing in traditional financial giants and high-ranking U.S. cabinet members.
Every seemingly independent business decision made by Tether is actually interconnected within the same power structure.
