Molly White's Citation Needed - Issue 111 – Back the winners

Episode Date: October 16, 2026

A Trump crypto adviser’s firm took millions from Tether while he shaped stablecoin rules in their favor, a Senate probe targets Commerce Secretary Lutnick’s not-so-former firm, and crypto’s biggest super PAC plays it safe. Originally published on October 16, 2026.

I'm Molly White, and you're listening to the audio feed for the Citation Needed Newsletter. You can see the text version of the newsletter online at citation needed.news. Issue 111. Back the winners. A Trump-Crypto-Advisor's firm took millions from tether while he shaped stablecoin rules in their favor. A Senate probe targets Lutnik's not-so-former firm, and Crypto's biggest superpack plays at This issue was originally published on October 16, 26. The Crypto Industries flagship Super PAC, Fershake, has announced the House candidates it plans to back in the midterms. All 32 are incumbents, and all but four are in safe seats, which makes for a convenient way to pad a win rate and then claim it proves the existence of a crypto voter block.

Rather than fighting for competitive seats, the pack has abandoned several reliable allies in the tough races. It seems more focused on rewarding high-ranking allies, such as Financial Services Committee Chair French Hill and Brian Stile, who chairs the House's Digital Assets Subcommittee. Meanwhile, the revolving door between Trump's White House and the crypto industry is spinning so fast it's threatening to fly off its hinges. Patrick Witt, the latest executive director of Trump's Crypto Advisory Council, has left for an as-yet unnamed job in the private sector, leaving the council without a director or deputy, and the crypto industry wondering whether the White House has lost interest. New reporting from the Wall Street Journal outlines how Stablecoin giant Tether cultivated a lucrative business relationship with his predecessor, Bo Hines,

while Hines negotiated the Genius Act Stablecoin law. Tether paid millions to Heinz family consulting firm, then hired him to run its U.S. arm after he stepped down from the advisory role. Tether's other friends in high places are drawing scrutiny, too. A Senate subcommittee is probing the stable coin issuers ties to Cantor Fitzgerald, the firm Commerce Secretary Howard Lutnik supposedly divested from by handing it to his sons. In the White House. Tether, Bo Hines and Nexham. Bo Hines, President Trump's bizarre choice to serve as the first executive director of the Crypto Advisory Council, was among the key architects of the Genius Act, the stablecoin law signed in July 2025.

Heinz's previous qualifications consisted of playing college football, losing two congressional races, and co-owning a small consulting firm called Nexham with his father. He kept his stake in Nexham when he joined the administration. The Wall Street Journal has now reported that weeks after Heinz began working on the Genius Act, his father and their fellow Nexham co-owner Gary Dennis met with Tether's CEO Paolo Arduino. Tether is the largest stablecoin issuer and had the most riding on the legislation. Though Nexum previously had little involvement with the crypto sector, it pitched Tether on a strategic lobbying and PR campaign that has netted Nexum at least $6.3 million to date,

with payments that began while Heinz was still at the White House and were split three ways among the co-owner. The final deal omitted any mention of lobbying and was routed through a separate marketing firm. Meanwhile, Heinz pushed legislators to double the grace period for crypto exchanges to stop offering non-compliant stable coins, a change that primarily benefited Tether. He also remained active in signal chats with his Nekxem partners. When some Republican Congress people stalled the bill, his father informed Dennis he'd gotten a, quote, very worried call from Arduino. and that Tether wanted them to, quote, obliterate the holdouts.

Hines sent the nexum group chat talking points, casting the legislators as, quote, undermining the president, and bought and paid for by Democratic shills like Coinbase and Andrews and Horowitz. When Trump brokered a deal with the holdouts weeks later, Dennis bragged to an associate, quote, Bo got it done. Three weeks after the bill was signed, Heinz left the White House. The following month, he was named CEO of Tether's new U.S. arm. Nexam has only grown more entangled with Tether since.

The consulting firm, which is pitching investors on a deal in which Tether would buy a 25% stake for $56 million, has started branding itself as the, quote, strategic media infrastructure layer behind Tether. It also helped launch the Fellowship Pack, which is chaired by Jesse Spiro, Tether U.S.'s head of government affairs, The PAC is funded almost entirely by Cantor Fitzgerald, an investor in Tether and its primary U.S. financial partner, which was previously run by now Commerce Secretary Howard Lutnik. The PAC has paid NECM more than $6.5 million. Before it launched, Dennis reminded an associate, quote, again, no link to Tether, nexum, Beau. Heinz was succeeded on the Crypto Council by Patrick Witt, whose resume likewise featured college football. and failed congressional bids.

Witt took over negotiations on the Clarity Act Crypto Market Structure Bill, which recently fizzled after falling short of the votes needed for closure. In July, the council's deputy director, Harry Jung, stepped down to join, You guessed it, Neksham. Now, Witt has left his post,

presumably to collect his reward. I look forward to learning who's paying it. His departure adds to you growing nerves in the crypto sector, that the White House is losing interest. David Sacks stepped down from his combined AI and Crypto-Zar role in March, and earlier this month, Trump tapped Jay Clayton to become his AI czar. No Crypto-Zar has been named,

and the Digital Assets Advisory Council is now without a director or deputy director. The Clarity Act is dead, with little hope of being revived after the midterms. If I were among the crypto executives, whose money has fueled more than $250 million, in super PAC election spending since 2024, I might also be a little worry that the administration got what it needed from me and is now moving on to newer, shinier things. Tether, Howard Lutnik, and Cantor Fitzgerald. Heinz isn't the only Trump official whose ties to Tether are drawing scrutiny. The Senate Permanent Subcommittee on Investigations is probing the relationship between the

stable coin firm and financial giant Cantor Fitzger Fitzger. Gerald, which was previously headed by Commerce Secretary Howard Lutnik. Upon his cabinet appointment, Lutnik claimed to have satisfied his ethics requirements by transferring his interest in the firm to a trust benefiting his four children and handing control to two of his sons, a move borrowed from Trump. Like Trump, Lutnik has continued to profit from the family business. His 2025 financial disclosure reported a $192 million distribution from the firm. Nor does he seem to have stepped away from it. In April, when the Cantor-funded Fellowship Pact disclosed plans to spend $1.75 million

back in Ken Paxton and the Texas Senate primary runoff, senior Republican officials called Lutnik to complain. The PAC quietly dropped the ad three days later. An October 8th letter from PSI ranking member Richard Blumenthal to Cantor Chal chairman and CEO Brandon Letnik, disclosed that the subcommittee is investigating Cantor Fitzgerald's relationship with Tether and its connections to the Trump regime. Canter took a 5% stake in the stable coin issuer in 2024, and according to Blumenthal, quote, since the president's return to office, canter Fitzgerald's 5% stake in tether has increased in value from $600 million to an estimated $10 billion, in addition to the tens of millions of dollars the company collects every year

from the assets it holds for tether. The letter raises concerns about tether's use by illicit actors, including Iran's shadow banking system, and about Cantor's close ties to Lutnik and the rest of the Trump administration. Blumenthal requested information on Cantor Fitzgerald's due diligence on Tether's reserves and anti-money laundering programs, the terms of a loan from Tether to Howard Lundell. Lettnick that may have financed his transfer of the business to his children, and copies of any communications by Secretary Lettnik involving regulatory matters or with other White House advisors. In Regulators.

The Independent Community Bankers of America has sued the Office of the Comptroller of the Currency over its recent rulemaking and its spree of National Trust Bank charters. At least 13 of the 21 charters granted by the OCC under Trump have gone to cripple. firms, including Circle, Ripple, and the Trump family's own World Liberty Financial. While the National Trust Bank framework is intended to let firms hold assets on clients' behalf without the more stringent oversight applied to traditional banks that take deposits and lend them out, the community banks argue that the OCC has overstepped its authority and turned the regime into a backdoor for crypto companies to get the perks of a bank charter without

the rules. The suit singles out Protago, which, one conditional approval for a trust charter despite plans to offer crypto custody, trading, lending, and asset management services. The OCC's expansion, quote, creates a gaping hole in regulation, the trade group writes, letting crypto firms perform many of the same functions as community banks, quote, while evading the fundamental safeguards, obligations, and oversight of those banks. Their customers don't receive the protections of deposit insurance, the separation of banking and commerce or limits on dealings with risky investments like hedge funds. And because the national charter's preempt state law, they lose some state consumer protections. Many won't realize it.

Quote, customers will reasonably assume that a company having national bank in its title is an insured depository institution. There's also very little precedent for what will happen if one of these firms fails. Quote, the OCC has not managed an uninsured bank receivership in nearly 100 years, the lawsuit points out. Warning that, quote, failures of risky uninsured national trust banks could spread instability throughout the nation's financial system, including by spreading contagion risks to other traditional banks like community banks. The suit also echoes some of the same arguments raised by community banks during the Clarity Act negotiations, that crypto firms, freed from much of the regulatory burden banks carry,

will siphon deposits away from community banks and reduce their capacity to lend. ICBA president and CEO Rebecca Romero Rainey said in a statement that, quote, Congress did not create the National Trust Charter as a side door into the banking system for crypto firms seeking the credibility of a federal bank charter. But crypto firms have previously balked at complaints from traditional banks. Last spring, Coinbase's then-Chief legal officer Paul Greywall accused that, the ICBA of protectionism, writing, quote, imagine opposing a regulated trust charter because you prefer crypto to stay unregulated. In elections and political influence. The crypto industry's

flagship super PAC, Fairshake, has announced a list of 32 House candidates it plans to back in the midterms. All of them are incumbents, 13 are Democrats and 19 are Republicans. All but four are in races dubbed safe for them by the Cook Political Report. PAC spokesperson Jeff Vedder gave the game away when he bragged to the hill, quote, we've won 53 of the 57 races we engaged in this cycle. As I've noted previously, the Cryptopax and advocacy groups often support shoe-in candidates, so they can later claim that their win rate reflects some silent majority of Americans who support the so-called crypto agenda.

Similarly, when Coinbase-Link stand with crypto endorsed 39 candidates in 2024, the Hill estimated, prior to Election Day, that 32 of them had a 75% or higher chance of winning. Out of their list, the Fair Shake Network has so far spent the most on Republicans Bill Heisinga of Michigan, where they spent $1.5 million, and French Hill of Arkansas, where they spent $1.4 million. It is spent around $1 million apiece supporting Brian Stile, a Republican from Wisconsin, Janelle Bynum, a Democrat from Oregon, Derek Tran, a Democrat from California, and Stephen Horstford, a Democrat from Nevada, and $512,000 each on Josh Gottheimer, a Democrat from New Jersey, and Pete Aguilar, a Democrat of California. Most of the other endorsed candidates have so far received around $75,000 each from the network. Some of the biggest checks went to members who chair the committees with jurisdiction over crypto, including Hill on financial services and style on the Digital Asset Subcommittee.

Conspicuously missing are several reliable crypto allies in tougher races, including Democrats Don Davis of North Carolina and Shamari Figures of Alabama, and Republicans Zach Nunn of Iowa and Mike Lawler of New York. Fairshake spent more than $2 million each on Davis and figures in 2024 and $1 million on none. It didn't back Lawler. None and Lawler have, however, received smaller amounts of support this cycle from Andresden Horowitz, one at Fairshake's biggest backers, through donations by several executives to a crypto-themed joint fundraising committee called Hodel the Line. Trump Business Interests Trump has announced yet another Trump meme coin gala dinner for November, following the inaugural event in May 2025 and a second one in April 26.

Each has generated less excitement than the last. The meme coin price continues to erode. The previous pricey events offered little more than bragging rights, mediocre food, and subpar company, and the organizers continue to pare back access to Trump himself, after drawing criticism over pay for access to the president. While these events are intended to juice the token's price, which has already plummeted more than 95% from its highs,

they have become increasingly ineffective, producing shorter and less dramatic price spikes. Kevin Mercury, former spokesperson for Bill Zanker, who runs the Trump meme coin and related portions of Trump's personal business empire, criticized the event, calling the gala, quote, tone-deaf. while, quote, the nation is embroiled in a dead-end war and facing a widespread affordability crisis. Trump personally pocketed more than $635 million from the meme coin during the 2025 fiscal year, as nearly all of the roughly 1 million retail traders lost money, a combined $3.8 billion.

The fine print in the website now includes a disclaimer that the existence of events like the gala, quote, does not indicate that Fight, Fight, Fight, LLC, CIC Digital LLC, or their respective affiliates are not contemporaneously disposing of Trump coins. The Trump Mimukoin website is also now teasing plans to invite the top 18 holders of the token to watch the Super Bowl from a, quote, private luxury suite, and enjoy a, quote, three-day VIP experience, including dinners and in, quote, elite after party. The fine print is careful to note that, quote, President Donald J. Trump will not be in attendance in the suite. The plan is part of the Trump Coin Club membership scheme launched in April, which is so far held one event in which holders were invited to a Formula One race and, quote, epic music festival in Singapore.

In the courts, Richard Hart. Richard Hart, the founder of the Hex cryptocurrency scheme, managed to spend nearly two years, such as a court. subject to an Interpol Red notice, before authorities finally nabbed him in Turkey. The U.S. SEC sued Hart in 2023, noting that asking people to, quote, sacrifice, rather than invest, their crypto assets in exchange for his pulse chain and hex tokens, was not the get-out-of-security law's free card he seemed to think it was. The lawsuit further alleged he had misappropriated at least $12 million to buy sports cars, luxury watches, and the largest black diamonds. in the world. Then, in September 2024, he was accused by Finnish authorities of evading several

hundred million euros in taxes and was named as a suspect in a brutal physical assault on a 16-year-old perpetrated in February 2021. At Finland's request, Hart was added to the EU's most wanted list and an Interpol red notice was issued. Turkish police have now arrested Hart and his wife in Istanbul, While a report from Turkish media outlet, the Daily Saba claims that Hart was wanted by Interpol on crypto fraud charges, the Red Notice only lists a charge of aggravated tax fraud. Though Hart is certainly facing serious criminal consequences internationally, his U.S. regulatory woes have eased. In February 2025, a federal judge dismissed the SEC's lawsuit against Hart, finding the agency hadn't adequately established that Hart had sufficient ties to the U.S.

US. Hart thanked Trump for the outcome. Neither Trump nor his gutted SEC had anything to do with that ruling, but Hart may have had something to thank them for later on. In April 2025, the agency declined to amend its complaint to address the jurisdictional issues, effectively abandoning the case as it had so many others against crypto firms. Everything else. A jury has convicted Jonathan Spiletta, the man who repeatedly exploited the uranium finance DeFi crypto exchange to steal more than $53 million, which he then used to buy

Magic the Gathering in Pokemon cards, antique Roman coins, and a scrap of fabric from the original Wright Brothers airplane that was later taken by Neil Armstrong to the surface of the moon. While Spiletta and his lawyers attempted the classic Coda's law defense, it

probably did not help his case that the government was able to produce a message from Spoletta, in which he wrote quote, I did a crypto heist of $1.5 million a couple of weeks ago. There was a bug in a smart contract and I exploited it. Crypto is all fake internet money anyway. In prediction markets. As New Jersey petitions the Supreme Court to take up the issue of whether state gambling laws

should apply to prediction markets, it's found a new ally in the National Football League. The NFL filed an amicus brief urging the court to take up the case, arguing that sports contracts and prediction markets create new risk rather than hedge existing risk, and therefore should be regulated by state gambling commissions. They detail their complaints around Calci's refusal to comply with their requests to ban bets that are easily manipulated, those involving injuries or referees, and those whose outcomes can be known in advance. They also note that Calci's platform allows participants who are 18 or older, despite many state gambling laws that restrict betting to 21 and older. Unlike Major League Baseball and the National Hockey League, which have signed sponsorship

or trademark deals with prediction markets, the NFL has been more hesitant. NFL games have drawn huge volumes on prediction markets, with the league's games accounting for $1.8 billion of the $3.3 billion in total prediction market volume on the first Sunday of the most recent NFL season. According to their brief, this is all the more reason for the NFL to worry. about the emergence of such platforms, which they say undermine efforts to protect betters, ensure wages are fair, and limit threats to the integrity of the games themselves. Daniel Wallach, a gaming lawyer who focuses on sports betting, said that the NFL's encouragement, quote, meaningfully increases the chances the Supreme Court will hear the case.

He added, quote, it is extremely telling that the Sports League, which has most forcefully advocated for federal regulation, is essentially saying, This ain't it. The Web 3 is going just great recap. There were seven entries between September 30th and October 15th. 86 million dollars was added to the grift counter. The Blur NFT marketplace will shut down. At least $86 million was stolen via tampered ledger hardware wallets

resold by Cryptobillis. The Pudgy Penguins Company shuts down its abstract blockchain after losing eight figures running it. Blur shut down its blast blockchain. Portia shut down its NFT project with the floor price down 96%. Near Intense was exploited for $3.8 million but recovered all assets. And Abra-Kadabra has proposed winding down after a string of hacks years ago left each $1 stable coin token backed by $4.4 in reserves. That's all for now, folks. Until next time, this has been Molly White.

Thanks for listening to this issue of the citation needed newsletter. If you would like to support my work with a free or pay what you want subscription to the citation needed newsletter, or if you would like to receive these issues in your email, go to citation needed.news. If you enjoyed the podcast version of this episode, please consider leaving a rating or review in your podcast player of choice.