Senate Report Puts Tether at Center of Iran's Financial Network A report released by Democratic staff on the Senate Permanent Subcommittee on Investigations has placed Tether's $USDT stableco
A report released by Democratic staff on the Senate Permanent Subcommittee on Investigations has placed Tether's $USDT stablecoin at the heart of Iran's efforts to sidestep international sanctions. The report argues that Iran and its regional proxies rely on USDT more than any other cryptocurrency to move money around sanctions, based on analysis of 846 wallets that the U.S. Treasury's Office of Foreign Assets Control (OFAC) and Israel's counter-terror financing bureau have sanctioned or targeted for seizure over links to Iran, Hamas, Hezbollah and the Houthis.
The report found that 84% of those wallets transacted exclusively, or nearly exclusively, in USDT. Breaking that down further, the share was 87% for the 757 wallets on Israel's list and 57% for the 101 on OFAC's, counting a wallet when more than 80% of its dollar volume was in USDT.Bitcoin came a distant second on both lists.
The 24-page Senate study found that USDC barely registered compared with USDT, raising fresh questions about how stablecoin issuers police illicit activity.Through its U.S. dollar-pegged stablecoin, Tether has provided access to a high-liquidity and widely accepted international payment system that is otherwise denied to Iran due to international sanctions and counterterrorism financing measures.
Sen. Blumenthal asked Treasury Secretary Scott Bessent and Attorney General Todd Blanche to investigate Tether's anti-money laundering and sanctions compliance, and to confirm by October 9 whether either department had narrowed, paused or closed any earlier inquiry into the company.He referred the findings to Treasury and Justice for possible violations of sanctions and the Bank Secrecy Act.
The Senate report noted that Tether acknowledged receiving an earlier June inquiry from Blumenthal but had not provided a response by the time the September 28 report was published. Tether's public response instead emphasized its cooperation with authorities.
In a company statement, CEO Paolo Ardoino said USDT "is not a haven for sanctioned actors, terrorist organizations or criminal networks," adding that actions involving its stablecoin had supported nearly $550 million in Iran-linked asset freezes during 2026.More than $344 million in USDT was frozen across two wallets in April, followed by over $130 million across four additional wallets in July after OFAC expanded the bank's digital currency identifiers.
Tether said it works with more than 340 agencies across 67 countries and has supported more than 2,800 investigations, with those efforts leading to more than $4.9 billion in assets being frozen.
The preliminary report described USDT as a "significant financial lifeline" within Iran's shadow banking network. It is important to note that the findings represent the conclusions of the subcommittee's Democratic investigators, not a bipartisan finding by the full Senate.
Sources:U.S. Senator Richard Blumenthal: Blumenthal Probes Tether On Its Role in Iranian Shadow BankingUnchained Crypto: Sen. Blumenthal Urges Treasury and DOJ to Investigate Tether Over Iran's Use of USDTCoinDesk: Tether is a 'lifeline' for Iranian regime, Senate Dems say in new report
