- Democratic staff on the Senate Permanent Subcommittee on Investigations said 84% of 846 Iran-linked sanctioned wallets transacted almost entirely in USDT.
- Sen. Richard Blumenthal asked Treasury Secretary Scott Bessent and Attorney General Todd Blanche to investigate Tether’s sanctions and AML controls.
- Tether said actions involving USDT froze about $550 million in Iran-linked assets in 2026, including more than $344 million in April.
Tether’s dollar-pegged stablecoin has become a “significant financial lifeline” inside Iran’s sanctions-evasion networks, according to a 28-page staff report released Monday by Democrats on the Senate Permanent Subcommittee on Investigations.
Investigators reviewed 846 wallets sanctioned or targeted for seizure by the U.S. Treasury’s Office of Foreign Assets Control and Israel’s National Bureau for Counter Terror Financing over ties to Iran and regional groups including Hamas, Hezbollah and the Houthis. The report found that 84% of those wallets transacted exclusively or nearly exclusively in USDT, with the share rising to 87% among the 757 addresses on Israel’s list and 57% among the 101 OFAC designations.
In a statement, Sen. Richard Blumenthal, the subcommittee’s ranking Democrat, said the findings “expose how Tether and its flagship token have become central to Iran’s shadow banking system, allowing the Iranian government to fund its regional proxies, commit human rights abuses, and pursue hostile drone and missile programs as they defy our sanctions regime.” He referred the report to Treasury Secretary Scott Bessent and Attorney General Todd Blanche and asked both departments to examine Tether’s anti-money laundering and sanctions practices.
The report also said two sanctioned Iranian oil traders, Alireza Derakhshan and Arash Estaki Alivand, moved more than $603 million in USDT between 2021 and 2025. Staff argued Tether’s wallet freezes have been uneven, citing cases in which funds continued to move after public designations.
Tether pushed back the same day. In a company statement, CEO Paolo Ardoino said, “Tether has consistently demonstrated that USD® is not a haven for sanctioned actors, terrorist organizations or criminal networks.” Tether said actions involving USDT froze about $550 million in Iran-linked assets in 2026, including more than $344 million across two addresses in April after information from OFAC and U.S. law enforcement, and more than $130 million across four wallets in July. The issuer said it has supported more than 2,900 investigations globally and helped freeze more than $4.9 billion in assets overall.
USDT remains the world’s largest dollar-backed stablecoin. The clash lands as the Treasury Department expands Iran-related sanctions work, including last month’s Operation Economic Outcast, which listed digital assets among sectors under heightened scrutiny. Whether Treasury or DOJ opens a formal inquiry into Tether is not yet public.
