Senate Report Links Tether USDT to Iranian Sanctions Evasion
A U.S. Senate subcommittee report alleges Iran uses Tether's USDT stablecoin to fund terrorist proxies and bypass sanctions, prompting calls for federal investigations.
A report from the U.S. Senate Permanent Subcommittee on Investigations alleges that the Iranian government uses Tether Limited's USDT stablecoin as a central component of its shadow banking system. Led by Senator Richard Blumenthal, the investigation analyzed 846 sanctioned cryptocurrency wallets and found that 84% transacted exclusively or nearly exclusively in USDT. The report claims the token serves as a financial lifeline for Iran to fund regional proxies, including Hezbollah and the Houthis, and to finance drone and missile programs.
The findings further link Iranian USDT usage to a $1.5 billion North Korean hack of the Bybit exchange, intended to support the Iranian rial and maintain oil sales to China. Senator Blumenthal has referred the findings to the U.S. Justice and Treasury Departments, calling for investigations into potential sanctions violations. This follows the Treasury Department's Operation Economic Outcast, which targets cryptocurrency transactions amid a U.S. military campaign against Iran.
In response, Tether Limited CEO Paolo Ardoino denied that the stablecoin is a haven for sanctioned actors. He stated that the company cooperates with global law enforcement and has frozen over $4.9 billion in assets total. Specifically, the company announced it helped authorities freeze nearly $550 million in Iran-linked USDT in 2026, including $344 million tied to the Central Bank of the Islamic Republic of Iran in April.
