Senate Report Links Tether Stablecoin to Iranian Sanctions Evasion

The U.S. Senate Permanent Subcommittee on Investigations released a report detailing how the Iranian government uses Tether's USDT stablecoin to bypass U.S. sanctions and maintain a shadow banking system. Led by Senator Richard Blumenthal, the investigation analyzed 846 sanctioned wallets and found that 84% transacted exclusively or nearly exclusively in USDT.

The report asserts that the stablecoin serves as a financial lifeline for the Iranian government and the Central Bank of the Islamic Republic of Iran, facilitating the funding of regional proxies such as Hezbollah, as well as drone and missile programs. Investigators also linked some of the funds to a $1.5 billion North Korean hack of the Bybit exchange, which was allegedly used to prop up the Iranian rial and support oil sales to China.

Tether CEO Paolo Ardoino denied that the token is a haven for sanctioned actors, noting that the company has cooperated with the U.S. government and froze nearly $550 million in Iran-linked USDT in 2026. The findings come amid Operation Economic Outcast, a U.S. Treasury Department initiative targeting cryptocurrency transactions. The Subcommittee has referred its findings to the U.S. Justice and Treasury Departments for further investigation.