Senate Probe Links Tether’s USDT to Iran’s Shadow Banking
An investigation found that 87% of 757 wallets tied to Iranian terrorist-financing activity primarily used USDT.
A Senate investigation led by Sen. Richard Blumenthal links Tether’s USDT to Iran’s shadow banking network, saying the dollar-pegged stablecoin has become a major channel for sanctions evasion and illicit payments.
Democratic investigators analyzed 846 cryptocurrency wallets sanctioned, blocked or seized over connections to Iran and its regional proxies. Of the 757 wallets tied to Iranian terrorist-financing activity, 87% primarily used USDT.
The report says the network has supported efforts to move funds into and out of Iran, support the country’s currency and procure drones and other military equipment. Blumenthal asked the Treasury and Justice departments to investigate whether Tether violated sanctions or banking laws and whether it adequately blocked illicit wallets.
Tether said Sept. 28 that actions involving USDT led to approximately $550 million being frozen in 2026 across wallets identified by U.S. authorities as connected to Iran’s Central Bank and Iranian sanctions networks. The company cited freezes of more than $344 million across two addresses in April and more than $130 million across four wallets in July.
The findings raise questions about Tether’s compliance practices, but do not establish that the company violated U.S. law.
