# Blumenthal Seeks Treasury and Justice Investigations Into Tether

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/27118
Published: 2026-10-06T18:55:19.000Z
Updated: 2026-10-06T18:55:19.000Z
Section: Regulation

> A Senate Democratic staff analysis found that 84% of 846 wallets identified by U.S. or Israeli authorities transacted almost entirely in USDT. Tether said actions involving the stablecoin led to about $550 million in …

Sen. Richard Blumenthal asked Treasury and Justice to investigate Tether’s sanctions and anti-money-laundering compliance after a Senate Democratic staff analysis found extensive USDT use among wallets identified by U.S. and Israeli authorities as linked to Iran and regional proxies.

The analysis examined transactions from June 2021 through August 2026 across 846 wallets. It found that 84% transacted exclusively or nearly exclusively in Tether’s dollar-pegged stablecoin, USDT. The analysis defines predominant use as more than 80% of aggregate transaction value in U.S. dollars.

The rates varied between the groups examined: 87% of 757 wallets identified by Israel’s National Bureau for Counter Terror Financing and 57% of 101 wallets designated by the U.S. Treasury’s Office of Foreign Assets Control transacted predominantly in USDT. The figures concern those identified wallets and do not measure all Iran-linked cryptocurrency activity.

The analysis also says sanctioned Iranian oil smugglers Alireza Derakhshan and Arash Estaki Alivand moved more than $603 million in USDT over four years, from 2021 to 2025, through a network connected to Hizballah, the Houthis and Iranian financial institutions.

Blumenthal, ranking member of the Senate Permanent Subcommittee on Investigations, sent letters to Treasury Secretary Scott Bessent and Attorney General Todd Blanche on Sept. 28, 2026. His letter to Bessent requests information by Oct. 9, 2026, including details of any Treasury investigations into Tether. The requests do not establish that either department has opened a new investigation or found that Tether violated the law.

The analysis alleges that Tether did not consistently freeze wallets designated by counterterrorism agencies before 2024 and that some freezes were delayed. Tether says it cooperates with law enforcement. The company said actions involving USDT resulted in approximately $550 million in assets frozen across Iran-linked wallets in 2026, including more than $344 million across two addresses in April and more than $130 million across four wallets in July.

Tether CEO Paolo Ardoino said, “Tether has consistently demonstrated that USD₮ is not a haven for sanctioned actors, terrorist organizations or criminal networks.”