Iran Uses Tether's Stablecoin to Dodge Sanctions and Fund Proxies

The US Treasury Department has identified a loophole that Iran uses to evade sanctions and fund proxy terrorist organizations, including Hezbollah. According to a Senate report, Tehran relies on Tether's dollar-pegged cryptocurrency, USDT, to circumvent the US sanctions regime.

The report, authored by Democratic Sen. Richard Blumenthal, found that 84% of crypto wallets sanctioned by the US and Israeli governments for ties to Iran conducted transactions almost exclusively in USDT. This is a major concern as USDT accounts for about 60% of the stablecoin market.

Tether has been criticized for not moving quickly enough to freeze USDT held in wallets under sanctions, allowing Iran to continue using it to fund its regional proxies and carry out human rights abuses. However, some evidence suggests that Iran may be reconsidering its use of USDT, with its reliance on the stablecoin declining.