Iran Uses Tether's USDT to Bypass Sanctions and Fund Military

A report released by Senate Democrats has found that the Iranian regime is using Tether's digital dollar, USDT, to evade US sanctions and move funds through the global financial system. The investigation analyzed 846 crypto wallets sanctioned or targeted for seizure over links to Iran and regional proxies, finding that 84% transacted exclusively or nearly exclusively in USDT.

According to Senator Richard Blumenthal, Tether is central to Iran's ability to move funds, support its currency, and procure drones and other military equipment. The report raises concerns about Tether's role in enabling illicit financial flows despite US sanctions.

Tether has responded by stating that actions involving USDT have resulted in about $550 million frozen in 2026 in wallets US authorities identified as connected to Iran's central bank and sanctions networks, and that it is cooperating with US and international law enforcement.