Senate Probe Reveals Iran's $7.8 Billion USDT Money Laundering Scheme

A Senate probe has found that Iran's government and affiliated militant groups relied heavily on the stablecoin USDT to move billions of dollars outside American sanctions. The investigation, led by Senator Richard Blumenthal, discovered that Iranian entities used USDT to finance proxy forces such as Hezbollah and purchase materials for weapons programs.

Blockchain analytics firm Chainalysis estimated that Iran's crypto market processed more than $7.78 billion in transactions over the past year, with nearly half of that activity involving wallet addresses linked to the Islamic Revolutionary Guard Corps (IRGC). The IRGC sold oil on the black market, converted the proceeds into USDT, and obscured the origin of the funds.

The report concludes that Tether's USDT has become a key pillar in Iran's shadow banking system, allowing Iranian entities to evade global restrictions. While Tether cooperates with enforcement agencies, the subcommittee questions whether controls on high-volume platforms are sufficient.