Senate Report Exposes Tether's Role in Iranian Proxy Financing
A 28-page Senate report published by Democratic Senator Richard Blumenthal has revealed that the Tether stablecoin USDT is playing a significant role in the Iranian regime's underground financing system. The report states that USDT is a major financing pipeline for groups like Hezbollah, and that it is being used to circumvent sanctions.
The report examined 846 sanctioned crypto wallets targeted for Iranian affiliation and found that 84% exclusively or 'nearly exclusively' transacted in USDT. This suggests that USDT is a crucial component of the Iranian regime's shadow banking network.
One example cited in the report involves Alireza Derakhshan and Arash Estaki Alivand, two sanctioned oil smugglers who transferred over $603 million in USDT within a network linked to Hezbollah and the Houthis. The report also claims that Tether didn't freeze enough Iran-affiliated crypto wallets prior to 2024, inviting abuse.
Tether CEO Paolo Ardoino has responded to the allegations, stating that his company 'has consistently demonstrated that USDT is not a haven for sanctioned actors, terrorist organizations or criminal networks.' The report also raises questions about potential conflicts of interest within the Trump administration, citing Tether's custodial relationship with Cantor Fitzgerald, a firm formerly led by Secretary of Commerce Howard Lutnick.