Senate Report Links Tether's USDT to $2 Billion Iran Sanctions Evasion Scheme

A Senate Democrats report has accused Tether's USDT stablecoin of being a key tool in Iran's sanctions evasion, citing an estimated $2 billion in transactions by the Iranian government last year.

The Permanent Subcommittee on Investigations' report found that 87% of 757 wallets connected to Iranian terrorism financing predominantly transacted in USDT. The investigators said Tether failed to consistently freeze wallets connected to sanctioned or illicit activity, sometimes responding to requests from authorities but not always blacklisting suspicious wallets.

Tether CEO Paolo Ardoino disputed the report's broader conclusions, stating that USD₮ is not a haven for sanctioned actors and that public blockchains provide authorities with transaction visibility. He added that Tether had supported the freezing of nearly $550 million in Iran-linked USDT over the past year and had worked with law enforcement agencies globally.

The investigation highlights one of the central risks facing major stablecoin issuers: regulators increasingly view compliance infrastructure as a core part of market credibility.