Tether Accused of Facilitating Iran's Sanctions Evasion with USDT Stablecoin
A Senate report has accused Tether's USDT stablecoin of facilitating Iran's sanctions evasion. The report, led by Senator Richard Blumenthal, found that 84% of 846 crypto wallets sanctioned over ties to Iran and its regional proxies transacted exclusively or nearly exclusively in USDT.
The investigation analyzed wallets designated by the Treasury's Office of Foreign Assets Control and Israel's National Bureau for Counter Terror Financing between June 2021 and August 2026. It concluded that USDT is a primary illicit international payment system for Iran, allowing the government to move money across its borders and prop up the rial through the Central Bank of Iran.
The report highlighted two sanctioned oil smugglers who moved over $603 million in USDT over four years through a network connected to Hezbollah, the Houthis, and Iranian financial institutions. Blumenthal alleged that Tether failed to freeze wallets designated by counter-terrorism agencies before 2024 and continues to fail to proactively block clearly illicit wallets.
Tether rejected the characterization, stating it had helped freeze nearly $550 million in Iran-linked USDT this year and works with over 340 law-enforcement agencies. CEO Paolo Ardoino said that Tether has consistently demonstrated that USD₮ is not a haven for sanctioned actors or terrorist organizations.