Tether Accused of Facilitating Iran's Shadow Crypto Network
A Senate report has sparked controversy over the use of Tether's ($USDT) stablecoin in Iran's shadow crypto network. The Permanent Subcommittee on Investigations published a 24-page study, dubbed 'Tethered to Terror: Crypto & Iran’s Shadow Banking Network,' which examines 846 distinct crypto addresses linked to Iran or Iranian-backed groups.
The report claims that $USDT is the primary payment rail for Iran's cryptocurrency activities and suggests that it provides a permissive environment due to Tether's slow response in freezing illicit transactions. However, Tether has countered these accusations by highlighting its efforts to combat illicit finance, including the freezing of approximately $550 million worth of $USDT linked to Iranian groups in 2026.
The subcommittee's analysis also notes that Iran-based groups are leveraging various cryptocurrencies, including Bitcoin (BTC), Ether (ETH), TRX, and other altcoins. In contrast, Circle's $USDC stablecoin was found to be limited in the study.