Tether Accused of Helping Iran Evade Sanctions with USDT

A US Senate report has accused Tether's USDT of playing a central role in Iran's informal financial networks and fundraising activity, helping the country evade sanctions and finance terrorism. The report analyzed 846 crypto wallets linked to Iran that were subject to sanctions or blocking measures.

The investigation found that 87% of 757 wallets classified as being involved in Iran-linked terrorist financing primarily transacted in USDT, citing its broad use on Iranian crypto exchanges and greater liquidity than other stablecoins. Tether repeatedly failed to freeze wallets tied to illicit financial activity, the report claimed.

Senate investigators argued that Tether's anti-money-laundering obligations have not been adequately overseen due to personnel and business ties to the Trump administration. Commerce Secretary Howard Lutnick previously served as chief executive officer of Cantor Fitzgerald, which handles custody work for Tether, while Bo Hines, the former executive director of the White House crypto council, now serves as chief executive officer of Tether's U.S. entity.

Tether pushed back in a statement, saying it had helped freeze about $550 million of USDT linked to Iran over the past year and that public blockchains allow money flows to be tracked more transparently than cash. However, the report raises the possibility of broader congressional scrutiny of Iran's use of crypto and stablecoin issuers' obligations to comply with sanctions.