Tether's Sanctions-Evasion Role Exposed by Senate Report

Tether's dollar-pegged token USDT has become Iran's preferred way to move money around U.S. sanctions, according to a report by Sen. Richard Blumenthal's minority staff.

The report, 'Tethered to Terrorism: Crypto & Iran's Shadow Banking Network,' claims that Tether aids sanctions evaders and money launderers, a charge the company has faced before.

Blumenthal is asking the Treasury Department and Justice Department to investigate Tether's sanctions and anti-money-laundering compliance after publishing his findings. The report concerns wallets sanctioned by Israel's National Bureau for Counter Terror Financing or the U.S. Treasury Department's Office of Foreign Assets Control between 2021 and 2026.

Of those, 84% transacted exclusively or nearly exclusively in USDT, according to the subcommittee's analysis. Tether froze five of the wallets flagged by Israel but left 34 active for nine more months, allowing over $34.6 million to flow through before they were shut down.

Tether has defended its asset freezing practices, saying it acts when provided with credible information from law enforcement and has frozen nearly $550 million in Iran-linked assets this year alone.