Tether’s USDT Dominates Iranian-Linked Crypto Wallets: Will Washington Impose Restrictions?

A Senate Democratic staff report found that 84% of 846 sanctioned wallets linked to Iran and associated groups transacted exclusively or nearly exclusively in USDT. The report's findings come as US authorities intensify sanctions enforcement against Iranian crypto infrastructure.

The US already has a mechanism under the GENIUS Act that could restrict foreign stablecoins if issuers fail to comply with lawful orders, though this differs from the EU’s MiCA regime. Tether’s USDT has emerged at the center of a new US sanctions debate after Senate Democratic investigators said the stablecoin dominated crypto wallets linked to Iran and sanctioned groups.

Tether says it actively works with law enforcement, claiming its traceability and ability to freeze wallets can help authorities disrupt illicit finance. In September 2026, the company disclosed that it had supported the freezing of roughly $550 million in USDT across wallets linked by US authorities to Iran’s Central Bank and sanctions networks.