Tether's USDT Faces Scrutiny Over Links to Sanctioned Iranian Wallets

A report by Democratic investigators from the Senate Permanent Subcommittee on Investigations has put Tether's anti-money laundering (AML) and sanctions compliance under scrutiny.

The investigation found that 84% of 846 sanctioned or flagged crypto wallets linked to Iran transacted almost exclusively in USDT, a stablecoin issued by Tether. The report, titled 'Tethered to Terrorism,' claims USDT is a significant financial lifeline for Iran's shadow banking network.

The investigation analyzed over five years of blockchain records and reviewed 846 wallets linked to Iran and other regional proxy groups. It found that Alireza Derakhshan and Arash Estaki Alivand, two sanctioned Iranian nationals, received $603 million in USDT between 2021 and 2025 from addresses later sanctioned by the Office of Foreign Assets Control.

Tether has disputed the report's findings, stating it helped freeze $550 million in assets linked to Iran. The company claims it works directly with various agencies, including OFAC, the Justice Department, FBI, Secret Service, Homeland Security, and others.