Tether's USDT Tied to Iran's Shadow Banking System, Senate Report Finds

A Senate report released by Senator Richard Blumenthal found that Tether's USDT stablecoin played a significant role in Iran's shadow banking system, with 84% of 846 sanctioned wallets linked to Iran and its proxies transacting exclusively or nearly exclusively in USDT.

The report, which analyzed wallet-level data, revealed that prior to 2024, Tether did not comprehensively freeze designated wallets, creating a permissive environment for sanctioned actors to continue transacting.

Blumenthal also highlighted the ownership structure of Tether, noting that Cantor Fitzgerald, connected to Commerce Secretary Howard Lutnick, owns a 5% stake in the company and holds a substantial portion of its U.S. assets.

The report's findings have sparked concerns about the potential use of USDT as a financial weapon against American interests, with Blumenthal stating that 'the prospect of such a financial weapon being used against American interests is deeply troubling'.