US Senate Report Slams Tether's USDT as Iran's Shadow Banking Lifeline

A report by US Senate Democrats has described Tether's USDT stablecoin as a significant financial pillar for Iran and a tool for financing proxy organizations, including Hezbollah.

The analysis of 846 crypto wallets sanctioned by the US and Israel found that 84% conducted transactions in USDT. The token was used to move funds across borders by the Iranian government and to support the national currency under US sanctions, including through the Central Bank of Iran.

Connecticut Senator Richard Blumenthal led the investigation and called on the US Treasury Department and the Department of Justice to investigate Tether's operations. He stated that Tether and its flagship token had become a central part of Iran's shadow banking system.

Tether responded by stating it was ready to cooperate with US authorities. The company reported that it had supported the freezing of nearly 550 million USDT linked to Iran in 2026. CEO Paolo Ardoino said that USDT is not a haven for sanctioned individuals, terrorist organizations, or criminal networks.