USDT Used for Iranian Sanctions Evasion, Report Claims

A new report from Senator Richard Blumenthal's office claims that Tether's USDT stablecoin is being used by Iran and its proxies to evade sanctions. The report, titled 'Tethered to Terrorism,' analyzed 846 cryptocurrency wallets sanctioned or targeted for seizure over links to Iran and its regional proxies.

The analysis found that 84% of the wallets transacted exclusively or nearly exclusively in USDT, with 87% of those designated by Israel's National Bureau for Counter Terror Financing using the stablecoin. The report also found that two sanctioned Iranian oil smugglers moved over $603 million in USDT between 2021 and 2025 through a network that reached Hizballah, the Houthis, and Iranian financial institutions.

Tether has released a statement citing $550 million of Iran-linked freezes this year, but did not address the report's findings. Senator Blumenthal has written to Treasury Secretary Scott Bessent and Attorney General Todd Blanche asking for an investigation into Tether's anti-money laundering and sanctions compliance.