● Covered by 1 source · 1 reportMedium impact1 negative
Senate Report Alleges Iran Uses Tether's USDT to Evade Sanctions
Key points
- Senate report links Iran to Tether's USDT for sanctions evasion.
- 84% of sanctioned crypto wallets used USDT exclusively or almost exclusively.
- Report alleges Tether failed to consistently freeze illicit wallets before 2024.
- Tether states it froze $550 million in USDT linked to Iran this year.
Senate Report Findings
A report from the Senate Permanent Subcommittee on Investigations (PSI), led by Sen. Richard Blumenthal, alleges that Iran is using Tether's USDT stablecoin to circumvent international sanctions. The report describes USDT as a "significant financial lifeline" within Iran's "shadow banking network," facilitating international payments and funding for terrorist proxy organizations.
The subcommittee examined 846 sanctioned cryptocurrency wallets linked to Iran and its regional proxies. It found that 84 percent of these wallets used USDT, a stablecoin pegged to the US dollar, either exclusively or almost exclusively to transfer funds and support Iran's currency.
Allegations of Illicit Activity and Tether's Response
The report claims that this shadow banking network not only supports terrorist groups but also facilitates the purchase and sale of military equipment, including drones. It further states that prior to 2024, Tether did not "comprehensively and consistently freeze" crypto wallets flagged by counter-terrorism agencies and continues to fail at proactively blocking illicit wallets.
Sen. Blumenthal called on the Justice and Treasury departments to investigate Tether for potential sanctions violations. In response, Tether stated its commitment to combating illicit finance, noting it has helped freeze nearly $550 million in USDT linked to Iran this year. Tether CEO Paolo Ardoino asserted that USDT is not a haven for sanctioned actors and that public blockchains offer authorities visibility into fund movements.
Context and Broader Implications
The report highlights ongoing concerns about the use of cryptocurrencies in evading sanctions and funding illicit activities. This development follows earlier reports that the Justice Department initiated an investigation into whether Binance violated sanctions. The Senate's findings underscore the challenges regulators face in monitoring and controlling financial flows within the cryptocurrency ecosystem.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
A US Senate report claims Iran utilizes Tether's USDT stablecoin as a "significant financial lifeline" for its shadow banking network, enabling it to bypass sanctions and fund proxy organizations. The report criticizes Tether for not consistently freezing flagged wallets, while Tether states it has frozen $550 million in USDT linked to Iran this year and cooperates with law enforcement.