US Senator Blumenthal's subcommittee report alleges USDT facilitates Iranian sanctions evasion, referred to Treasury and Justice Department.
DeFi & Yields ·
A Senate subcommittee report alleged that Tether's USDT stablecoin facilitates Iranian sanctions evasion, with the findings referred to the Treasury and Justice Department. The Democratic staff on the Senate Permanent Subcommittee on Investigations examined 846 wallets tied to Iran and its proxies, finding that 84% conducted transactions exclusively or nearly exclusively in USDT. Two sanctioned Iranian oil smugglers moved more than $603 million in the stablecoin between 2021 and 2025 through networks connected to Hizballah, the Houthis, and Iranian financial institutions, with evidence suggesting the same infrastructure was used for military equipment procurement.
The report, titled "Tethered to Terrorism," highlighted that Tether did not consistently freeze wallets designated by counter-terrorism agencies before 2024, with $34.6 million continuing to flow through sanctioned addresses after their designation. The subcommittee noted that Tether has characterized its OFAC compliance as voluntary adherence to guidelines rather than mandatory obligations. Senator Blumenthal questioned the company's anti-money laundering controls and pointed to ties between Tether's largest shareholder, Cantor Fitzgerald, and Commerce Secretary Howard Lutnick's family.
Tether issued a statement citing $550 million in Iran-linked asset freezes this year without directly addressing the subcommittee's findings. The company had not responded to an earlier inquiry from the subcommittee sent in June, according to the report.