Senate Report Links Tether to Iran Sanctions Evasion

A report released Sept. 28 by the Senate Permanent Subcommittee on Investigations identified Tether’s USDT stablecoin as a primary payment system for Iran’s illicit international transactions.

The report examined 846 wallets designated by the U.S. Treasury’s Office of Foreign Assets Control and Israel’s National Bureau for Counter Terror Financing between June 2021 and August 2026. It found that 84% of the wallets used USDT exclusively or almost exclusively.

Investigators reported that USDT enabled Iranian authorities and affiliated groups to transfer funds across borders and support the rial through Iran’s central bank. Two sanctioned Iranian oil smugglers, Alireza Derakhshan and Arash Estaki Alivand, moved more than $603 million in USDT over four years through a network linked to Hezbollah, the Houthis and Iranian financial institutions, according to the report.

Sen. Richard Blumenthal, the subcommittee’s ranking member, alleged that Tether did not freeze wallets designated by counterterrorism agencies before 2024 and still lacked systems to proactively block clearly illicit addresses. The report found that $34.6 million moved through sanctioned wallets after their designation.

Blumenthal plans to refer the findings to the Treasury and Justice departments for investigation. He also cited a May 2026 alert from the Financial Crimes Enforcement Network, or FinCEN, which identified stablecoins as part of Iran’s shadow banking network.

“The Trump Administration’s glaring lack of oversight of cryptocurrency issuers has undermined our own national security interests,” Blumenthal said.

The report also examined Tether’s relationship with Cantor Fitzgerald, which was previously led by Commerce Secretary Howard Lutnick. Cantor Fitzgerald owns a 5% stake in Tether and holds a substantial share of the company’s reserves, which the report valued at about $114.9 billion.

Tether rejected the report’s characterization of USDT. In a statement, Chief Executive Paolo Ardoino noted that the company helped freeze nearly $550 million in Iran-linked USDT in 2026 and works with more than 340 law-enforcement agencies.

“Tether has consistently demonstrated that USD₮ is not a haven for sanctioned actors, terrorist organizations or criminal networks,” Ardoino said.

The report identified Iran’s use of USDT as part of a wider issue involving stablecoins and illicit finance. The Treasury Department has expanded sanctions against Iranian cryptocurrency channels while U.S. regulators examine how digital assets are used to move funds outside the traditional banking system.