A report led by Senate Democrats found that 84% of 846 crypto wallets sanctioned by the U.S. and Israel in connection with Iran transacted in Tether’s USDT, which it said helped Iran move money across borders and fund proxy groups, including Hezbollah.
Led by Senator Richard Blumenthal, the report described USDT as central to Iran’s “shadow banking system.” Blumenthal, the top Democrat on the Senate Permanent Subcommittee on Investigations, called on the Treasury and Justice departments to investigate Tether.
Tether said it would cooperate with the U.S. government and supported the freezing of nearly $550 million in Iran-linked USDT in 2026. CEO Paolo Ardoino said the token was not a haven for sanctioned actors, terrorist organizations or criminal networks. Tether’s USDT is the world’s largest dollar-backed stablecoin. The Treasury stepped up sanctions after the U.S. military campaign against Iran began this year and launched Operation Economic Outcast last month, with a focus on crypto transactions.
