Hassan Maishera
TL;DR
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A report from Democratic investigators on the Senate Permanent Subcommittee on Investigations says USDT is widely used by wallets linked to Iran and designated militant groups.
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Investigators reviewed 846 wallets and said 87% of a subset of 757 wallets implicated in terrorism financing predominantly transacted in USDT.
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Sen. Richard Blumenthal accused Tether of failing to freeze some wallets despite public indicators of illicit activity.
A Senate Democratic investigation has accused Tether of failing to do enough to prevent its USDT stablecoin from being used in financial networks linked to Iran and militant groups.
The report, released Monday by investigators working under Sen. Richard Blumenthal, draws on blockchain transactions associated with wallets sanctioned, targeted for seizure, or otherwise identified as having ties to those networks. These are the investigators’ findings and allegations; they do not establish that Tether itself financed the activity.
Investigators Highlight USDT Use Across Iran-Linked Wallets
According to the report, investigators examined 846 wallets associated with Iran or designated groups. They said 87% of 757 wallets in a subset implicated in terrorism financing had predominantly transacted in USDT.
The investigators attributed USDT’s prevalence in part to its liquidity and its use on Iranian crypto exchanges. They also alleged that Tether had not frozen certain wallets despite publicly available information suggesting links to illicit finance.
Blumenthal has asked Treasury Secretary Scott Bessent and Attorney General Todd Blanche to examine whether any sanctions or banking laws were violated.
Blumenthal additionally raised questions about Tether’s ties to figures associated with the Trump administration and whether those relationships had affected federal oversight. The concern is an allegation raised by the senator, not a finding that regulators gave the company preferential treatment.
Tether Points to Iran-Linked Asset Freezes
Tether rejected the suggestion that USDT provides a safe haven for sanctioned actors. In a statement Monday, the company said actions involving its stablecoin had resulted in approximately $550 million being frozen in 2026 across wallets U.S. authorities identified as connected to Iran’s central bank and sanctions networks.
Tether Has Supported Nearly $550 Million in Iran-Linked USD₮ Freezes as U.S. Expands Sanctions Campaign
— Tether (@tether) September 28, 2026
Read more:https://t.co/L15BcxEjo7
CEO Paolo Ardoino said public blockchains help authorities trace funds and that Tether can act when law enforcement provides credible information. Tether cited its cooperation with U.S. agencies as evidence of its efforts to combat illicit finance. The Senate investigators and the company therefore differ over whether its response to suspicious wallets has been sufficient.
