Key facts
- 84% of 846 sanctioned wallets tied to Iran and its proxies transacted almost exclusively in Tether's USDT, according to a report by Senate staff.
- The report, titled "Tethered to Terrorism," draws on blockchain records for wallets designated by the Treasury's Office of Foreign Assets Control and Israel's National Bureau for Counter Terror Financing.
- Two sanctioned Iranian oil smugglers moved over $603 million in USDT between 2021 and 2025 through a network linked to Hizballah, the Houthis, and Iranian financial institutions.
- Senator Richard Blumenthal asked the Treasury and Justice Departments to investigate Tether's anti-money laundering and sanctions compliance.
- Tether stated it has frozen about $550 million in USDT linked to Iran's central bank in 2026, and over $4.9 billion across all cases.
- Tether CEO Paolo Ardoino said public blockchains offer authorities visibility into fund movements.
A report released by Democratic staff on the Senate Permanent Subcommittee on Investigations found that 84% of 846 sanctioned cryptocurrency wallets linked to Iran and its proxies transacted almost exclusively in Tether's USDT stablecoin. The report, titled "Tethered to Terrorism," analyzed blockchain records for wallets designated by the U.S. Treasury's Office of Foreign Assets Control (OFAC) and Israel's National Bureau for Counter Terror Financing between June 2021 and August 2026.
Senator Richard Blumenthal (D-CT), the subcommittee's ranking member, stated that Tether operates as a "superhighway" for the Iranian government to evade sanctions, facilitate money laundering, and fund hostile activities. He has written to Treasury Secretary Scott Bessent and Attorney General Todd Blanche urging an investigation into Tether's anti-money laundering and sanctions compliance, arguing that current oversight of crypto firms undermines national security.
The report highlighted that two sanctioned Iranian oil smugglers, Alireza Derakhshan and Arash Estaki Alivand, moved over $603 million in USDT between 2021 and 2025 through a network connected to Hizballah, the Houthis, and Iranian financial institutions, with evidence suggesting this network was used for purchasing military equipment. It also noted that prior to 2024, Tether did not consistently freeze designated wallets, and that Hamas has shifted towards promoting USDT.
Tether responded the same day, stating it had frozen approximately $550 million in USDT across wallets linked to Iran's central bank in 2026, and over $4.9 billion in total across more than 340 agencies in 67 countries. Tether CEO Paolo Ardoino emphasized that public blockchains offer authorities significant visibility into fund movements. The statement did not directly address the subcommittee's findings.