Tether Fires Back After Senate Report Ties USDT to Iran

TLDR

• Senate Democrats released a report saying USDT is a key tool for Iran to evade sanctions.
• The report claims Iran’s shadow banking network made an estimated $2 billion in transactions last year.
• Tether says it helped freeze nearly $550 million in Iran-linked USDT during 2026.
• Investigators found that 84% of 846 sanctioned wallets tied to Iran transacted almost exclusively in USDT.
• Senator Richard Blumenthal is calling on the Treasury and Justice Departments to investigate.

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Senate Democrats released a report on Monday claiming that the stablecoin USDT has become a major tool for Iran to get around U.S. sanctions.

Tether Says It Has Helped Freeze Nearly $550M in Iran-Linked USDT in 2026

Tether said it has supported U.S. law enforcement and sanctions authorities in freezing approximately $550 million in USDT linked to Iran’s central bank and sanctions networks in 2026. This included more… pic.twitter.com/krjYfTC4od

— Wu Blockchain (@WuBlockchain) September 28, 2026

The report comes from Democrats on the Senate’s Permanent Subcommittee on Intelligence. It argues that Tether’s dollar-pegged token plays a role in helping Iran move money outside the traditional banking system.

According to the report, USDT has become a financial lifeline within Iran’s shadow banking network. Investigators say the network processed large volumes of funds tied to Iranian interests.

The report estimates that Iran’s government carried out around $2 billion in transactions last year through this system. It does not give a full total for how much USDT was used overall.

Investigators also claim Tether has repeatedly failed to block wallets connected to Iran. The report says that before 2024, the company did not consistently freeze wallets flagged by counter-terrorism agencies.

This gap, the report says, allowed groups such as Hamas to shift away from Bitcoin and other cryptocurrencies toward USDT.

Senate Report Details Iran’s Crypto Use

Investigators reviewed 846 crypto wallets that had been sanctioned over ties to Iran. They found that 84% of those wallets transacted exclusively or nearly exclusively in USDT.

That finding led Senator Richard Blumenthal to call for federal action. He wants the Treasury and Justice Departments to investigate possible sanctions violations connected to the stablecoin.

The report frames Iran’s use of USDT as part of a wider problem with cryptocurrency. It argues that these tools are undermining U.S. and allied efforts to stop Iran’s regional activities.

Tether Defends Its Track Record

Tether responded to the report in a blog post on Monday. The company said it has supported nearly $550 million in Iran-linked freezes so far this year.

Tether said it froze more than $130 million in USDT across four wallets in 2026 alone. In April, it froze more than $344 million connected to the Central Bank of Iran.

CEO Paolo Ardoino said USDT is not a safe haven for sanctioned groups. He said Tether has worked with law enforcement for years to trace and stop illicit activity.

Tether says its cooperation with global authorities has led to more than $4.9 billion in frozen assets overall. Of that total, over $2.4 billion is linked to U.S. agencies.

Ardoino pointed to work with the DOJ, FBI, Secret Service, HSI, and OFAC. He said these agencies have repeatedly used Tether’s help to trace, freeze, and recover funds.

He added that Tether will keep making this capability available to authorities. The goal, he said, is stopping terrorism financing, sanctions evasion, fraud, and other crimes tied to crypto.

The Senate report and Tether’s response mark the latest exchange in an ongoing debate over how stablecoins are used and monitored around the world.