Senate report says Iran used Tether’s USDT to move money around sanctions

A Senate investigation found that wallets sanctioned over ties to Iran overwhelmingly dealt in Tether’s USDT stablecoin, according to Senate Democrats¹. Reuters reported that the token has become a significant financial lifeline for Iran and a tool for funding proxy organisations, including Hezbollah⁵. A Senate subcommittee report said 84% of Iran-linked sanctioned crypto wallets used USDT⁷. IBTimes UK reported the same 84% figure and said records for Hamas, Hezbollah and Houthi networks were treated separately⁸.

Senator Richard Blumenthal, the subcommittee’s ranking Democrat, called on the Treasury and Justice departments to investigate Tether³. Unchained reported that Iran and its regional proxies rely on USDT more than any other cryptocurrency, and that the senators say Cantor Fitzgerald owns 5% of Tether². The Wall Street Journal, which reported the investigation’s central finding, noted that the Treasury Department has separately been working on sanctioned wallets¹.

Tether’s answer

Tether said it has supported nearly $550 million in Iran-linked USDT freezes as the United States expands its sanctions campaign⁶. The company said the Treasury specifically identified digital assets as one of five sectors at risk of expanded sanctions, and said it is committed to supporting global law enforcement⁶.

The Deep Dive reported that Tether says it froze $550 million linked to Iran while on-chain data shows about $474 million³. The two accounts are not reconciled in the reporting available^3,6. IBTimes UK carried the company’s $550 million freeze total alongside the senators’ 84% figure without resolving the difference either⁸.

Why it matters to investors

USDT is the world’s largest stablecoin. Tether said its supply reached about $184.6 billion by June 30, giving it more than 60% of the stablecoin market⁴. Yahoo Finance described Tether as a top buyer of United States debt now caught up in an Iran sanctions case⁴. That places the reserve assets behind the token, and the short-dated Treasury demand they represent, inside a sanctions dispute rather than outside it^4,6.

What has landed so far is a congressional finding, not a rule or an enforcement action^1,5. The request is that two agencies open an investigation^2,3. Reuters framed the underlying claim as a matter of how Iranian money moved rather than of any finding against the issuer itself⁵.

What to watch: whether the Treasury acts on the digital-asset sector it has already flagged⁶, whether the freeze totals reported by Tether and those visible on-chain converge³, and whether the 84% concentration figure is contested by the issuer^7,8.