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

Senate Democrats say most Iran-linked sanctioned wallets ran on the largest stablecoin, and Tether says it has helped freeze hundreds of millions of dollars.

Assembled by Claude from 8 sources at 8 outlets · Monday, September 28, 2026, Evening edition, 5:25 PM EDT · no human byline

Disclosure. This item was assembled by an AI from the RSS excerpts of the outlets tagged inline. No human wrote or checked it before publication. Feed selection and categories are editorial choices by Teresa Lo. Nothing here is investment advice.

What happened

A Senate investigation found that wallets sanctioned over ties to Iran overwhelmingly dealt in Tether's USDT stablecoin, according to Senate Democrats wsj.com. Reuters reported that the token has become a significant financial lifeline for Iran and a tool for funding proxy organisations, including Hezbollah reuters.com. A Senate subcommittee report said 84% of Iran-linked sanctioned crypto wallets used USDT pluang.com. IBTimes UK reported the same 84% figure and said records for Hamas, Hezbollah and Houthi networks were treated separately ibtimes.co.uk.

Senator Richard Blumenthal, the subcommittee's ranking Democrat, called on the Treasury and Justice departments to investigate Tether thedeepdive.ca. 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 Tether unchainedcrypto.com. The Wall Street Journal, which reported the investigation's central finding, noted that the Treasury Department has separately been working on sanctioned wallets wsj.com.

Tether's answer

Tether said it has supported nearly $550 million in Iran-linked USDT freezes as the United States expands its sanctions campaign tether.io. 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 enforcement tether.io.

The Deep Dive reported that Tether says it froze $550 million linked to Iran while on-chain data shows about $474 million thedeepdive.ca. The two accounts are not reconciled in the reporting available thedeepdive.catether.io. IBTimes UK carried the company's $550 million freeze total alongside the senators' 84% figure without resolving the difference either ibtimes.co.uk.

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 market finance.yahoo.com. Yahoo Finance described Tether as a top buyer of United States debt now caught up in an Iran sanctions case finance.yahoo.com. That places the reserve assets behind the token, and the short-dated Treasury demand they represent, inside a sanctions dispute rather than outside it finance.yahoo.comtether.io.

What has landed so far is a congressional finding, not a rule or an enforcement action wsj.comreuters.com. The request is that two agencies open an investigation thedeepdive.caunchainedcrypto.com. Reuters framed the underlying claim as a matter of how Iranian money moved rather than of any finding against the issuer itself reuters.com.

What to watch: whether the Treasury acts on the digital-asset sector it has already flagged tether.io, whether the freeze totals reported by Tether and those visible on-chain converge thedeepdive.ca, and whether the 84% concentration figure is contested by the issuer pluang.comibtimes.co.uk.

Sources

  1. wsj.com: Senate Investigation Finds Rampant Use of Tether's Stablecoin by Iranian Regime - WSJ (2026-09-28)
  2. unchainedcrypto.com: Sen. Blumenthal Urges Treasury and DOJ to Investigate Tether Over Iran's Use of USDT (2026-09-28)
  3. thedeepdive.ca: Tether Says It Froze $550M Linked to Iran, On-Chain Data Shows About $474M (2026-09-28)
  4. finance.yahoo.com: Top buyer of U.S. debt caught up in Iran sanctions case - Yahoo Finance (2026-09-28)
  5. reuters.com: Tether USDT aids Iran funding, Senate report says - Reuters (2026-09-28)
  6. tether.io: Tether Has Supported Nearly $550 Million in Iran-Linked USD₮ Freezes as U.S. Expands ... (2026-09-28)
  7. pluang.com: Senate finds Iran uses 84% USDT wallets; Tether ... - Pluang (2026-09-28)
  8. ibtimes.co.uk: Tether Became the Crypto Rail for Iran, Hamas, Hezbollah and the Houthis ... - IBTimes UK (2026-09-28)