Of 846 crypto wallets sanctioned by the US and Israel over links to Iran, 84 percent transacted in Tether’s USDT, according to a report released on Monday by Senator Richard Blumenthal, the top Democrat on the Senate Permanent Subcommittee on Investigations.
The 28-page report argues that the stablecoin has become central to Iran’s shadow banking system, used to move money across borders, prop up the rial and fund proxies including Hezbollah, Reuters reported.
Blumenthal sent the findings to Treasury Secretary Scott Bessent and Attorney General Todd Blanche, asking both to examine Tether’s anti-money-laundering and sanctions controls and whether federal law had been broken. The report also names Commerce Secretary Howard Lutnick, whose former firm Cantor Fitzgerald custodies Tether’s reserves, and Bo Hines, the former White House crypto adviser who now runs Tether’s US arm, The Block reported.
Tether rejected the picture. Chief executive Paolo Ardoino said the company has consistently shown that USDT is no haven for sanctioned actors, and that public blockchains give investigators a view of money flows that cash never could. Tether says it helped freeze nearly $550 million in Iran-linked USDT this year.
Even the investigators concede a caveat: Iran’s preference for USDT partly reflects how widely Iranian exchanges already use it, and how much more liquid it is than the alternatives.
A report from a minority senator carries no enforcement power, and the officials it asks to act serve an administration whose own members appear in its pages.
Whether $550 million in freezes is evidence of vigilance, or simply a measure of what was caught after the rest moved, is the question the report raises and cannot settle.
