The report, titled Tethered to Terrorism: Crypto & Iran’s Shadow Banking Network, was released on September 28, 2026, by minority staff of the Senate Permanent Subcommittee on Investigations. It analyzed 846 crypto wallets sanctioned or targeted for seizure by OFAC or Israel’s National Bureau for Counter Terror Financing between June 2021 and August 2026.
Data shows that 84% of these wallets primarily used USDT. Specifically, 87% of the 757 wallets flagged by Israel and 57% of the 101 wallets designated by OFAC transacted in the stablecoin. One network of oil smugglers reportedly moved over $603 million in USDT during the period.
Tether responded by noting it froze approximately $550 million in Iran-affiliated USDT throughout 2026, including $344 million linked to the Central Bank of Iran in April. The report suggests that Tether’s enforcement of wallet freezes was inconsistent prior to 2024.
Senator Richard Blumenthal has requested that the Treasury and Justice Departments investigate whether Tether complied with US sanctions and anti-money laundering regulations. The agencies are expected to respond by October 9, 2026.
