A report from the Senate Permanent Subcommittee on Investigations, led by Senator Richard Blumenthal, claims that 84% of 846 cryptocurrency wallets linked to Iran and its proxies used Tether's USDT. The data covers designations by the Treasury's Office of Foreign Assets Control and Israel's National Bureau for Counter Terror Financing between June 2021 and August 2026.
The subcommittee identified two Iranian oil smugglers who moved over $603 million in USDT between 2021 and 2025. This network allegedly supported groups including Hizballah and the Houthis, as well as Iranian financial institutions, to facilitate the trade of military equipment like drones.
Blumenthal has requested that the Treasury and the Justice Department investigate Tether regarding its anti-money laundering and sanctions compliance. The report highlights that Tether previously described its compliance with OFAC sanctions as voluntary, contrasting this with the regulatory obligations imposed on traditional banks.
Tether responded by stating it has frozen more than $4.9 billion in assets across all cases, working with over 340 agencies in 67 countries. Regarding Iran specifically, the company reported freezing roughly $550 million in wallets linked to the Iranian central bank during 2026, including $344 million in April and $130 million in July.
