Tether disputes Senate report on Iran's use of USDT
A Senate Democratic report says USDT is central to Iran's shadow banking network, while Tether says it froze nearly $550 million in Iran-linked tokens in 2026.
Key points
- The 24-page Senate report, titled "Tethered to Terror", examines 846 crypto addresses sanctioned by the US or Israel with ties to Iran or Iran-backed groups.
- The Permanent Subcommittee on Investigations study was promoted by Senator Richard Blumenthal and argues Tether freezes funds too slowly.
- Tether says it froze roughly $550 million in Iran-linked USDT in 2026 alone and works with Israel's NBCTF.
- The report says Circle's USDC barely featured in the analysis, while bitcoin, ether and TRX also appeared.
- Tether CEO Paolo Ardoino rejected the report's premise, saying USDT is not a haven for sanctioned actors.
Tether and Senate Democrats have clashed over Iran's use of crypto, after a Senate report said USDT underpins an Iranian shadow banking network and Tether pointed to hundreds of millions of dollars in frozen tokens. Bitcoin.com News reports that the stablecoin issuer disclosed on Monday that it had helped freeze nearly $550 million in Iran-linked USDT. The same day, the Wall Street Journal published an exclusive citing a newly released Senate Democratic report on Iran's reliance on the token.
The underlying document, published by the Permanent Subcommittee on Investigations, is titled "Tethered to Terror: Crypto & Iran's Shadow Banking Network" and was promoted by Senator Richard Blumenthal, a Connecticut Democrat. The 24-page study parses 846 distinct crypto addresses sanctioned by the United States or Israel, focusing on wallets tied to Iran or Iran-backed groups. The authors claim tether is Iran's primary crypto payment rail, and say some wallets even have links to the Central Bank of Iran.
Senate report targets USDT
According to the report, USDT sits at the centre of several networks that allegedly connect Iranian oil proceeds with settlements to Hezbollah, the Houthis and Hamas. The subcommittee argues that Tether is too slow to freeze funds, which it says creates a permissive environment for such activity. The analysis also notes that Iran-based groups use bitcoin, ether, TRX and other altcoins, though the study is largely focused on Tether's token.
The report draws a contrast with Circle's USDC, the dollar-pegged stablecoin from the second-largest issuer. It states that USDC was extremely limited in the subcommittee's analysis, raising questions about how stablecoin issuers police illicit activity. Tether responded the same day with a blog post of its own, referring to Treasury Secretary Scott Bessent's disclosure of Operation Economic Outcast and insisting the company is fully committed to supporting global efforts against illicit finance.
Tether cites freeze figures
Tether highlighted several freezes carried out with law enforcement and said it works with Israel's National Bureau for Counter Terror Financing. The company claims those actions amount to approximately $550 million in Iran-linked USDT frozen in 2026 alone. In the blog post, Tether chief executive Paolo Ardoino rejected the report's premise, saying the company has consistently shown that USDT is not a haven for sanctioned actors, terrorist organisations or criminal networks.
The exchange puts the world's largest stablecoin issuer under fresh scrutiny over sanctions compliance, at a time when US authorities are stepping up action against illicit crypto flows. It also sharpens the debate over how much responsibility private issuers carry for policing who uses their tokens. The article's page also carried separate promotional links about a California memecoin law and losses tied to President Donald Trump's token, which are not part of the Senate report dispute.