A Senate report led by Senator Richard Blumenthal reveals that Iran relies heavily on Tether's USDT to bypass U.S. sanctions, finding that 84% of 846 sanctioned Iran-linked wallets transacted predominantly in the stablecoin. In response, Tether announced it assisted U.S. authorities in freezing $550 million in Iran-linked USDT in 2026 alone. While Senate Democrats accuse Tether of failing to proactively block illicit funds, Tether CEO Paolo Ardoino defends the company's record, citing blockchain's superior traceability over cash.
Tether freezes Iran-Linked USDT
- ▪Tether froze over $130 million in USDT across four TRON network addresses in July 2026 following U.S. Treasury sanctions linking them to the Central Bank of Iran
- ▪Tether reported approximately $550 million in Iran-linked USDT freezes during 2026
- ▪Tether froze approximately $75 million in Iran-linked USDT through smaller actions between January and September 2026
- ▪Tether froze over $344 million in USDT across two wallets in April 2026, which the U.S. Office of Foreign Assets Control subsequently linked to Iran's Central Bank
Senate report on Tether and Iran
- ▪A report by Senate Democrats led by Sen. Richard Blumenthal characterized Tether's USDT as a primary payment tool and financial lifeline within Iran's shadow banking network to bypass U.S. sanctions
- ▪A report by Senate Democrats led by Sen. Richard Blumenthal asserted that Tether has repeatedly failed to proactively block illicit wallets and sometimes takes weeks to freeze designated wallets
- ▪The Senate Democrats' report alleged that the Iranian government conducted an estimated $2 billion in transactions using Tether's USDT in 2025
- ▪The Senate PSI minority reported that 84% of 846 Iran-linked wallets used USDT predominantly or exclusively
Paolo Ardoino defends Tether's compliance
- ▪Tether CEO Paolo Ardoino defended the company's compliance record, stating that USDT is not a haven for sanctioned actors, terrorist organizations, or criminal networks
- ▪Tether CEO Paolo Ardoino stated that public blockchains provide authorities with visibility into fund movements and that Tether acts when provided with credible law enforcement information
Tether cooperation with Israeli authorities
- ▪Tether blacklisted 39 of 187 crypto addresses identified by Israel's National Bureau for Counter Terror Financing in September 2025, freezing approximately $1.6 million in USDT
- ▪Tether has frozen more than $22 million in USDT across over 40 cases in cooperation with Israel's National Bureau for Counter Terror Financing
U.S. sanctions against Iran
- ▪The U.S. Treasury Department stepped up sanctions against Iran following the start of a U.S. military campaign targeting Iran in 2026
- ▪The U.S. Treasury Department launched Operation Economic Outcast in August 2026 to target Iranian digital assets and economic sectors following U.S. military strikes in Iran
Debatable claims
- ▪Tether's USDT poses an unacceptable risk to U.S. national security
- ▪U.S. sanctions are ineffective at stopping the flow of digital assets to Iran
- ▪The U.S. government should investigate Tether over its role in Iranian sanctions evasion
- ▪Tether's compliance measures are insufficient to prevent sanctions evasion
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