A recent report spearheaded by US Senate Democrats has asserted that Tether’s USDT stablecoin has emerged as a “significant financial lifeline” for Iran. The report further suggests that the digital asset is being utilised to fund various proxy organisations, including Hezbollah. Published on Monday, the findings were led by Senator Richard Blumenthal of Connecticut, who serves as the top Democrat on the Senate Permanent Subcommittee on Investigations.
The comprehensive report analysed 846 cryptocurrency wallets that have been sanctioned by both Israel and the United States due to their connections with Iran. A striking 84 per cent of these wallets were found to have transacted in USDT. These transactions reportedly assisted the Iranian government in moving funds across its borders and bolstering its currency, particularly amidst stringent US sanctions, including through the Central Bank of Iran. Tether is the company behind USDT, the world’s largest dollar-backed stablecoin. Stablecoins are cryptocurrencies designed to maintain a stable value, typically pegged to a fiat currency like the US dollar, making them useful for transactions and remittances.
Senator Blumenthal stated that the report “exposes how Tether and its flagship token have become central to Iran’s shadow banking system,” enabling the Iranian government to finance a range of activities. He called upon the US Treasury and Justice Departments to initiate investigations into Tether. In response, Tether issued a statement reaffirming its commitment to cooperating with the US government. The company highlighted its support for the freezing of nearly $550 million in Iran-linked USDT in 2026. Tether CEO Paolo Ardoino commented that “Tether has consistently demonstrated that USD₮ is not a haven for sanctioned actors, terrorist organizations or criminal networks.”
The allegations come as the US Treasury Department has escalated sanctions against the Islamic Republic, particularly following the commencement of the US military campaign against Iran earlier this year. Last month, the department launched “Operation Economic Outcast,” an initiative that includes a focused effort on monitoring and addressing illicit crypto transactions.
