Senate Democrats Accuse Tether of Enabling Iranian Sanctions Evasion
Senate Democrats released a report alleging Tether serves as a primary financial channel for Iran to bypass sanctions, prompting the stablecoin issuer to highlight nearly $550 million in frozen Iranian-linked funds.
Democrats on the Senate Permanent Subcommittee on Intelligence have targeted Tether in a new report, claiming the dollar-backed stablecoin operates as an essential tool for the Iranian government to skirt international sanctions.
The findings, first reported by The Wall Street Journal, argue that Iranian entities rely on USDT within a crypto-based shadow banking setup. Lawmakers alleged that Tether has been slow to take action against illicit addresses, asserting that freezes can take weeks or wrap up without wallets ever being blacklisted.
The subcommittee said Tether has "repeatedly failed" to restrict addresses tied to Iran. According to the document, an absence of consistent wallet freezing before 2024 prompted groups like Hamas to pivot away from transacting in Bitcoin and other cryptocurrencies toward USDT.
While the report did not provide a cumulative figure for total USDT handled by Iran, it estimated that the regime completed around $2 billion in transactions over the past year.
Lawmakers also used the findings to criticize the wider sector, stating that cryptocurrencies are working against American and allied efforts to curb regional terrorism backed by Iran.
Tether responded in a Monday blog post, stating that it has supported freezes on nearly $550 million connected to Iran after requests from U.S. law enforcement. Tether CEO Paolo Ardoino said the company maintains direct contact with global regulators, noting that the firm remains "in regular and direct coordination with authorities in the United States and around the world to help ensure that illicit funds can be identified and frozen."
