US Senate report finds Iran uses Tether to evade global sanctions

Iran is utilizing the U.S. dollar-pegged stablecoin Tether (USDT) to bypass international sanctions and fund regional proxies, according to a report released on Monday, 28 September, by the U.S. Senate Permanent Subcommittee on Investigations. The findings indicate that the digital currency serves as a primary financial lifeline for the Iranian regime’s shadow banking network, facilitating the procurement of military equipment including drones. Dominance of USDT in Sanctioned Wallets Senate investigators analyzed 846 cryptocurrency wallets that have been sanctioned or targeted for seizure due to links with Tehran and its regional allies. The analysis found that 84% of these wallets transacted exclusively or nearly exclusively in USDT. Senator Richard Blumenthal, the subcommittee’s top Democrat, stated that the stablecoin has become central to Iran’s ability to move funds globally and support its domestic currency outside the traditional banking system. The report, cited by The Wall Street Journal, specifically identified Tether as a major payment tool for financing groups such as Hezbollah. It criticized the cryptocurrency issuer for failing to consistently freeze illicit wallets before 2024, alleging that the platform allowed sanctioned entities an alternative to the regulated global financial system. Tether Responds to Illicit Activity Claims In a statement issued on Monday, 28 September, Tether disclosed that it has frozen approximately $550 million in 2026 across…