Full Breakdown
Senate Report Flags Tether’s USDT as Key Tool in Iran’s Shadow Banking Network
By Drooid · · How we work
Core Findings of the Senate Investigation
On September 28, the Senate Permanent Subcommittee on Investigations released a 28-page report led by Senator Richard Blumenthal, ranking member of the subcommittee. The study examined 846 cryptocurrency wallets that the United States and Israel have sanctioned for links to Iran. It concluded that 84 % of those wallets transacted “exclusively or nearly exclusively” in Tether’s USDT stablecoin, enabling the Iranian government to move funds across borders, support the rial, and finance proxy groups such as Hezbollah.
Background & Context
U.S. sanctions have restricted Iran’s access to the global financial system, prompting Tehran to turn to digital assets that can bypass traditional banking channels. Stablecoins—cryptocurrencies pegged to fiat currencies—offer price stability and rapid cross-border settlement, making them attractive for sanctioned actors. The Treasury’s “Operation Economic Outcast,” launched after the U.S. military campaign against Iran earlier this year, has intensified scrutiny of crypto transactions tied to the regime.
Data & Statistics
- 846 wallets examined; 84 % used USDT for the majority of transactions.
- Israeli National Bureau for Counter-Terror Financing identified 757 wallets; 87 % of those transferred at least 80 % of their value in USDT.
- Two sanctioned oil-smuggling individuals, Alireza Derakhshan and Arash Estaki Alivand, moved $603 million in USDT between 2021 and 2025.
- Tether reports having frozen nearly $550 million in Iran-linked USDT during 2026, including $344 million in April and over $130 million in July.
- The company cites participation in 2,900+ investigations worldwide and a total of $4.9 billion in frozen assets, of which $2.4 billion involved U.S. authorities.
Official Statements & Responses
He also noted that public blockchain data gave “enough warning” in several cases before formal sanctions were issued, referencing a June 4 letter to the Justice Department that remained unanswered.
Conflicting Reports & Gaps
- The Senate analysis cites 84 % usage of USDT among 846 wallets, while Israeli data reports 87 % usage among 757 wallets. Both figures describe high reliance on USDT but differ in sample size and methodology.
Verbatim Quotes
- “Tether has consistently demonstrated that USDT is not a haven for sanctioned actors, terrorist organizations or criminal networks,” — CEO Paolo Ardoino. The, former executive director
What’s Next
The subcommittee’s report was formally referred to Treasury Secretary Scott Bessent and Attorney General Todd Blanche, requesting that both departments examine whether Tether violated federal sanctions or anti-money-laundering statutes. No legislative action has been announced, but the referral signals potential investigations and possible regulatory scrutiny of stablecoin issuers’ freeze-and-block capabilities.
