Tether Defends as US Senate Probe Finds USDT Used in 84% of Sanctioned Iran’s Wallets

Stablecoin issuer Tether on Monday pushed back against a U.S. Senate Democrats’ investigation that found Iranian crypto wallets used USDT stablecoin to evade sanctions. The company claimed it has already frozen nearly $550 million in Iran-linked USDT this year at the request of U.S. authorities.

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US Senate Democrats Probe Finds Heavy Iranian Use of USDT

Senate Democrats Permanent Subcommittee on Investigations found that Tether’s USDT stablecoin has become a primary means of payment for the Iranian regime and a tool for funding terrorist proxy organizations such as Hezbollah, The Wall Street Journal reported on September 28.

Among more than 800 sanctioned crypto wallets reviewed, about 84% used USDT as their main or exclusive asset. The same reporting said Iran’s Central Bank had accumulated at least $507 million in USDT to operate under sanctions.

The finding lands amid US Treasury’s Operation Economic Outcast campaign to cut Iran and the Islamic Revolutionary Guard Corps (IRCG) off from crypto networks and after OFAC designations of Iranian exchanges such as Nobitex, Wallex, Bitpin and Ramzinex.

Senator Richard Blumenthal, ranking member of the Permanent Subcommittee on Investigations, had already written Tether in June seeking records on USDT’s role in Iranian and Russian shadow-banking networks.

Notably, Binance is under DOJ investigation over possible Iran sanctions violations. This comes days after co-CEO Richard Teng publicly distanced the exchange from a related civil forfeiture case and highlighted zero tolerance for sanctions violations or illicit activity.

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Tether Says It Froze $550 Million in USDT

Tether argued the company remained compliant and cooperated with U.S. and international law enforcement. It also cooperated with Treasury Secretary Scott Bessent’s recent economic sanctions against Iran.

In 2026 alone, Tether claimed it froze $550 million in USDT that U.S. authorities identified as connected to Iran’s Central Bank and sanctioned networks. The company added it also froze more than $344 million across two addresses in April, followed by more than $130 million across four additional TRON wallets in July.

“Tether has consistently demonstrated that USD₮ is not a haven for sanctioned actors, terrorist organizations or criminal networks,” said Paolo Ardoino, CEO of Tether.

Tether highlighted that U.S. authorities, including the DOJ, the FBI, the U.S. Secret Service, Homeland Security Investigations, and the Treasury’s OFAC, have repeatedly accepted the company’s role in major enforcement operations.