US Senator Blumenthal Calls Tether's USDT a 'Superhighway' for Iranian Sanctions Evasion

In brief

• Democratic staff on the Senate Permanent Subcommittee on Investigations analyzed 846 sanctioned wallets tied to Iran and its proxies.
• They found 84% transacted exclusively, or nearly exclusively, in Tether's USDT.
• Tether published a statement the same day citing $550 million of Iran-linked freezes this year, without addressing the report.

Of 846 cryptocurrency wallets sanctioned or targeted for seizure over links to Iran and its regional proxies, 84% transacted exclusively or nearly exclusively in Tether's USDT stablecoin, according to a report released by Senator Richard Blumenthal (D-CT).

The report, titled "Tethered to Terrorism," comes from Democratic staff on the Senate Permanent Subcommittee on Investigations, where Blumenthal is ranking member. It draws on blockchain records for wallets designated by the Treasury's Office of Foreign Assets Control and Israel's National Bureau for Counter Terror Financing between June 2021 and August 2026. The headline figure rests unevenly on the two sets, with 87% of the 757 wallets designated by the Israeli bureau transacting predominantly in USDT, against 57% of the 101 designated by OFAC.

Its second finding concerns scale. Two sanctioned Iranian oil smugglers, Alireza Derakhshan and Arash Estaki Alivand, moved more than $603 million in USDT between 2021 and 2025 through a network that reached Hizballah, the Houthis and Iranian financial institutions, the subcommittee found. It says there is evidence the same network was used to buy and sell drones and other military equipment.