Tether USDT cryptocurrency is a 'financial lifeline' for Iran, US Senate report says

Tether's USDT stablecoin has become a "significant financial lifeline" for Iran and a tool for funding proxy ​organizations, including Hezbollah, according to a report led by ‌Senate Democrats, published on Monday.

Led by Senator Richard Blumenthal of Connecticut, the top Democrat on the Senate Permanent Subcommittee on Investigations, the report ​analyzed 846 crypto wallets that have been sanctioned by ​Israel and the US in connection with Iran.

It ⁠found that 84% transacted in USDT, such as to help ​the Iranian government move money across its borders and support ​its currency amid US sanctions, including through the Central Bank of Iran.

The report "exposes how Tether and its flagship token have become central to Iran’s ​shadow banking system," allowing the Iranian government to fund ​a range of activities, Blumenthal said in a statement. He called for ‌the ⁠Treasury and Justice Departments to investigate Tether.

Tether's USDT is the world's largest dollar-backed stablecoin. In a statement, the company said it was committed to cooperating with the US government, and said ​it supported ​the freezing of ⁠nearly $550 million in Iran-linked USDT in 2026.

"Tether has consistently demonstrated that USDT is not a ​haven for sanctioned actors, terrorist organizations or criminal ​networks," ⁠Tether CEO Paolo Ardoino said in the statement.

Following the start of the US military campaign against Iran this year, the Treasury Department has stepped ⁠up ​sanctions against the Islamic Republic. Last ​month, it launched Operation Economic Outcast, which included a focus on crypto transactions.