U.S. Senators Accuse Tether: USDT Became Iran’s “Financial Lifeline”
In a new report, Democratic U.S. senators alleged that USDT played a significant role in helping Iran evade sanctions and that Tether failed to adequately block wallets linked to the country.
First reported by the Wall Street Journal and covered by CoinDesk, the report was published on Monday, September 28, by a group of Democratic senators. The senators described dollar-pegged USDT as a key “financial lifeline” in Iran’s shadow banking network and criticized Tether’s wallet-freezing practices.
At the center of the criticism is how requests concerning Iran-linked addresses were handled. The senators alleged that freezing some wallets took weeks, and that some addresses were not blacklisted even after the company responded to the requests.
Report criticizes delays and lack of deterrence
The report argued that before 2024, Tether did not regularly and comprehensively freeze wallets flagged by counterterrorism agencies. It also alleged that the company fell short in proactively blocking addresses clearly linked to illicit activity.
The senators claimed these shortcomings weakened deterrence and created conditions that encouraged groups such as Hamas to use USDT instead of Bitcoin and other cryptocurrencies. The report’s criticism went beyond Tether’s practices, also arguing that cryptocurrencies were undermining efforts by the U.S. and its allies against Iran.
An estimate of approximately $2 billion in transactions by the Iranian government last year was cited, but no total was provided for how much of that was conducted using USDT.
Tether announced a $550 million freeze the same day
In a statement published Monday, Tether said it had supported the freezing of approximately $550 million in Iran-linked assets. The company listed actions it had taken at the request of U.S. authorities.
CEO Paolo Ardoino said the company regularly and directly coordinates with authorities in the U.S. and other countries as part of efforts to prevent sanctions evasion and terrorist financing. Ardoino emphasized that the cooperation aims to help identify and freeze illicit funds.