Senator Calls for U.S. Investigation of Tether, Sends Iran Report to Officials
U.S. Senator Richard Blumenthal called on the attorney general and treasury secretary to investigate possible sanctions and banking law violations involving Tether, following a report examining Iran-linked crypto wallets.
According to The Block, Blumenthal asked for possible violations to be investigated in letters sent to Attorney General Todd Blanche and Treasury Secretary Scott Bessent. The request is based on a 28-page report on Iran prepared by Democratic investigators on the Senate Permanent Subcommittee on Investigations.
The report criticizes the role of Tether’s USDT in Iran’s financial networks and the company’s wallet-blocking practices. Blumenthal is calling on federal authorities to investigate these findings.
USDT featured in 87% of 757 wallets examined
Researchers analyzed blockchain transaction data from a total of 846 cryptocurrency wallets sanctioned or otherwise blocked because of their ties to Iran. In this sample, 87% of the 757 wallets linked to Iran-related terrorist financing primarily used USDT in their transactions, the report said.
The report cited USDT’s widespread use on Iranian cryptocurrency exchanges and its high liquidity compared with alternatives as reasons for this preference. Researchers also alleged that Tether failed to take adequate action on some wallets for which there were strong public indications of links to illicit finance.
Ties to the U.S. administration also featured in the report
Blumenthal argued that Tether’s relationships with the U.S. administration also raise questions about oversight. The report drew attention to Cantor Fitzgerald, previously led by Commerce Secretary Howard Lutnick, providing custody services for Tether, and Bo Hines, the former head of the White House Crypto Council, becoming CEO of Tether U.S.
The senator said these relationships warrant scrutiny over whether the company is receiving lax oversight of its anti-money laundering obligations.
Tether: We act when we receive credible information
In a statement published Monday, Tether said it had helped freeze $550 million in Iran-linked USDT. CEO Paolo Ardoino said public blockchains give authorities visibility into the movement of funds and that the company can act when it receives credible information from law enforcement.
Ardoino argued that USDT is not a safe haven for sanctioned actors, terrorist organizations, or criminal networks.