Senator Blumenthal Labels Tether's USDT as a 'Superhighway' for Evasion of Iranian Sanctions

Overview of Findings on Tether's Usage

Senator Richard Blumenthal (D-CT) has raised alarms regarding Tether's USDT stablecoin, which he describes as a "superhighway" for Iran to evade sanctions. This assertion follows an analysis by the Senate Permanent Subcommittee on Investigations, which examined 846 cryptocurrency wallets linked to Iran and its affiliates.

Key Statistics from the Analysis

The report reveals that a staggering 84% of these wallets primarily utilized USDT for transactions. The data, sourced from blockchain analysis, indicates that 87% of wallets identified by Israel's National Bureau for Counter Terror Financing and 57% of those flagged by the Treasury's Office of Foreign Assets Control (OFAC) predominantly operated in USDT.

Tether's Response and Financial Transactions

On the same day the report was released, Tether announced it had frozen $550 million connected to Iranian entities this year. However, the company did not specifically address the findings of the report. The subcommittee's investigation highlighted that two sanctioned Iranian oil traffickers transferred over $603 million in USDT between 2021 and 2025, establishing connections with groups like Hizballah and the Houthis.

Compliance Issues and Government Oversight

The report criticizes Tether for its lack of proactive measures in freezing wallets identified by counter-terrorism agencies, with approximately $34.6 million still flowing through sanctioned wallets after being flagged. Tether's compliance with OFAC sanctions has been described as "voluntary," differentiating it from the mandatory compliance expected of traditional banks.

Blumenthal has urged Treasury Secretary Scott Bessent and Attorney General Todd Blanche to investigate Tether's adherence to anti-money laundering and sanctions regulations, expressing concerns that the oversight of cryptocurrency firms may pose risks to national security. The report also mentions Tether's financial ties to Cantor Fitzgerald, which has a stake in Tether, raising questions about potential conflicts of interest.