A Senate report reveals Tether's critical role in Iran's evasion of international sanctions, estimating $2 billion in transactions last year.
A recent report from Senate Democrats identifies Tether, a stablecoin linked to the U.S. dollar, as a vital tool for the Iranian government in its attempts to bypass international sanctions.
The Senate's Permanent Subcommittee on Intelligence revealed that Tether (USDT) plays a critical role in facilitating transactions that evade global financial restrictions, highlighting concerns over its effectiveness in blocking Iranian-associated wallets.
The report emphasizes that Iran's cryptocurrency-based shadow banking system has handled significant amounts of funds, implicating various Iranian entities. It states, "USDT has become a significant financial lifeline within Iran's shadow banking network," noting that Tether's response to freezing wallets can be slow, often taking weeks.
Despite some efforts to address this issue, Tether reportedly did not consistently block wallets flagged by counter-terrorism agencies prior to 2024, allowing for continued misuse. The report also mentions that terrorist organizations, including Hamas, have shifted their preference from Bitcoin to USDT for transactions.
While the report does not specify the total volume of USDT used by Iran, it estimates that the country executed around $2 billion in transactions last year. This finding adds to a broader critique of cryptocurrencies, suggesting they undermine U.S. and allied efforts to combat regional terrorism.
Tether has responded to the allegations, claiming to have facilitated the freezing of nearly $550 million in wallets linked to Iran at the request of U.S. authorities. Tether CEO Paolo Ardoino emphasized the company's commitment to collaborating with global authorities to identify and freeze illicit funds.
