Iran has reportedly been utilizing Tether’s USDT as a way to navigate around U.S. sanctions and facilitate money transfers for the regime and groups like Hezbollah, as per a recent report from Senate Democrats.
The Permanent Subcommittee on Investigations revealed that the token has emerged as a primary payment channel for Tehran and a financing mechanism for terrorist factions. The Wall Street Journal, which had access to the findings, reports on this development.
With Tether’s USDT constituting approximately 60% of all stablecoins in terms of market capitalization, its stable value linked to the dollar makes it an attractive option for transactions and, as highlighted by the Journal, potentially for illicit activities like money laundering.
In response to U.S. military actions in Iran, particularly Operation Economic Outcast in August, the Treasury has been escalating economic pressure on the country.
Senator Richard Blumenthal (D-Conn.) spearheaded the investigation, which examined 846 wallets sanctioned by the U.S. and Israeli governments due to connections with Iran. The study found that 84% of these wallets predominantly dealt in USDT.
Blumenthal emphasized to the Journal that the report uncovers the pivotal role Tether and its flagship token play in Iran’s clandestine financial network, enabling the Iranian government to support its regional allies, perpetrate human rights violations, and advance hostile military programs in defiance of sanctions.
While a Tether spokesperson declined to provide a comment, the company has reportedly collaborated with law enforcement to freeze certain wallets linked to the regime.
Recent data from TRM Labs indicates a decrease in USDT’s share of transaction volume within Iran-associated wallets, dropping from 72% in 2024 to 67% in 2025, and further declining to 14% of on-chain volume in August.
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