Senate report ties 84% of Iran-sanctioned wallets to USDT; Tether cites $550M in freezes
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Senate subcommittee report: 84% of 846 Iran-linked sanctioned or seized wallets used USDT almost exclusively
Tether said it supported about $550 million in Iran-linked USDT freezes this year, without citing the report
USDT trades in Upbit and Bithumb won markets; Upbit priced it at 1,351 won late on Sept. 29
Of 846 cryptocurrency wallets sanctioned or seized over links to Iran, 84% transacted exclusively, or nearly exclusively, in Tether's stablecoin USDT, according to a U.S. Senate report released on Sept. 28 (U.S. time). The report, prepared by Sen. Richard Blumenthal, the ranking Democrat on the Senate Permanent Subcommittee on Investigations (PSI), and the subcommittee's Democratic staff, identified USDT as the key payment instrument of Iran's "shadow banking" system. Shadow banking refers to informal money networks that move funds outside the formal banking system to evade sanctions. On the same day, Tether said it had supported the freezing of about $550 million in Iran-linked USDT this year.
Two accounts of the 846 wallets
Senate subcommittee report
The report analyzed the transaction records of 846 wallets that the Treasury Department's Office of Foreign Assets Control (OFAC) and Israel's National Bureau for Counter Terror Financing (NBCTF) designated in connection with Iran and its affiliated groups between June 2021 and August 2026. It said 87% of the 757 NBCTF-designated wallets and 57% of the 101 OFAC-designated wallets used USDT for more than 80% of their transaction value, while bitcoin, in second place, accounted for 7% and 19%, respectively. Rival stablecoin USDC appeared in only a tiny share of transactions, the report said.
Two sanctioned Iranian oil smugglers received more than $603 million in USDT from 2021 to 2025, and the report said their network was connected to Hezbollah and the Houthi rebels.
The report also cited delayed freezes. The NBCTF designated 39 wallets of a Hezbollah financier in June 2023, but Tether blocked only five and did not freeze the remaining 34 until March 2024, during which time $34.6 million moved out, it said.
Tether's statement
Tether said it supported the freezing of about $550 million in Iran-linked USDT this year. It said $344 million at two addresses linked to the Central Bank of Iran was frozen in April and added to OFAC's sanctions list the following day, and that $130 million in four TRON wallets was frozen in July as the Treasury expanded its Central Bank of Iran designation.
Working with the NBCTF, Tether said it has frozen more than 22 million USDT at more than 640 addresses in over 40 cases, and that, cooperating with more than 340 law enforcement agencies in 67 countries, it has frozen a total of $4.9 billion in assets to date.
The statement did not directly mention the Senate report.
"USD₮ is not a haven for sanctioned actors, terrorist organizations or criminal networks"
Paolo Ardoino, CEO of Tether
When the switch from bitcoin to USDT came
The report said the main payment instrument of Iran and its affiliated groups shifted to USDT between 2023 and 2024. Hamas fundraising wallets that Israel first designated in June 2021 mainly received bitcoin, but nearly all of the roughly $4.5 million that flowed into eight wallets of Gaza Now, a fundraising group OFAC sanctioned in March 2024, was USDT, it said.
The report also traced flows involving the Central Bank of Iran. Two central bank wallets named in leaked documents received about $50 million, exclusively in USDT, in April and May 2025 and moved the funds within days to the Iranian exchanges Nobitex and Ramzinex or to a mixer, a service that blends transactions to make them harder to trace, it said. A central bank wallet that Babak Zanjani, Iran's leading money-laundering operative, disclosed on X in December 2025 had not been added to Tether's blocklist as of September 2026, according to the subcommittee's analysis.
Blumenthal asks Treasury and Justice to investigate
Blumenthal sent a letter to Treasury Secretary Scott Bessent and the Justice Department asking them to investigate Tether's anti-money-laundering and sanctions compliance. The report recommended that issuers of dollar stablecoins with substantial U.S. ties be made directly subject to U.S. sanctions law. It also questioned whether federal oversight had been lax, noting that Cantor Fitzgerald, which has a stake in Tether worth billions of dollars, was formerly led by Commerce Secretary Howard Lutnick and is now run by his children.
The report confirmed that Tether received the subcommittee's June 4 letter requesting information, but said the company had not responded as of publication. Tether accounts for about 60% of all stablecoins worldwide by market capitalization, according to the report.
Tether in Korea's won markets
USDT is listed in the Korean won markets, where assets trade directly against the won, of both Upbit and Bithumb. As of 11:36 p.m. KST on Sept. 29, it traded at 1,351 won on Upbit and 1,352 won on Bithumb, and 24-hour trading value was about 75.4 billion won on Upbit and about 91.3 billion won on Bithumb. The won-dollar exchange rate on Coinyong's price screen at the same time was 1,358.97 won, leaving Upbit's USDT price about 0.6% below it. Upbit's 52-week low for USDT is 1,338 won, set on Sept. 23.
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