Tether disclosed on Monday that it helped freeze nearly $550 million in Iran-linked USDT during 2026, the same day a new Senate Democratic report accused the stablecoin issuer of running a "permissive environment" for Iran's shadow banking network. The Senate subcommittee examined 846 sanctioned crypto addresses tied to Iran, and Tether's CEO appeared to disagree with the report's premise the same day.
Senate Report Examines 846 Crypto Addresses Linked to Iran
The Permanent Subcommittee on Investigations released a 24-page study titled "Tethered to Terror: Crypto & Iran's Shadow Banking Network," promoted by Sen. Richard Blumenthal (D-CT). It followed a Wall Street Journal exclusive on the same document. The analysis parses 846 distinct crypto addresses sanctioned by the U.S. or Israel, tied to Iran or Iran-backed groups.
However, the report claims USDT is Iran's primary crypto payment rail, with some wallets tied to the Central Bank of Iran. Its authors argue USDT sits at the middle of networks that reportedly connect Iranian oil proceeds to settlements with Hezbollah, the Houthis, and Hamas. The subcommittee also contends Tether is too slow to freeze funds, which it says creates a permissive environment.
Tether Counters With $550 Million in Freezes
On the same day, Tether published its own report discussing Treasury Secretary Scott Bessent's disclosure of Operation Economic Outcast. The company said it worked with law enforcement and with Israel's National Bureau for Counter Terror Financing to stop illicit flows, and that those actions amount to approximately $550 million in Iran-linked USDT frozen in 2026 alone.
Yet the subcommittee's analysis also notes that Iran-based groups are leveraging bitcoin, ether, TRX, and other altcoins beyond USDT alone.
USDT Dominates Findings as Tether's CEO Pushes Back
Circle's USDC told a different story in the report. The 24-page study found USDC "extremely limited" in the subcommittee's analysis compared with USDT, raising questions about how issuers police illicit activity.
Tether CEO Paolo Ardoino appeared to wholeheartedly disagree with the report's premise in the company's blog post. According to Tether's CEO, "USDT is not a haven for sanctioned actors, terrorist organizations or criminal networks."
Source: Bitcoin News
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