An investigation by the US Senate Permanent Subcommittee on Investigations, reported by the Wall Street Journal, has found that 84% of more than 800 crypto wallets sanctioned for links to Iran operated almost exclusively in Tether's USDT stablecoin. The finding places renewed scrutiny on the world's largest stablecoin issuer just as Washington tightens its regulatory grip on the sector.
The subcommittee's report estimates that the Central Bank of Iran accumulated at least $507 million in USDT, and describes flows reaching proxies including Hezbollah. Democratic senator Richard Blumenthal of Connecticut, the panel's ranking member, wrote to Tether in June demanding documents on USDT's role in Iranian and Russian shadow banking networks.
Tether responded to the findings by detailing its own enforcement record. The company says it has helped freeze approximately $550 million in USDT linked to the Iranian central bank and sanctioned networks since the start of the year, including more than $344 million frozen in April across two Tron addresses tied to the Central Bank of Iran, and a little over $130 million frozen in July across four other Tron wallets, that action coordinated with the US Treasury.
Across its history, Tether says it has frozen more than $4.9 billion in assets and has supported more than 2,900 investigations worldwide, over 1,600 of them in the United States, working with more than 340 agencies across 67 countries.
Ardoino defends transparency of public blockchains
Tether chief executive Paolo Ardoino defended the traceability of blockchain transactions as a tool for law enforcement. "Les blockchains publiques donnent aux autorités une visibilité sur les mouvements de fonds qui n'existe tout simplement pas avec le cash, et Tether peut agir dès que les forces de l'ordre fournissent une information crédible," Ardoino said.
The scrutiny comes as USDT circulation exceeds $180 billion and as Tether reported more than $13 billion in profits for 2024. Chainalysis has estimated that stablecoins accounted for 63% of illicit on-chain volumes in 2024, a figure that underscores why sanctions investigators keep returning to dollar-pegged tokens rather than other crypto assets.
The regulatory backdrop has also shifted. The GENIUS Act, signed into law in July 2025, requires stablecoin issuers operating in the United States to be able to freeze tokens on request from authorities. Tether has since launched USAT, a US-market stablecoin issued via Anchorage Digital Bank, which the company says is aligned with the new federal framework.
For European regulators and exchanges monitoring MiCA compliance, the Senate findings add a fresh data point to an ongoing debate over how dollar-pegged stablecoins are used to route sanctioned funds, and how quickly issuers can act once flagged.
