Senate Democrats found 84% of more than 800 sanctioned Iran-linked crypto wallets used Tether’s USDT exclusively or predominantly. The same day, Tether said it has helped freeze about $550 million in Iran-linked USDT this year.
USDT is a stablecoin, a digital token pegged one-to-one to the US dollar. Tether, the company that issues it, can lock any wallet holding it.
What Senate Democrats Say About Tether and Iran
The findings come from Democrats on the Senate Permanent Subcommittee on Investigations (PSI), led by ranking member Sen. Richard Blumenthal. The Wall Street Journal first reported them.
Investigators called USDT a primary payment tool for Tehran. They said it also turned up in networks funding Iran-backed groups, including Hezbollah.
In a June letter, Blumenthal said sanctioned Iranian exchanges still dealt heavily in USDT. He asked whether Tether had ever refused requests to block illicit wallets.
The pressure matches Treasury’s push. In August, it launched Operation Economic Outcast, naming digital assets among five Iranian sectors facing sanctions.
How Tether Says Its Freezes Answer the Senate
Tether’s statement cites two actions. In April, it froze $344 million in two wallets. The Office of Foreign Assets Control (OFAC), which runs US sanctions, then tied both to Iran’s central bank.
In July, Tether froze more than $130 million in four wallets on Tron, a low-cost blockchain network. BeInCrypto reported then that the Tether kill switch acted within hours of OFAC’s listing.
“Public blockchains provide authorities with a level of visibility into the movement of funds that simply does not exist with cash, and Tether can act when credible information is provided by law enforcement,” read an excerpt in the statement, citing Tether CEO, Paolo Ardoino.
Where the Senate and Tether Figures Differ
The two numbers measure different things. The Senate’s 84% counts wallets after they were sanctioned. Tether’s $550 million counts funds it froze once authorities named wallets.
Tether’s own math also leaves a gap. Its two named freezes total about $475 million, and the release does not itemize the remaining $75 million.
Neither Tether’s release nor the Senate findings, as reported, say how much USDT moved through the wallets before the freezes. That is the record Blumenthal has demanded from Tether.