Senate Democrats Target Tether Over Iran Sanctions Evasion

The preliminary report, released September 28, alleges that Tether’s infrastructure has become a hub for financial flows supporting the Islamic Revolutionary Guard Corps, Hezbollah, and the Houthis. By analyzing blockchain data from June 2021 through August 2026, staff found that 87% of wallets flagged by Israel’s National Bureau for Counter Terror Financing transacted at least 80% of their volume in USDT. The findings prompted Senator Richard Blumenthal to demand that the Treasury Department and the Department of Justice launch a formal investigation into Tether’s anti-money-laundering controls and sanctions compliance.

Tether has pushed back against the characterization, maintaining that its platform is not a haven for illicit actors. CEO Paolo Ardoino stated that the company has supported the freezing of nearly $550 million in Iran-linked assets throughout 2026, including major actions targeting the Central Bank of Iran. According to Tether, it works closely with agencies such as the FBI, Secret Service, and Homeland Security Investigations, having participated in over 2,900 investigations globally. The company claims these efforts have resulted in the freezing of $4.9 billion in assets across various criminal and sanctions-related cases, though the Senate report questions the speed and efficacy of these blacklisting efforts regarding specific Iran-linked accounts.