A US Senate investigation has flagged extensive use of Tether’s USDT among Iran-linked sanctioned wallets. Investigators examined 846 wallets identified by US and Israeli authorities and found that 87% used USDT almost exclusively.
The Senate Permanent Subcommittee on Investigations linked the activity to potential sanctions evasion. It also examined possible financing routes involving Iran’s proxy networks and illicit oil activity, putting renewed attention on how stablecoins are used in sanctioned markets.
USDT Dominates Iran-Linked Crypto Activity
Investigators traced much of the activity through Tron, where USDT is widely used for fast settlement and liquidity. The findings were also shared with the Justice Department and Treasury Department.
Related: Supreme Court Declines to Halt UPI Charges, “Free” Payments in Question
In a separate case, the DOJ sought to forfeit about $61.2 million in USDT linked to 10 Tron addresses. The transactions covered the period from late 2024 through March 2025. The funds had already been frozen by Tether before the forfeiture case was filed.
Chainalysis estimates Iran’s crypto ecosystem exceeded $7.78 billion in 2025. IRGC-linked addresses accounted for more than half of Iranian crypto activity during the fourth quarter.
Tether Faces Closer Compliance Scrutiny
The Senate findings do not establish that Tether knowingly enabled sanctions evasion. Tether can freeze balances held by sanctioned wallets when authorities identify them.
Still, the findings could increase pressure on stablecoin issuers, exchanges and custodians to strengthen sanctions screening.
Related: South Korea’s FSC Considers Crypto Market Makers After JPYC Surge
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