U.S. Senate Probe Says 87% of Iran Terror-Finance Wallets Primarily Used USDT

A U.S. Senate investigation found that Tether's USDT was widely used in cryptocurrency wallets tied to Iran's sanctions evasion and terrorist financing.

The Block reported on September 29 that investigators led by Senator Richard Blumenthal, the top Democrat on the U.S. Senate Permanent Subcommittee on Investigations, analyzed transactions involving 846 crypto wallets that had been sanctioned or blocked over links to Iran.

According to the report, 87% of 757 wallets identified as being tied to terrorist financing primarily transacted in USDT. The investigators said Iran's financial network relies heavily on USDT and argued that Tether is a key tool in what they described as Iran's "shadow financial system."

The report also said Tether failed to freeze some wallets suspected of links to illicit finance in a timely manner. Blumenthal asked the U.S. Justice Department and Treasury Department to examine whether Tether may have violated sanctions and banking laws.

Tether rejected the criticism the same day, saying it had helped freeze about $550 million worth of USDT linked to Iran over the past year.

Paolo Ardoino, Tether's chief executive officer, said claims that USDT serves as a haven for sanctioned entities, terrorist groups or criminal networks are false. He added that public blockchains make fund flows traceable and allow the company to respond to law enforcement requests.