US Senate Democrats Report: Tether Becomes Key Channel for Evading Iran Sanctions

TechFlow reports. On September 29, according to CoinDesk, the Permanent Subcommittee on Investigations of the Senate Committee on Homeland Security and Governmental Affairs released a new report accusing stablecoin issuer Tether (USDT) of effectively acting as a "lifeline" for the sanctioned Iranian regime. The report notes that despite stringent financial blockades, USDT has been extensively incorporated into Iran's underground banking network, providing a critical channel for overseas capital flows.

The report estimates that the Iranian government conducted roughly $2 billion in transactions through these crypto asset channels alone last year. In terms of compliance, the report sharply criticized Tether's risk management practices, noting it had "repeatedly failed" to filter out wallet addresses associated with Iran. It pointed out that even when Tether executed freezing actions, the process typically dragged on for weeks, and for a prolonged period before 2024, the company did not systematically investigate or freeze accounts designated by counter-terrorism enforcement agencies.

Highlighting that this lack of deterrence fueled the proliferation of abuse, the report cited that the terrorist group Hamas has shifted its fundraising methods from Bitcoin and other diversified portfolios to actively promoting USDT to exploit its anonymity and low entry threshold. Democratic senators who authored the report warned that failing to immediately strengthen anti-money laundering oversight on stablecoins will allow them to persist as tools for undermining geopolitical sanctions.