Tether and Senate Democrats Clash Over Iran's Shadow Crypto Network

Senate Report Examines 846 Crypto Addresses Linked to Iran

Following the WSJ report, the underlying document published by the Permanent Subcommittee on Investigations was released and is now public. The report is dubbed “Tethered to Terror: Crypto & Iran’s Shadow Banking Network,” and the study was promoted by Sen. Richard Blumenthal (D-CT). The analysis parses 846 distinct crypto addresses that are sanctioned by the U.S. or Israel, specifically wallets with ties to Iran or Iran-backed groups.

The report claims that tether ($USDT) is Iran’s primary crypto payment rail, and some of the wallets even have Central Bank of Iran (CBI) ties. The authors argue that $USDT stands at the middle of several networks that reportedly connect Iranian oil proceeds, and settlements to Hezbollah, the Houthis, and Hamas. The subcommittee believes that Tether is too slow to freeze and argues that this provides a “permissive environment.”

Tether Counters Accusations With $550 Million in Iran-Linked Freezes

On the same day, Tether published a report of its own. Tether’s blog post discusses Treasury Secretary Scott Bessent revealing Operation Economic Outcast, and the stablecoin issuer insisted that the company is “fully committed to supporting global efforts against illicit finance.”

Tether then highlighted several freeze occurrences where the company worked with law enforcement officials to stop illicit flows. Additionally, Tether said it works with Israel’s National Bureau for Counter Terror Financing (NBCTF).

“Together, those actions amount to approximately $550 million in Iran-linked $USDT frozen in 2026 alone,” the company claims.

$USDT Dominates Findings as Tether CEO Rejects Report’s Premise

The subcommittee’s analysis also notes that in addition to $USDT, Iran-based groups are also leveraging bitcoin (BTC), ether (ETH), TRX, and other altcoins. Circle’s $USDC stablecoin was a different story, the report details.

“$USDT’s largest competitor, $USDC—the dollar-pegged stablecoin issued by the second-largest stablecoin issuer Circle—was extremely limited in the Subcommittee’s analysis,” the 24-page study declares.

While the report does discuss bitcoin, other altcoins, and stablecoins, it is largely focused on Tether’s $USDT stablecoin. In the company blog post posted on Monday morning, Tether’s CEO Paolo Ardoino appeared to wholeheartedly disagree with the report’s premise.

“Tether has consistently demonstrated that $USDT is not a haven for sanctioned actors, terrorist organizations or criminal networks,” Ardoino insisted in the Tether blog post.