Democratic staff members of the U.S. Senate’s Permanent Subcommittee on Investigations (PSI) published a study on the use of the USDT stablecoin in financial transactions linked to Iran and sanctioned entities.
The report was released on September 28, 2026, by Senator Richard Blumenthal, the senior Democrat on the PSI. It is important to note that the report’s findings represent the position of the subcommittee’s Democratic investigators and do not constitute a judicial determination of wrongdoing on the part of Tether.
The authors conducted a blockchain analysis of 846 cryptocurrency wallets that had been included on U.S. or Israeli sanctions lists or were subject to confiscation measures due to alleged ties to Iran and its regional entities.
According to the investigation, 84% of the wallets examined used USDT exclusively or almost exclusively. The authors assert that the stablecoin has become one of the primary tools for moving funds within the Iranian-linked shadow financial infrastructure.
The report also asserts that such transactions were used by entities linked to the Central Bank of Iran, oil operations, and regional organizations.
Blumenthal called on the U.S. Department of the Treasury and the U.S. Department of Justice to investigate possible violations of sanctions and banking laws.
Tether, for its part, claims to be cooperating with U.S. law enforcement agencies. According to Reuters, the company states that in 2026 it froze nearly $550 million in USDT linked to Iran.
The new report may intensify the debate surrounding AML control requirements for stablecoin issuers, particularly as the U.S. is establishing a new federal regulatory framework for this market.
