[U.S. Senate Investigation Points to USDT as a Key Liquidity Channel for Iran's Shadow Banking; Gulf VASPs Face Higher Sanction Risks] Odaily Planet Daily News – A report from the U.S. Senate Permanent Subcommittee on Investigations (PSI) identifies stablecoins, particularly USDT, as a critical liquidity channel supporting Iran's shadow banking system. Licensed Virtual Asset Service Providers (VASPs) in the Gulf Cooperation Council (GCC) region face increased compliance pressure regarding sanctions and must enhance wallet attribution identification and counterparty assessments. Soham Jethani, a partner at the law firm Septten, stated that merchants converting crypto assets into local fiat currency does not necessarily mean they can evade sanction risks. Liability may involve designated entities, provision of funds or economic resources, and asset handling within the transaction chain, potentially arising before final settlement by banks. Jethani emphasized that the name of a stablecoin or its denominated currency does not determine legal ownership; specific rights depend on contractual arrangements and actual payment processes. Globally circulating stablecoins may also pose secondary sanction risks. Indirect or historical wallet associations do not automatically constitute violations but require judgment based on applicable regulations, transaction participants, and specific facts. In regulated markets like the UAE, wallets operated by licensed exchanges are continuously monitored, and related funds can be frozen before consumer settlement. Merchants are also required to complete KYC procedures. Regulated VASPs handling deposits and withdrawals bear responsibility for counterparty and sanction risk assessments, as well as implementing corresponding controls. (Bitcoin.com News)