Tether Faces U.S. Scrutiny Tether is under investigation by the U.S. Senate for allegedly facilitating sanctions evasion through the use of USDT by Iran-linked networks to transfer funds. The focus of the scrutiny is on the company’s anti-money laundering and sanctions compliance measures. Democratic investigators from the Senate Permanent Subcommittee on Investigations released a report analyzing 846 wallets sanctioned or flagged for seizure due to links with Iran and its regional proxy organizations. The report found that 84% of these wallets conducted transactions entirely or almost entirely using USDT. The U.S. has long sought to restrict Iran’s financial channels by limiting access to banks and dollar settlements. However, these networks have still managed to transfer funds across borders using USDT. This provides Iran with a highly liquid and widely accepted payment channel outside the traditional banking system—one that is still predominantly dollar-based. As the issuer, Tether has the ability to freeze USDT. The investigation is further probing whether the company has promptly identified and frozen wallets that have been sanctioned or are credibly linked to illicit funds. Senator Blumenthal has called on the U.S. Treasury and Department of Justice to investigate further. Tether responded the same day, stating that the company has always cooperated with law enforcement. In 2026, it assisted in freezing approximately $550 million worth of USDT linked to Iran, involving wallets identified by U.S. authorities as connected to Iran’s central bank and sanction-evasion networks. One @Gate, trade more markets.