Senate Democrats Claim Tether Serves as Financial Lifeline for Iran
Senate Report Links Stablecoin to Sanctions Evasion
Democrats on the Senate's Permanent Subcommittee on Intelligence released a report on Monday alleging that Tether, a stablecoin pegged to the US dollar, has become a critical tool for the Iranian government. The report argues that the digital asset allows Iran to bypass international sanctions and conduct transactions outside traditional banking systems.
The document describes Tether as a "significant financial lifeline" within Iran's shadow banking network. It claims that the Iranian government made an estimated $2 billion in transactions using the stablecoin last year, although the report does not provide a total sum for all historical usage.
Criticism of Compliance Measures
- The report accuses Tether of repeatedly failing to block wallets connected to Iran.
- It states that prior to 2024, the company did not consistently freeze wallets designated by counter-terrorism agencies.
- The authors claim this lack of action encouraged terrorist organizations like Hamas to shift from Bitcoin to Tether.
- The report notes that when freezes do occur, they can take weeks to process.
- It also alleges that Tether sometimes responds to requests without actually blacklisting the wallets involved.
Tether Responds to Allegations
In response to the report, Tether published a blog post on Monday stating it has supported nearly $550 million in freezes related to Iran. The company said these actions were taken at the request of U.S. authorities.
Paolo Ardoino, the CEO of Tether, stated in the post that the company coordinates regularly with authorities globally to identify and freeze illicit funds as governments work to stop sanctions evasion.
Broader Implications for Crypto Regulation
The Senate report frames the issue as a wider problem for the cryptocurrency sector. It asserts that digital currencies are actively undermining efforts by the United States and its allies to prevent regional terrorism by the Islamic Republic.
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