- Senator Richard Blumenthal, ranking member of the Senate Permanent Subcommittee on Investigations, released a report finding that 84% of 846 sanctioned wallets linked to Iran and its proxies transacted exclusively or nearly exclusively in USDT
- The report says Tether did not comprehensively freeze designated wallets prior to 2024, and notes that Cantor Fitzgerald, tied to Commerce Secretary Howard Lutnick, owns 5% of Tether and holds a substantial share of its U.S. assets
- Blumenthal said in the report that “the prospect of such a financial weapon being used against American interests is deeply troubling”
Senator Richard Blumenthal, ranking member of the Senate Permanent Subcommittee on Investigations, published a report titled “Blumenthal Releases PSI Report Detailing How Lutnick-Linked Crypto Firm Tether Props Up Iran’s Shadow Banking System” on his official Senate website on September 28, 2026.
The report’s central finding, drawn from wallet-level analysis, is that of 846 sanctioned wallets linked to Iran and its regional proxies, 84% transacted exclusively or nearly exclusively in Tether’s USDT stablecoin, rather than in other cryptocurrencies or traditional banking channels. The subcommittee’s review also found that prior to 2024, Tether did not comprehensively freeze wallets that had been designated by U.S. sanctions authorities, which the report says created a permissive environment in which sanctioned actors could continue transacting.
The report also draws attention to Tether’s ownership structure, noting that Cantor Fitzgerald, the financial firm connected to Commerce Secretary Howard Lutnick, owns a 5% stake in Tether and holds a substantial portion of the more than $100 billion in U.S. assets the company reports holding. Blumenthal used the finding to question the Trump administration’s enforcement posture toward the crypto industry more broadly, saying in the report that “investigations and enforcement actions into the cryptocurrency industry have been dropped, settled on meager terms, or even reversed.”
In direct comments included in the release, Blumenthal said “Tether and its flagship token have become central to Iran’s shadow banking system, allowing the Iranian government to fund its regional proxies” and evade sanctions regimes, and warned that “the prospect of such a financial weapon being used against American interests is deeply troubling.”
The report lands amid a broader, ongoing debate in Washington over how aggressively stablecoin issuers should be required to monitor and freeze sanctioned wallets, and whether existing compliance practices, even ones adopted more recently by Tether, are sufficient given the scale of USDT’s usage in illicit finance corridors. Tether has pointed to its own more recent sanctions-compliance record in response to similar scrutiny, and the contrast between the subcommittee’s historical findings and Tether’s current freeze activity is likely to remain a point of dispute between the company and its congressional critics as the debate over stablecoin oversight continues.
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