A report from Democratic staff on the Senate Permanent Subcommittee on Investigations reveals that 846 cryptocurrency wallets linked to Iran and its regional proxies were sanctioned or targeted for seizure, with 84% transacting exclusively or nearly exclusively in Tether’s USDT. Two Iranian oil smugglers, Alireza Derakhshan and Arash Estaki Alivand, moved more than $603 million in USDT between 2021 and 2025 through a network reaching Hizballah, the Houthis and Iranian financial institutions. The report found that Tether did not comprehensively freeze designated wallets before 2024, allowing $34.6 million to continue moving through sanctioned wallets in one case after designation. Tether issued a statement highlighting it froze roughly $550 million across wallets linked to Iran’s central bank in 2026, without directly addressing the report’s findings.
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