Tether says it helped freeze nearly $550 million in Iran-linked USDT during 2026, while Democratic investigators on a Senate subcommittee allege that delays in blacklisting some identified wallets let tens of millions of dollars keep moving.

A preliminary report released Sept. 28 by Democratic minority staff of the Senate Permanent Subcommittee on Investigations analyzed 846 crypto wallets that US or Israeli authorities had sanctioned or targeted for seizure over their associations with Iran and regional groups. The report said 84% transacted exclusively or nearly exclusively in USDT .

Sen. Richard Blumenthal, the Connecticut Democrat and ranking member of the subcommittee, referred the findings to the Treasury and Justice departments and asked them to investigate Tether's anti-money laundering and sanctions compliance.

The referrals do not establish that Tether violated federal law or that either department has opened a new case.

Tether published its own statement the same day, saying actions involving USDT had resulted in approximately $550 million being frozen across wallets that US authorities identified as connected to Iran's central bank and Iranian sanctions networks.

The Senate report's 84% figure describes a selected population.

Investigators assembled the sample from wallets identified by the Treasury Department's Office of Foreign Assets Control and Israel's National Bureau for Counter Terror Financing as associated with Iran or regional groups. The dataset covered over five years of designations through August 2026.

For its analysis, the Senate report defined a wallet as transacting “predominantly” in a digital currency when that asset represented more than 80% of the dollar value of its aggregate transactions.