Breaking sanctions and laundering $10 billion... US Congress investigates Tether over alleged Iranian USDT misuse

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The U.S. Congress has launched a full-scale investigation following allegations that Iran extensively utilized Tether's USDT to circumvent U.S. sanctions.

According to financial media outlet Benzinga on September 28 (local time), members of the U.S. Senate Banking Committee have detected signs that entities linked to the Iranian regime have misused billions of dollars worth of USDT for illicit transactions and money laundering. They have demanded a thorough investigation from the Treasury Department and the Department of Justice. It is pointed out that Iran, which has been expelled from the global financial network, has exploited the liquidity and anonymity of stablecoins pegged one-to-one with the dollar to settle oil payments and fund weapons purchases.

The congressional investigative team presented tracking data from major blockchain analysis platforms as evidence. According to the team, USDT transactions between virtual asset wallet addresses connected to Tehran have exceeded $10 billion over the past year. In particular, it is analyzed that multi-stage mixing techniques involving unofficial exchange networks in the Middle East and offshore cryptocurrency exchanges were employed to hinder transaction tracking and neutralize the sanctions network.

Congress also sharpened its focus on Tether, the stablecoin issuer's compliance framework and transaction monitoring obligations. Senate members are intensively questioning whether Tether has taken sufficient on-chain monitoring and wallet freezing measures to prevent terrorist financing and sanctions evasion. In response, Tether maintains its stance that it is working closely with law enforcement agencies in various countries to block suspicious addresses and is doing its best to comply with regulations.

This Senate investigation is expected to have a powerful impact on discussions regarding comprehensive stablecoin and virtual asset regulation bills, which are currently pending a vote in the U.S. Congress. The call for applying strict bank-level anti-money laundering (AML) regulations to stablecoin issuers to block illicit financial flows that threaten national security is rapidly gaining momentum.

[Key Article Summary]

-The U.S. Senate has launched a formal investigation into allegations of the Iranian regime circumventing sanctions and illicitly using billions of dollars worth of USDT.

-Evidence has been found that Iran-linked wallets laundered approximately $10 billion through unofficial networks in the Middle East and offshore exchanges.

-As accountability for transaction monitoring is raised against issuer Tether, the level of national security control in stablecoin regulation bills is expected to be significantly strengthened.

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