Senate Report Links Iran's Use of Tether to Drone Procurement and Sanction Evasion

• •Iran is using Tether to evade sanctions and fund military operations.
• •84% of analyzed wallets linked to Iran primarily used Tether for transactions.
• •Senator Blumenthal calls for investigations into Tether's compliance with sanctions.

A U.S. Senate report released on September 28, 2026, reveals that Iran is utilizing the cryptocurrency Tether (USDT) to evade sanctions and procure parts for Shahed drones from Chinese suppliers. The investigation by the Senate Permanent Subcommittee on Investigations, led by Senator Richard Blumenthal, examined 846 cryptocurrency wallets linked to Iran and found that 84% of these wallets predominantly used Tether for transactions. The report indicates that Tether has become a vital financial tool for Iran's shadow banking system, facilitating funding for regional proxies and military hardware. Notably, a $64,000 Tether transfer was traced from a wallet associated with the Iranian financial network to a Chinese supplier of drone components. The report also highlights that two sanctioned Iranian nationals received over $603 million in Tether between 2021 and 2025, with funds funneled through exchanges like Binance and OKX. Tether has stated its commitment to combating illicit finance and has frozen $550 million in USDT linked to Iran this year. The findings call for investigations into Tether for potential sanctions violations.