Investigating Tether's Impact on Nations Avoiding International Sanctions: Senate Inquiry Focuses on Cryptocurrency's Role
In a significant development, Tether, one of the leading stablecoin issuers, has found itself at the centre of a growing concern regarding its use in evading international sanctions. This comes after reports of North Korea, Hamas, the Russian military-industrial complex, and even the state oil corporation of Venezuela using Tether's USDT stablecoin for such purposes.
The Deputy Representative of Tether made a statement that Congress might need to adopt new powers due to the active use of cryptocurrencies by these entities. This statement was made in light of the US government's measures to freeze certain Tether holdings on some blockchains, as of September 2025, reflecting regulatory actions to control potential misuse.
Tether has affirmed its readiness to work with US authorities to prevent the use of its stablecoin for evading sanctions. This commitment includes blocking wallets linked to companies using the stablecoin to bypass sanctions, a decision that was partly influenced by media reports about the state oil corporation of Venezuela evading US sanctions using the USDT stablecoin.
The Office of Foreign Assets Control (OFAC) has sanctioned addresses that Tether has pledged to block. This action is a response to the Senators' inquiries, which focused on the potential use of Tether's USDT stablecoin by Russia, Iran, and North Korea to evade US sanctions.
The letters written by Senators Elizabeth Warren and Roger Marshall were based on information provided by The Wall Street Journal (WSJ) and government documents. They were directed to various departments, although specific details about these departments were not provided. The Senators' inquiries indicate a concern about the potential use of cryptocurrencies, specifically Tether's USDT stablecoin, in evading international sanctions.
The Senators' letters also question whether the Joe Biden administration and the Department of Defense agree with the Treasury Department's request for further authority in light of this development. The specific nature of the Treasury Department's request for further authority was not detailed in the paragraph.
Reports suggest that Russian enterprises have used Tether's USDT stablecoin to buy drone and other equipment components overseas, potentially evading sanctions. This use could be a means of circumventing international sanctions, as these transactions are difficult to trace and can be conducted anonymously.
In response to these concerns, Tether has declared its readiness to collaborate with US authorities to ensure the integrity and legitimacy of transactions using its stablecoin. This collaborative approach underscores the importance of transparency and accountability in the rapidly evolving world of cryptocurrencies.
