Senators Raise Concerns Over Tether’s Use in Evading U.S. Sanctions

Senators Elizabeth Warren and Roger Marshall have raised concerns about the potential use of Tether’s stablecoin by Russia, Iran, and North Korea to evade U.S. sanctions. According to a report by The Wall Street Journal, the senators have written to various government departments seeking clarification on this issue.

The senators’ letters highlight how the USDT stablecoin, which is pegged to the U.S. dollar, may have been used by Russian companies to sidestep sanctions and procure components for drones and other equipment from foreign sources. This has prompted questions about whether the Department of Defense and the Biden administration support the Treasury Department’s push for enhanced regulatory powers.

Deputy Treasury Secretary Wally Adeyemo has previously emphasized the need for Congress to approve new measures in response to the growing use of cryptocurrencies by entities like Hamas, North Korea, and the Russian military-industrial complex. Tether has assured authorities of its cooperation and willingness to freeze wallets associated with organizations using the stablecoin to evade sanctions.

In a recent development, Tether officials have pledged to block addresses sanctioned by the Office of Foreign Assets Control (OFAC) after reports emerged that Venezuela’s state oil company was utilizing the USDT stablecoin to bypass U.S. restrictions. These actions underscore the ongoing efforts to prevent illicit use of cryptocurrencies in circumventing international sanctions.