Interesting report from Sen. Blumenthal (he is a huge crypto skeptic). While the information is accurate, some of it is also very, very out of date. It also does not factor in the GENIUS Act and what it is requiring stablecoin issuers like Tether to do.

The Subcommittee found that, of the wallets identified for seizure by Israel’s NBCTF, 87% of 757 wallets implicated in Iranian terrorism financing had predominantly transacted in USDT (for both the Tron and Ethereum blockchain). Similarly, for wallets designated by OFAC in relation to Iran or Iran-linked terrorist organizations, the Subcommittee found 57% of 101 wallets had predominantly transacted in USDT (see Attachment I). [...] Bitcoin followed far behind in second place, at 7% for NBCTF and 19% for OFAC respectively, more commonly occurring in either the earliest designations or on wallets associated with ransomware operators or large exchanges (which would naturally be handling a broader portfolio on behalf of retail customers).

Tether also has a significant official presence and adoption in the Middle East, making it easier for Iran to purchase USDT in countries like the United Arab Emirates or Türkiye, and then transfer those funds to entities inside of Iran, its proxies, or to purchase items abroad.