Democratic investigators on the U.S. Senate Permanent Subcommittee on Investigations released a report on Sept. 29 alleging that USDT has become a major financial channel for Iran’s shadow banking system, and urged the Treasury Department and the Department of Justice to investigate whether Tether violated sanctions and banking laws.
Report cites Tether ties to Trump administration figures
The report also described Tether’s connections to the Trump administration. It referenced business dealings between Tether and Cantor Fitzgerald, which is controlled by the family of Commerce Secretary Howard Lutnick, and noted that former White House crypto council head Bo Hines now serves as head of Tether’s U.S. business.
According to the report, the latest filing continues a broader Democratic investigation into the Trump family’s crypto activities.
Series of Democratic inquiries began in 2025
In May 2025, Richard Blumenthal opened an investigation into TRUMP, a dinner for token holders, and World Liberty Financial.
In June that year, Elizabeth Warren and Jeff Merkley asked MGX and Binance to explain why a $2 billion investment was settled using USD1, a stablecoin tied to the Trump family.
In November 2025, Democrats on the House Judiciary Committee released a report accusing the Trump family of profiting through crypto ventures including WLFI and TRUMP. That report described deregulation, the ending of enforcement actions, and pardons for related individuals as transfers of benefit. It said the Trump family’s crypto holdings were worth as much as $11.6 billion, and that related income in the first half of 2025 exceeded $800 million.
Probe expanded in 2026 to WLFI, Tether and Binance
After entering 2026, Ro Khanna examined whether a reported purchase of a 49% stake in WLFI by members of the UAE royal family for $500 million had any link to U.S. policy on AI chips for the UAE.
Warren and Ron Wyden then looked into a reported loan from Tether to a beneficial trust for Lutnick’s children.
In June, Adam Schiff, Warren and Blumenthal also tied Binance’s alleged Iran-linked fund flows to WLFI, USD1 and Trump’s pardon of CZ.
Across those inquiries, the central thread has been Democrats repeatedly linking the Trump family’s crypto business to conflicts of interest, foreign money, regulatory easing and national security concerns.
Tether response
Tether said it continues to cooperate with law enforcement and has helped freeze about $550 million in Iran-related USDT in 2026. The company added that USDT is not a safe haven for sanctioned entities, terrorist organizations or criminal networks.