Iran's Central Bank Amassed $507m in Tether Cryptocurrency to Evade Sanctions
Iran's central bank has been systematically accumulating vast quantities of Tether stablecoins, according to a new report from blockchain analytics firm Elliptic. The findings suggest the regime is using the cryptocurrency to bypass international sanctions and potentially prop up its struggling national currency.
Sophisticated Strategy to Circumvent Global Banking System
Elliptic's investigation traced at least $507 million (£377 million) worth of Tether stablecoins passing through accounts that appear to be controlled by Iran's central bank. The report details what analysts describe as a "systematic accumulation" of the digital currency, which is pegged to the US dollar to maintain stable value and facilitate easy exchange for hard currency.
This pattern points to what Elliptic calls "a sophisticated strategy to bypass the global banking system," potentially enabling Iran to conduct international trade or support the rial amid severe economic pressures. The revelations come as Iran faces thousands of confirmed deaths following brutal suppression of protests, adding political sensitivity to the financial findings.
Nigel Farage's Tether Advocacy Under Scrutiny
The report raises significant questions for Reform UK leader Nigel Farage, who has championed Tether as part of his cryptocurrency advocacy. In September, Farage revealed plans to raise Tether during a meeting with Bank of England governor Andrew Bailey, describing stablecoins as "the way which money goes from conventional currencies through into cryptocurrencies and back again."
Farage has criticised Bailey for imposing restrictions on cryptocurrency and urged the UK to catch up with the United States, where former President Donald Trump has reversed efforts to police digital currencies. Trump selected Howard Lutnick, Tether's banker, as his commerce secretary, highlighting the cryptocurrency's growing political connections.
"You know, stablecoins, crypto – this world is enormous," Farage told LBC radio. "I've been urging for years that London should embrace it. We should become a global trading centre for this stuff, under proper regulation."
Reform UK Connections and Donor Links
One of Tether's major shareholders, technology investor Christopher Harborne, serves as Reform UK's biggest donor. Harborne's lawyers have stated that their client, who does not hold an executive position at Tether, bears no responsibility for illicit activities by the cryptocurrency's users. They dismissed suggestions that Harborne profits from Iran's use of Tether stablecoins as "baseless drivel."
A spokesperson for Reform UK responded to the revelations by noting that "many companies and organisations across the globe" use Tether. They added: "All donations to Reform UK comply with electoral law and regulations. We stringently vet each donation. We continue to actively support the Iranian people in their fight for freedom."
Booming Demand and Illicit Usage
Tether's stablecoin, known as USDT, has experienced booming demand that has generated enormous returns from the real-currency reserves the company maintains to preserve its dollar peg. The company's $13 billion annual profits now exceed those of fast-food giant McDonald's by one-and-a-half times.
Some of this demand originates from illicit sources. Facing comprehensive US, UN, and other international sanctions that restrict trade, foreign currency acquisition, and banking relationships, Iranians and their government appear to have turned increasingly to Tether's stablecoins.
Last year, Israel revealed dozens of cryptocurrency accounts allegedly used by Iran's Revolutionary Guards. This disclosure prompted a prominent Iranian businessman to complain publicly on social media platform X about the regime's failure to maintain secrecy in its financial dealings. His post included two cryptocurrency account numbers that the businessman claimed were used by Iran's central bank.
Investigative Breakthrough and Ongoing Activity
Through what appears to have been an inadvertent disclosure, Elliptic's researchers identified connections between 50 accounts, concluding with "a high level of confidence" that they were controlled by Iran's central bank. While Tether has frozen the suspected Revolutionary Guards accounts identified by Israel last year, most accounts apparently used by the Iranian central bank remain active.
A Tether representative declined to address specific questions about Iranian central bank usage of its stablecoins but stated: "Tether maintains a zero-tolerance policy toward the criminal use of our financial products." The representative emphasised that Tether follows US sanctions guidelines and collaborates with law enforcement globally.
"We work closely with law enforcement globally to identify and promptly, upon request, freeze assets to prevent further movement whenever they are identified to be in connection to illegal activity or illicit actors," the representative said. They added that Tether has collaborated with more than 310 law enforcement agencies across 62 countries and frozen over $3.4 billion in assets "linked to criminal activity."
