In a letter to various government departments, US Senators raised concerns about the potential use of Tether's stablecoin by countries like North Korea, Iran, and Russia to bypass US sanctions.

Senators Elizabeth Warren and Roger Marshall repeatedly questioned the Biden administration about the possibility of Russia, Iran, and North Korea using USDT stablecoin for sanction evasion. The Wall Street Journal (WSJ) reported this, backed by government documents.

Russian businesses reportedly used the USDT stablecoin, which is pegged to the US dollar, to purchase drone and other equipment components from overseas, thus circumventing sanctions.

There are doubts about whether the Biden administration and the Department of Defense support the Treasury Department's request for additional authority following these revelations.

In April, Wally Adeyemo, the Treasury's deputy secretary, mentioned that Congress might need new powers due to the increasing use of cryptocurrencies by North Korea, Hamas, and the Russian military-industrial complex.

Tether has signaled its cooperation with US authorities and willingness to freeze wallets associated with companies exploiting the stablecoin to avoid sanctions. They have also committed to blocking OFAC-sanctioned addresses. Reports emerged that Venezuela's state oil corporation is using USDT to evade US sanctions.