Iran’s Islamic Revolutionary Guard Corps (IRGC) is using the USDT stablecoin on the Tron network to create a payment system for its Hormuz operations, placing the transactions outside the reach of United States financial sanctions.
The development escalates the stakes for both Tether, the issuer of USDT, and the Tron blockchain. Blockchain analytics firm Chainalysis previously estimated that over $1.9 billion in illicit transactions were linked to Iranian addresses between 2019 and 2024, highlighting the scale of sanctions evasion even before this direct IRGC link emerged. The U.S. Treasury has demonstrated sophisticated capabilities in tracing blockchain transactions, and any evidence of direct support for a sanctioned entity like the IRGC could invite severe penalties.
For years, Iran has been systematically pushed out of the global financial system by U.S. sanctions targeting its nuclear program and regional activities. Cut off from international banking rails like SWIFT, the nation turned to state-sponsored cryptocurrency mining, converting subsidized energy into borderless digital assets like Bitcoin to purchase imports. The use of USDT on Tron represents a tactical evolution, favoring a low-cost, liquid stablecoin for more direct operational funding over Bitcoin's volatility.
This places Tether and Tron in the direct line of fire of the Treasury's Office of Foreign Assets Control (OFAC). An OFAC designation against the Tron network or key addresses associated with Tether's operations could be catastrophic, potentially requiring all U.S. persons and entities, including major exchanges like Coinbase and Kraken, to freeze associated assets. Such a move would trigger a crisis of confidence in USDT, the crypto market's primary source of liquidity, and reinforce the narrative of crypto as a tool for illicit finance. While diplomatic overtures from Iran's new president have been reported, the market remains skeptical, viewing actions like the IRGC's crypto adoption as a more credible indicator of the country's policy.
This article is for informational purposes only and does not constitute investment advice.
