Tether CEO Paolo Ardoino has pushed back against U.S. Senate criticism, claiming the company froze cryptocurrency addresses linked to Iran an average of four weeks before they received official designations from the U.S. Office of Foreign Assets Control (OFAC) and Israel’s National Bureau for Counter Terror Financing (NBCTF). He also said these actions contributed to a 94% reduction in Iran-related stablecoin transaction volumes.
The statements are part of Tether’s response to a Senate investigation. However, the company has not released the measurement period, baseline data, wallet sample or asset coverage supporting its claimed decline in transaction volumes. Ardoino also maintained that Tether froze the addresses reported to the company.
In a post on X, Ardoino challenged Senator Richard Blumenthal’s reading of the investigation’s findings. His claim of acting four weeks earlier refers to the average time between Tether freezing an address and its subsequent official designation by OFAC or NBCTF. A separate 99% figure cited by Ardoino concerns the timing of the company’s actions relative to labels assigned by blockchain analytics firm Chainalysis.
The report, titled Tethered to Terrorism, was released on September 28 by Democratic staff of the Senate Permanent Subcommittee on Investigations. It reviewed 846 cryptocurrency wallets sanctioned or targeted for seizure because of suspected connections to Iran and its affiliated groups between June 2021 and August 2026. The report found that 84% of the wallets conducted transactions exclusively or almost exclusively in USDT.
One example in the investigation challenges Tether’s account of its enforcement efforts. In June 2023, Israel’s NBCTF designated 39 wallets linked to Hezbollah financier Tawfiq Muhammad Sa’id Al-Law. Tether froze five wallets, but the remaining 34 continued operating until March 2024. More than $34.6 million in USDT reportedly moved out of those addresses during the intervening period.
The Senate report acknowledged that Tether had acted on official designations in certain cases since late 2023. Nevertheless, it described the company’s broader enforcement record as inconsistent. The findings examine both the reliance on USDT among the wallets investigated and the timing of individual freezes, highlighting a gap between Tether’s general defense and the continued transactions documented in the specific case.
Tether Says It Helped Freeze Nearly $550 Million in Iran-Linked USDT
In a separate disclosure published on September 28, Tether reported supporting freezes involving nearly $550 million in USDT associated with Iran during 2026. The total included more than $344 million across two addresses in April and over $130 million across four wallets in July. Tether did not provide a detailed breakdown of the remaining approximately $76 million.
The Senate’s finding that 84% of the examined wallets relied almost exclusively on USDT measures the stablecoin’s use within the sample, not the speed of Tether’s enforcement actions. Likewise, the company’s reported 94% reduction concerns Iran-related stablecoin transaction volumes. These distinctions are important when assessing the issuer’s role in cross-border payments and its ability to restrict activity involving flagged addresses.
Blockchain analytics firm TRM Labs estimated Iran’s overall cryptocurrency transaction volume at approximately $11.4 billion in 2024 and $10 billion in 2025, a decline of around 12%. CoinGecko, meanwhile, placed USDT’s market capitalization at approximately $183 billion.
These broader figures add context to the debate over Tether’s compliance claims. Given USDT’s substantial market presence, the effectiveness and consistency of its enforcement measures remain central questions for regulators examining the use of stablecoins in potentially illicit financial activity.
Treasury and Justice Departments Face Calls for Further Review
Senator Richard Blumenthal, the subcommittee’s ranking member, referred the investigation’s findings to the U.S. Treasury and Justice departments. The referral calls for officials to assess potential violations of sanctions and banking laws, including the International Emergency Economic Powers Act and the Bank Secrecy Act.
Whether either department initiates further action is now a key question. The Senate report also stated that Tether had acknowledged receiving a letter from the subcommittee in June but had not responded by the time the report was released.
