Tether CEO Paolo Ardoino has pushed back against a recent Senate report, asserting that the company proactively freezes cryptocurrency addresses linked to Iran, often weeks before official designations by U.S. and Israeli authorities. Ardoino claims these actions are responsible for a significant drop in Iran-related stablecoin volumes.
Proactive Freezes Amidst Senate Scrutiny
Tether’s response comes in the wake of a report by the Democratic staff of the Senate Permanent Subcommittee on Investigations, titled “Tethered to Terrorism.” The report examined 846 wallets sanctioned or targeted for seizure due to alleged links to Iran and its proxies between June 2021 and August 2026. It found that 84% of these wallets transacted exclusively or almost exclusively in USDT, Tether’s flagship stablecoin.
Ardoino stated that Tether freezes such addresses, on average, four weeks before they are officially designated by the U.S. Office of Foreign Assets Control (OFAC) and Israel’s National Bureau for Counter Terror Financing (NBCTF). He further claimed that Tether freezes 99% of reported addresses before blockchain analytics firm Chainalysis labels them. The company has not publicly disclosed the specific measurement period, baseline data, address set, or asset scope used for its volume decline calculations.
Disputed Timing and Specific Case
In an X post, Ardoino directly challenged Senator Richard Blumenthal’s interpretation of the Senate findings. He clarified that his “four-week average” refers to the timeframe between Tether’s internal freezes and official OFAC or NBCTF designations, while the “99% figure” relates to Tether’s actions relative to Chainalysis labels.
However, the Senate report highlights a case that appears to complicate Tether’s narrative of early intervention. In June 2023, Israel’s NBCTF designated 39 wallets linked to Hezbollah financier Tawfiq Muhammad Sa’id Al-Law. According to the report, Tether froze only five of these wallets, while the remaining 34 remained active until March 2024, during which time over $34.6 million in USDT moved through them.
The Senate report acknowledged Tether’s responsiveness to designations “in some instances” since late 2023 but characterized its overall efforts as inconsistent. The findings emphasize both the prevalence of USDT in these wallets and the timing of Tether’s actions, pointing to continued transfers in specific cases even after designations.
Tether’s Disclosure and Market Context
In a separate disclosure on September 28, Tether reported supporting the freeze of nearly $550 million in Iran-linked USDT during 2026. This total included over $344 million from two addresses in April and more than $130 million from four wallets in July, with the remaining approximately $76 million not itemized.
The Senate’s 84% figure, the report clarifies, represents the proportion of its analyzed wallets that predominantly used USDT, not a statistic on freeze timing. Tether’s claims about stablecoin volume declines pertain to Iran-linked activity, a distinction crucial for understanding the issuer’s role in cross-border payments and the visibility of wallet activity to analytics firms.
Industry estimates from TRM Labs suggest Iranian cryptocurrency volumes at around $11.4 billion in 2024 and $10 billion in 2025, indicating a broader market decline of approximately 12%. With USDT’s market capitalization around $183 billion, according to CoinGecko, Tether’s claimed reduction in Iran-linked activity carries significant weight for compliance scrutiny. The company’s approach to regulatory compliance controls remains a central point of contention in this dispute.
Senator Blumenthal, the ranking member of the subcommittee, has referred the report’s findings to the Treasury and Justice departments, urging them to consider potential sanctions and violations of banking laws, including the International Emergency Economic Powers Act and the Bank Secrecy Act. The immediate institutional question is whether these departments will act on the referral. The report also noted that Tether had confirmed receipt of the subcommittee’s June letter but had not responded to it by the time of publication.
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