Tether CEO Disputes Senate Democrats’ Findings on Iran-Linked USDT
Tether CEO Paolo Ardoino says the company froze Iran-linked crypto addresses an average of four weeks before U.S. or Israeli authorities officially designated them. But a September 2026 report by Democratic staff of the Senate Permanent Subcommittee on Investigations cites wallets that remained unfrozen for months, while more than $34.6 million in USDT left them.
- Ardoino’s four-week average and claimed 94% decline have no public methodology in the information available.
- Senate Democratic staff found 84% of a selected 846-wallet sample used USDT exclusively or nearly exclusively.
- In one case, 34 wallets were not frozen until March 2024; more than $34.6 million in USDT left them in the interim.
- Senator Richard Blumenthal referred the findings to Treasury and Justice for consideration, not as proof of wrongdoing.
Ardoino’s defense, and the missing details
Ardoino disputed Senator Richard Blumenthal’s reading of Tethered to Terrorism, published on September 28, 2026, by Democratic staff of the Senate Permanent Subcommittee on Investigations. He said Tether froze reported addresses an average of four weeks before official designations by the U.S. Office of Foreign Assets Control (OFAC) or Israel’s National Bureau for Counter Terror Financing (NBCTF).
Tether has not said publicly which addresses were included, what period the average covers, or how it was calculated. That makes it impossible to tell how the figure treats cases involving multiple designations or to compare it systematically with the report’s individual examples.
Ardoino also attributed a 94% decline in Iran-linked stablecoin volumes to Tether’s actions. Tether has not published the measurement period, baseline, address set or asset scope behind the figure. Without those details, the claim cannot be independently checked or confidently linked to the freezes.
Ardoino separately said Tether froze reported addresses before Chainalysis labelled them in 99% of “these transactions.” The denominator and calculation are unclear, as is what the labels refer to. The comparison does not show whether governments or other analysts already knew about an address.
A token issuer’s freeze and a government designation are different actions. Tether can restrict USDT held at a particular address, while a government designation is an official listing. A comparison of timing alone does not show what information Tether had or whether it acted consistently in every case.
What the Senate staff report examined
The report examined 846 wallets sanctioned or targeted for seizure over alleged links to Iran and its proxies between June 2021 and August 2026. It found that 84% transacted exclusively or nearly exclusively in USDT, Tether’s dollar-pegged stablecoin.
That figure covers USDT use among the 846 wallets in the report’s selected sample. It does not measure USDT’s share of Iran’s total crypto activity or the number of wallets across Iran that use the token. Wallet counts also say nothing about transaction value or volume.
The report said Tether had responded to designations “in some instances” since late 2023, but described the company’s overall response as “uneven and inconsistent.” Its most specific example involved 39 wallets associated with Tawfiq Muhammad Sa’id Al-Law, described as a Hezbollah financier. Israel’s NBCTF designated the wallets in June 2023.
According to the report, Tether froze five of the 39 wallets. It did not freeze the USDT at the other 34 addresses until March 2024. More than $34.6 million in USDT left those addresses in the meantime. The report does not explain why Tether waited to freeze them or whether the case is included in Ardoino’s four-week average.
The case sits uneasily with Tether’s average-timing claim, but it does not, on its own, disprove an overall average. The public information includes neither the data behind that average nor a case-specific explanation for the delay. Individual decisions matter: an average can hide both early action and long gaps.
Tether’s reported 2026 freeze total
In a disclosure dated September 28, 2026, Tether said it had supported freezes of nearly $550 million in Iran-linked USDT during the year. The company listed more than $344 million across two addresses in April and more than $130 million across four wallets in July. It did not break down the remaining amount needed to match the reported total.
Tether said it had “supported” the freezes, but the available disclosure does not specify who carried out each restriction or what role Tether played in every case. The figures also do not show whether the funds were recovered, remain permanently unavailable or represent losses prevented.
Broader market figures offer context, but they do not verify Tether’s 94% claim. TRM Labs estimated Iranian crypto volume at about $11.4 billion in 2024 and $10 billion in 2025, a decline of roughly 12%. Those estimates cover broader crypto activity. Tether’s claim refers to an undefined measure of Iran-linked stablecoin volume, so the figures are not directly comparable.
Blumenthal’s referral is not a finding of guilt
Blumenthal, the subcommittee’s ranking member, referred the findings to the U.S. Treasury and Justice departments. He asked the agencies to consider potential violations of the International Emergency Economic Powers Act (IEEPA) and the Bank Secrecy Act (BSA). IEEPA relates to U.S. sanctions powers, while the BSA covers financial institutions’ anti-money-laundering obligations.
A referral asks agencies to consider a matter. It is not a formal charge, a finding that Tether broke the law, or evidence that either department has opened an investigation. The available information reports no agency decision.
The report also said Tether confirmed it had received a June letter from the subcommittee but had not responded by the report’s publication. Tether’s explanation to lawmakers, if it provided one, for its screening and freeze decisions remains unknown.
Key questions and answers
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Did Tether freeze addresses before official designations?
Ardoino says it did, by an average of four weeks. Tether has not published the address set or calculation behind that average. -
What does the 84% USDT figure measure?
It is the share of the 846 sampled wallets that used USDT exclusively or nearly exclusively, not USDT’s share of Iran’s overall crypto activity. -
What happened to the 34 Al-Law-linked wallets?
The report says their USDT was not frozen until March 2024, after more than $34.6 million had left the addresses. -
Has Tether substantiated the claimed 94% decline?
Not with enough public detail to assess it. Tether has not specified the period, baseline, wallets or assets measured. -
Does Blumenthal’s referral mean Tether violated the law?
No. It asks Treasury and Justice to consider potential violations, but does not establish that any occurred.
Stablecoin issuers can restrict their tokens at specific addresses, giving them a significant role in enforcement. That power can help block illicit funds, but it also makes clear procedures and consistent decisions essential. In this dispute, headline averages tell us less than the unanswered question at the heart of the 34-wallet case: why were those addresses left unfrozen for so long?
U.S. Treasury seizures of Iran-linked crypto also show the broader stakes of enforcement.
