Tether CEO Paolo Ardoino has defended the stablecoin issuer against U.S. Senate scrutiny, stating that the company froze Iran-linked cryptocurrency addresses an average of four weeks before they were officially designated by the U.S. Office of Foreign Assets Control (OFAC) and Israel’s National Bureau for Counter Terror Financing (NBCTF). He also claimed the enforcement actions helped drive a 94% decline in Iran-related stablecoin transaction volumes.
Ardoino’s comments form part of Tether’s response to a Senate investigation, although the company has not disclosed the data, measurement period, baseline or wallet sample used to calculate the reported decline. He also maintained that Tether had frozen the addresses brought to its attention.
In a post on X, Ardoino disputed Senator Richard Blumenthal’s interpretation of the investigation. The four-week average refers to the time between Tether freezing an address and its subsequent official designation by OFAC or NBCTF. A separate 99% figure relates to how Tether’s actions compared with the timing of labels assigned by blockchain analytics firm Chainalysis.
The report, Tethered to Terrorism, was published on September 28 by Democratic staff of the Senate Permanent Subcommittee on Investigations. It examined 846 wallets sanctioned or targeted for seizure over suspected links to Iran and affiliated groups between June 2021 and August 2026. According to the report, 84% of the wallets transacted exclusively or almost exclusively in USDT.
One case cited in the investigation raises questions about the timing of Tether’s enforcement actions. In June 2023, Israel’s NBCTF designated 39 wallets linked to Hezbollah financier Tawfiq Muhammad Sa’id Al-Law. Tether froze five of those wallets, while the other 34 remained active until March 2024. More than $34.6 million in USDT reportedly left those addresses before they were frozen.
The report acknowledged that Tether had responded to official designations in some cases since late 2023, but described its overall performance as inconsistent. Its findings focused on both the prevalence of USDT among the wallets examined and the timing of individual freezes, contrasting the company’s broader defense with evidence of continued transfers in a specific case.
Tether Reports Nearly $550 Million in Iran-Linked USDT Freezes
In a separate disclosure released on September 28, Tether said it had supported the freezing of nearly $550 million in Iran-linked USDT during 2026. This included more than $344 million across two addresses in April and over $130 million across four wallets in July. The company did not itemize the remaining balance of approximately $76 million.
The Senate’s finding that 84% of the wallets relied almost entirely on USDT measures the stablecoin’s use within the sample, rather than the speed of Tether’s response. Similarly, the claimed 94% decline refers to Iran-related stablecoin activity. Keeping these measurements separate is important when evaluating the issuer’s role in cross-border payments and its ability to restrict transactions involving flagged addresses.
TRM Labs estimated Iran’s total cryptocurrency transaction volume at approximately $11.4 billion in 2024, falling to around $10 billion in 2025, a decline of roughly 12%. CoinGecko placed USDT’s market capitalization at approximately $183 billion.
These figures provide broader context for the debate over Tether’s compliance efforts. Given USDT’s significant position in the stablecoin market, regulators are closely concerned with how effectively issuers identify and restrict activity associated with potentially illicit financial transactions.
Senate Referral Puts Treasury and Justice Departments in Focus
Senator Richard Blumenthal, the subcommittee’s ranking member, referred the findings to the U.S. Treasury and Justice departments for further consideration. The referral asks officials to examine potential violations of sanctions and banking laws, including the International Emergency Economic Powers Act and the Bank Secrecy Act.
The next development will depend on whether either department pursues the matter. The report also stated that Tether had acknowledged receiving a letter from the subcommittee in June but had not responded by the time the investigation was published.
