Tether Claims Senate Probe Overlooks Progress in Curbing Iran-Related Volumes

Tether CEO Paolo Ardoino is defending the company against allegations that its stablecoins have supported financial activity in Iran, arguing that its efforts to block suspicious wallets and enforce sanctions have helped reduce illicit transactions.

The comments follow a report issued last month by Democrats on the Senate Permanent Subcommittee on Investigations. The report accused Tether of providing “a significant financial lifeline within Iran’s shadow banking network.” Ardoino said Monday that the investigation overlooked the company’s efforts to identify suspicious activity and prevent sanctioned entities from using its services.

Senator Richard Blumenthal, the subcommittee’s top Democrat, led the inquiry, reflecting lawmakers’ growing concerns about cryptocurrency’s role in illicit finance. Ardoino countered that Tether frequently freezes suspicious addresses before they are formally sanctioned by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and Israel’s National Bureau for Counter Terror Financing (NBCTF).

In a post on X, Ardoino said that, since 2023, Tether had frozen addresses an average of four weeks before OFAC and NBCTF officially designated them. He also claimed the company acted before Chainalysis labeled the addresses in 99% of cases.

According to Ardoino, Tether’s enforcement efforts have contributed to a 94% decline in stablecoin transaction volumes linked to Iran.

He repeated his criticism of the report during a remote appearance at Washington’s DC Fintech Week last Tuesday. Ardoino objected to the findings being shared with the media before Tether had a chance to review them, saying the public should also hear the company’s account.

“I believe it’s important for the public also to hear our side of the story,” he said.

Ardoino said Tether is working to remove illicit actors from the USDT ecosystem but warned that blocking them from the stablecoin could push them toward alternative payment channels outside the reach of both the company and U.S. authorities.

“Our aim is to push out the bad actors from USDT,” he said, adding that these groups were moving toward methods beyond their control.

While acknowledging that the work remains unfinished, Ardoino said he remains confident in Tether’s approach.

“I wake up in the morning and I look at myself in the mirror, and I know that we’re doing the right thing,” he said.

The Senate report reviewed activity over several years, with particular attention to the period before 2024. Investigators alleged that Tether had not comprehensively frozen flagged wallets during that time. They argued that the gaps allowed misuse to continue, claiming that terrorist organizations such as Hamas shifted from Bitcoin and other cryptocurrencies toward promoting USDT for transactions.

Since releasing the report, Blumenthal has broadened his scrutiny to Tether’s relationship with Cantor Fitzgerald, its U.S. financial partner, which has close ties to President Donald Trump’s administration. Tether also appointed Bo Hines, Trump’s former White House crypto adviser, to lead its U.S. division last fall.

The prospect of a change in Senate control could add another dimension to the investigation. Prediction market Kalshi has recently shown increasing odds that Democrats, including Blumenthal, could regain a majority. If they do, Blumenthal could gain greater investigative authority, potentially increasing congressional scrutiny of the cryptocurrency sector.