Tether CEO Rejects Senate Criticism as Iran Controversy Escalates

Tether CEO Paolo Ardoino has defended the company against U.S. Senate allegations, claiming that Tether froze Iran-linked cryptocurrency wallets an average of four weeks before they were officially sanctioned by the U.S. Office of Foreign Assets Control (OFAC) and Israel’s National Bureau for Counter Terror Financing (NBCTF). He also said these actions helped reduce Iran-related stablecoin transaction volumes by 94%.

The remarks were made in response to a Senate investigation, but Tether has not released the underlying data, reference period, baseline or wallet sample used to calculate the claimed decline. Ardoino also reiterated that the company had frozen the addresses reported to it.

In a post on X, Ardoino disputed Senator Richard Blumenthal’s interpretation of the findings. The four-week average measures the time between a Tether freeze and a subsequent official designation by OFAC or NBCTF. The separate 99% figure refers to the timing of Tether’s actions compared with 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 reviewed 846 wallets sanctioned or targeted for seizure over suspected connections to Iran and its affiliated groups between June 2021 and August 2026. The report found that 84% of the wallets conducted transactions almost exclusively or entirely in USDT.

One example in the investigation challenges Tether’s claim of acting ahead of official designations. In June 2023, Israel’s NBCTF identified 39 wallets linked to Hezbollah financier Tawfiq Muhammad Sa’id Al-Law. Tether froze five addresses, while the other 34 remained active until March 2024. During that interval, more than $34.6 million in USDT reportedly left those wallets.

The report acknowledged that Tether had acted on official designations in some cases since late 2023, but characterized its overall response as inconsistent. Its findings examined both the use of USDT by the wallets under investigation and the timing of individual freezes, highlighting continued transfers in the documented case.

Tether Reports Nearly $550 Million in Iran-Related USDT Freezes

In a separate announcement on September 28, Tether said it had supported freezes involving nearly $550 million in Iran-linked USDT during 2026. The total included more than $344 million across two addresses in April and over $130 million across four wallets in July. The company did not disclose a detailed breakdown of the remaining approximately $76 million.

The Senate’s finding that 84% of the wallets relied almost exclusively on USDT describes stablecoin usage within the sample, not the speed of Tether’s response. Similarly, the company’s reported 94% decline concerns Iran-related stablecoin transaction volumes. These figures measure different aspects of the issue and should be evaluated separately.

TRM Labs estimated Iran’s total cryptocurrency transaction volume at approximately $11.4 billion in 2024, falling to around $10 billion in 2025, a decrease of roughly 12%. CoinGecko valued USDT’s market capitalization at approximately $183 billion.

These figures provide context for the growing scrutiny of Tether’s compliance procedures. Given USDT’s substantial presence in the stablecoin market, regulators are examining how effectively the issuer identifies and restricts activity potentially connected to sanctioned entities and illicit financial networks.

Senate Referral Puts Federal Enforcement in Focus

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 examine potential sanctions and banking-law violations, including under the International Emergency Economic Powers Act and the Bank Secrecy Act.

The next step depends on whether either department pursues the allegations. The report also stated that Tether acknowledged receiving a letter from the subcommittee in June but had not responded by the time the findings were released.