Tether CEO challenges Senate report on Iran-linked USDT freezes

Key takeaways

  • Paolo Ardoino, chief executive of Tether, rejected a September 28 report from a US Senate subcommittee that accused the stablecoin issuer of being slow to freeze wallets tied to Iran and its proxies.
  • The central dispute is timing: Ardoino says Tether acts before sanctions designations, while the report finds delays in several cases.
  • The report, titled “Tethered to Terrorism,” reviewed 846 wallets sanctioned or targeted for seizure by the US Treasury’s Office of Foreign Assets Control (OFAC) or Israel’s National Bureau for Counter Terror Financing (NBCTF). It found that 84% transacted exclusively, or nearly exclusively, in USDT.
  • Tether says it has frozen reported addresses an average of four weeks before formal OFAC and NBCTF designations since 2023, and that in 99% of cases it acted before Chainalysis labeled them.
  • The company also points to a 94% decline in Iran-linked stablecoin volumes, which it attributes to law enforcement partnerships.

What happened

The disagreement became public when Ardoino pushed back on X against a report produced by Senator Richard Blumenthal and the minority staff of the Permanent Subcommittee on Investigations. The report argues that Tether was slow to freeze addresses connected to Iran-related actors, especially when compared with the pace of official designations.

Ardoino put the word “analysis” in quotation marks when describing Blumenthal’s work, signaling that he viewed the subcommittee’s findings as contestable. He defended Tether’s process by saying the company acted ahead of formal sanctions in most cases. According to Ardoino, since 2023 Tether has frozen reported addresses an average of four weeks before OFAC and NBCTF designations, and in 99% of cases before blockchain analytics firm Chainalysis labeled them.

The report presents a different picture. After the NBCTF designated 39 wallets linked to a Hezbollah money launderer in June 2023, it says Tether froze only five of them for months and blocked the other 34 in March 2024, shortly before OFAC sanctioned the same launderer. The subcommittee also says more than $34.6 million in USDT left those wallets after the seizure notice was published.

The report further states that Babak Zanjani, a sanctioned Iranian money launderer, posted Central Bank of Iran wallet addresses on X in December 2025, and that Tether had not blacklisted them as of September. In addition, it says three wallets tied to the Modex Exchange Company, a brokerage the report links to funding Iran’s central bank, took in $575 million in USDT between April and June 2025, and that Tether did not blacklist those wallets either.

Tether’s own figures, as reported earlier by CryptoPotato, present a more aggressive enforcement profile. On September 28, the company said it had helped US authorities freeze nearly $550 million in Iran-linked USDT this year, including more than $344 million across two addresses tied to the Central Bank of Iran in April. It also said it had frozen more than $22 million across over 40 cases referred by Israel’s counter-terror financing bureau. Across all cases, Tether says it had helped freeze more than $4.9 billion, including over $2.4 billion connected to US authorities.

Market context

The report’s finding that 84% of the reviewed wallets used USDT exclusively or nearly exclusively places stablecoin activity at the center of the dispute. It suggests that, among the wallets examined by the subcommittee, USDT was the dominant transaction instrument, not just one token among many.

That concentration matters because it turns compliance decisions into a visible public issue. When a stablecoin issuer can freeze addresses, the timing of those freezes can affect how long funds remain accessible and whether designated actors can move value before formal sanctions or seizure notices are published.

The comparison with Chainalysis adds another layer. Chainalysis is described in the source as a blockchain analytics firm, and Tether says it acted before the firm labeled addresses in 99% of cases. This does not eliminate the subcommittee’s concern about delays, but it shows that different institutions may reach different conclusions depending on whether they measure against official designations, analytics labels, seizure notices, or reported referrals.

Why it matters

For readers, the episode is less about a single company than about how stablecoin enforcement works in practice. The report focuses on whether Tether freezes addresses ahead of sanctions designations, while Tether argues that it acts early and points to large frozen balances and a sharp decline in Iran-linked stablecoin volumes.

The uncertainty lies in the definitions and the data set. The report analyzes 846 wallets, a specific sample of sanctioned or seizure-targeted addresses. Tether’s response emphasizes averages, percentages, and cumulative freeze totals. Both sides use the same general subject—USDT, Iran-linked actors, and sanctions-related wallets—but they appear to weigh different indicators.

There are also practical risks for market participants. If freezes are perceived as slow, enforcement authorities may question whether stablecoin issuers are doing enough to stop designated activity. If freezes are perceived as too rapid or opaque, users may worry about access to funds and the standards used to identify suspicious wallets. The source text does not resolve those concerns; it shows that a Senate subcommittee and Tether are publicly disagreeing about the same compliance record.

What to watch

The next signal will be whether either side releases more detailed case-by-case data. The report already names specific episodes, including the 39 NBCTF-designated wallets, the $34.6 million said to have left after a seizure notice, the Central Bank of Iran addresses posted by Babak Zanjani, and the $575 million in USDT tied to Modex Exchange Company wallets.

Ardoino’s claims about four-week early freezes, 99% action before Chainalysis labels, and a 94% decline in Iran-linked stablecoin volumes give Tether a counter-narrative. But the durability of that narrative depends on whether the cited time frames, case counts, and volume changes can be matched to the wallets and designations examined by the subcommittee.

For now, the factual record from the source is a public disagreement over timing, scope, and enforcement effectiveness. The stablecoin issuer says it has helped freeze more than $4.9 billion across all cases and nearly $550 million in Iran-linked USDT this year. The report says several cases show delays and that USDT dominated activity among the 846 wallets it reviewed.