Tether CEO Rejects US Senate Subcommittee Report Over Iran-Linked USDT Freeze Delays

Tether CEO Paolo Ardoino has publicly rejected allegations from a US Senate subcommittee report claiming that the stablecoin issuer was slow to freeze addresses associated with Iran and illicit networks. ## Senate Report Outlines Delays in Freezing High-Value Wallets The report, titled "Tethered to Terrorism" and released on September 28 by Senator Richard Blumenthal and the minority staff of the Permanent Subcommittee on Investigations, examined 846 wallets targeted or sanctioned by the US Treasury's Office of Foreign Assets Control (OFAC) or Israel's National Bureau for Counter Terror Financing (NBCTF). The investigation revealed that 84% of these wallets transacted exclusively or nearly exclusively in USDT. The subcommittee detailed specific delays, noting that after the NBCTF designated 39 wallets connected to a Hezbollah money launderer in June 2023, Tether froze only five for several months before blocking the remaining 34 in March 2024. Over $34.6 million in USDT exited those wallets following the initial seizure notice. Additionally, three wallets linked to Modex Exchange Company, a brokerage tied to funding the Central Bank of Iran, received $575 million in USDT between April and June 2025 without being blacklisted by Tether. The report also pointed to Central Bank of Iran wallet addresses posted on X in December 2025 by sanctioned Iranian money launderer Babak Zanjani, which remained active through September. ## Tether Highlights Proactive Enforcement and $4.9B in Total Freezes Ardoino disputed the findings, stating that since 2023, Tether has frozen flagged addresses an average of four weeks prior to formal OFAC and NBCTF designations. He added that Tether acted in 99% of cases before blockchain analytics firm Chainalysis applied labels, attributing a 94% drop in Iran-linked stablecoin volumes to law enforcement partnerships. On September 28, Tether confirmed it helped US authorities freeze nearly $550 million in Iran-linked USDT during 2025, including more than $344 million across two addresses tied to the Central Bank of Iran in April. The issuer also froze over $22 million across more than 40 cases referred by Israeli officials. Globally, Tether reports freezing over $4.9 billion in total assets, with more than $2.4 billion executed in cooperation with US law enforcement. As international lawmakers intensify oversight—reflected when France voted to tax crypto-to-stablecoin swaps—issuer compliance speed remains under scrutiny. Key Takeaways: * Senate investigation analyzed 846 illicit wallets and found 84% used USDT primarily. * Over $34.6 million fled 39 Hezbollah-linked addresses during an eight-month freeze delay. * Tether claims proactive freezes occur four weeks before official OFAC and NBCTF sanctions. * Total Tether freezes top $4.9 billion globally, including $550 million in Iran-linked funds in 2025. ## Why It Matters The friction between Tether and the Senate subcommittee highlights the growing tension between private stablecoin management and official regulatory expectations. While Tether points to billions in voluntary freezes and proactive cooperation, legislative investigators argue that multi-month execution gaps allow substantial funds to escape asset seizures. Moving forward, stablecoin issuers will likely face mounting pressure from governments to implement real-time, automated compliance protocols rather than relying on retroactive blacklisting.