Tether CEO Paolo Ardoino has challenged a US Senate Democratic investigation into the use of USDT in Iran-linked financial activity. He says the company froze suspicious crypto addresses before authorities formally sanctioned them and that its actions helped reduce related stablecoin transaction volumes by 94%.
The claims follow a September report accusing Tether of failing to block some wallets tied to sanctioned networks. Tether can prevent USDT transfers from specific wallets through its token controls.
Ardoino Says Wallet Freezes Came Before Sanctions
In an October 19 post on X, Ardoino disputed Senator Richard Blumenthal's assessment of Tether's record. He said that since 2023, the company had frozen addresses an average of four weeks before the US Treasury's Office of Foreign Assets Control and Israel's National Bureau for Counter Terror Financing formally designated them.
Ardoino also said Tether acted before blockchain analytics firm Chainalysis labeled the reported addresses in 99% of cases. He argued that the Senate review did not account for those earlier actions.
According to Ardoino, Tether's freezes “led to Iran-linked stablecoin volumes declining by 94%.” However, his post did not provide the starting volume, measurement period or underlying transaction data needed to independently assess that figure.
Speaking remotely at DC Fintech Week on October 13, Ardoino also objected to the report reaching the media before Tether could examine it.
“I believe it's important for the public also to hear our side of the story,” he said. He maintained that the company seeks to remove bad actors from USDT.
Senate Report Examines 846 Iran-Linked Wallets
The Democratic staff of the Senate Permanent Subcommittee on Investigations released its report on September 28. Investigators reviewed blockchain records for 846 wallets that US or Israeli authorities had sanctioned or targeted for seizure over links to Iran and allied groups.
They found that 84% of those wallets had conducted transactions exclusively or almost exclusively in USDT. The report said Iranian networks used the stablecoin to move funds across borders and support currency operations, including activity connected to Iran's central bank.
The investigators also accused Tether of failing to consistently freeze flagged wallets before 2024. They cited the use of USDT by organizations including Hamas and argued that some suspicious addresses continued operating despite government warnings.
Blumenthal asked the Treasury and Justice departments to examine whether Tether had breached US sanctions or banking laws. The request did not establish that regulators had found a violation or opened a new enforcement case.
Tether Cites USD 550 Million in Iran-Linked Freezes
In a September 28 statement, Tether said it helped freeze nearly USD 550 million in Iran-linked USDT during 2026. The company described its cooperation with US and foreign law enforcement agencies. It also cited more than USD 344 million frozen across two addresses in April and more than USD 130 million across four wallets in July.
“Tether has consistently demonstrated that USD₮ is not a haven for sanctioned actors, terrorist organizations or criminal networks,” Ardoino said in that statement.
The Senate inquiry has also expanded to Tether's financial relationships. On October 8, Blumenthal asked Cantor Fitzgerald chairman Brandon Lutnick for records about the firm's stake in Tether, its handling of the company's assets and its checks for sanctions compliance.
The senator requested answers by October 23. Ardoino's figures on early freezes and lower Iran-linked volumes have not been independently verified. Blumenthal's requests do not amount to a finding of wrongdoing.
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