Tether's Ardoino Says Iran-Linked USDT Volumes Fell 94% After Early Freezes

Update 09:49 UTC: The 846 wallets were examined over a window running from June 2021 to August 2026, and the report described Tether's responses to designations since late 2023 as occurring only "in some instances," calling the broader effort uneven and inconsistent.

Freezes Ahead of Official Designations

Tether chief executive Paolo Ardoino pushed back publicly on Monday against a Senate investigation into the company's Iran exposure, publishing compliance figures he says the probe ignored. In a post on X, Ardoino wrote that since 2023 the stablecoin issuer has frozen flagged addresses an average of four weeks before the Treasury Department's Office of Foreign Assets Control (OFAC) and Israel's National Bureau for Counter Terror Financing issued official designations, and that in 99% of cases it acted before blockchain analytics firm Chainalysis applied its own labels. Those early interventions, he argued, produced a 94% decline in Iran-linked trading volume. He directly disputed the framing of the senator behind the probe: “Senator Blumenthal's 'analysis' of Tether's sanctions report misses that, since 2023, Tether froze on average 4 weeks prior to OFAC & NBCTF official sanction designation.”

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The target of his response is a report dated 2026-09-28 from the Democratic staff of the Senate Permanent Subcommittee on Investigations, issued under the title “Tethered to Terrorism” by Senator Richard Blumenthal, the panel's top Democrat. It accused the issuer of supplying “a significant financial lifeline within Iran's shadow banking network,” a charge Democratic lawmakers have repeated as part of a broader concern that crypto supports illicit finance. Ardoino had already made the same case in person, speaking remotely at DC Fintech Week in Washington on 2026-10-13, where he criticized the report's release to the media before his company could review it. “I believe it's important for the public also to hear our side of the story,” he told the event. “Our aim is to push out the bad actors from USDT,” he added, noting that those actors are migrating to channels outside both United States oversight and Tether's own reach. He said the work is unfinished but defended the company's record, saying he knows “we're doing the right thing.”

The dispute also turns on the period before the company's current practice. The subcommittee's Democratic staff contends that prior to 2024 Tether did not comprehensively freeze wallets already flagged as risky, and that the shortfall allowed illicit users to keep operating; it argues Hamas and other groups, which had previously leaned on Bitcoin and a mix of digital assets, shifted toward promoting USDT as their vehicle. Tether's position is that its current proactive freezes are reducing exactly this activity. One caveat attaches to Ardoino's headline number: the company has not disclosed the measurement window or the method behind the 94% decline in Iran-linked stablecoin trading volume. Meanwhile, Blumenthal has opened an additional line of inquiry into the issuer's relationship with Cantor Fitzgerald, its close financial partner, which maintains Trump administration ties.

Further detail from the subcommittee's findings narrows the scope of the dispute. The 846 wallets were examined over a window running from June 2021 to August 2026, and the report described Tether's responses to designations since late 2023 as occurring only "in some instances," calling the broader effort uneven and inconsistent. It also names the Hezbollah figure behind the June 2023 case as Tawfiq Muhammad Sa'id Al-Law, and records that Tether confirmed receipt of the subcommittee's June letter without responding by the report's publication. Blumenthal's referral to Treasury and Justice asks both departments to weigh potential violations of the International Emergency Economic Powers Act and the Bank Secrecy Act. Separately, TRM Labs put Iranian crypto volume at about $11.4 billion in 2024 and $10 billion in 2025, a decline of roughly 12%.

Inside the 846 Wallets

The report's own numbers explain why the timing argument carries so much weight. Investigators examined 846 crypto wallets that were either sanctioned or flagged for seizure because of ties to Iran and its proxies, and found that 84% of them handled funds only, or almost only, in USDT. The staff also reconstructed a specific case: 39 addresses that Israel's counter-terror bureau linked in June 2023 to a Hezbollah money launderer. Tether froze five of those addresses early, but the remaining 34 stayed untouched until March 2024, and more than $34.6 million in USDT left the wallets after a seizure notice became public.

Blumenthal sent the findings to Treasury Secretary Scott Bessent and Attorney General Todd Blanche, asking both departments to determine whether Tether violated sanctions law and anti-money-laundering rules. The letter also questions the issuer's Washington connections: Cantor Fitzgerald, which Commerce Secretary Howard Lutnick ran until recently and his children now control, holds a roughly 5% stock position in Tether, and the company installed Bo Hines, President Trump's former White House crypto adviser, as chief executive of its United States division last fall. Tether's own counterfigures include nearly $550 million in Iran-linked USDT frozen during 2026, among it more than $344 million across two addresses in April and over $130 million across four TRON wallets in July, alongside more than $4.9 billion in assets frozen with authorities worldwide. Bessent has separately told reporters the United States could seize about $1 billion in Iran-linked cryptocurrency, roughly double what Tether says it blocked all year.

What the Referral Letter Sets Up

Reading the letter itself rather than the surrounding commentary, the crux is chronology, not politics. A senator's referral to the Treasury Secretary and Attorney General converts a report into a potential sanctions-law and AML review, and the review will turn on freeze dates. Tether's four-weeks-ahead average collides with the Hezbollah case, where 34 of 39 wallets went unfrozen until March 2024. Footnote 56 of the report concedes Israeli orders sometimes became public weeks or months after signing, so a freeze measured against publication may still trail the designation itself. With Bessent floating roughly $1 billion in possible seizures, and USDT being a non-interest-bearing dollar token rather than a yield-bearing stablecoin, the dispute now sits where only documented freeze records can settle it.