Tether CEO Emphasizes 94% Decrease in Iran-Related Transactions, Responds to Senate Report

U.S. Senate Report Highlights Tether's Delayed Response

A report from the U.S. Senate has been released, alleging that Tether, the issuer of the leading stablecoin USDT, is supporting Iran's illegal financial networks (shadow banking).

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 and for 99% of the times Tether froze the reported addresses before Chainalysis labelled them. Tether actions led to Iran-linked stablecoin volumes declining by 94%. The reality shows that Tether acts fast on new threats thanks to its law enforcement partnerships. @tether

--- Paolo Ardoino 🤖 (@paoloardoino) October 19, 2026

In response, Tether's CEO, Paolo Ardoino, strongly refuted these claims on social media, asserting that the company's swift actions have led to a significant reduction in related transactions.

The issue originated from a report titled "Tethered to Terrorism," published by the Democratic staff of the U.S. Senate Permanent Subcommittee on Investigations on September 28, 2026. The report analyzed 846 wallets that were sanctioned for involvement with Iran and its proxy forces (such as Hezbollah and Hamas) from June 2021 to August 2026. It concluded that USDT was primarily used in 84% of these transactions, which were misused for procuring military equipment and transferring funds for the Central Bank of Iran.

Furthermore, the report sharply criticized the company for alleged "delays" in asset freezing responses.

Hezbollah-Related Cases:
Out of 39 addresses designated by Israeli authorities in June 2023, Tether initially froze only 5, leaving the remaining 34 unaddressed until March 2024, during which over $34.6 million (approximately 5.47 billion yen) in USDT was reportedly leaked.
Unfrozen Fund Inflows:
In the spring of 2025, when $575 million (approximately 91 billion yen) worth of USDT flowed into specific operators, no action was taken, and the blocking of publicly disclosed Central Bank of Iran-related addresses was also delayed.

As a result, Senator Richard Blumenthal, the lead member of the subcommittee, requested investigations into the company by the Treasury and Justice Departments for potential violations of anti-money laundering laws.

Tether CEO's Rebuttal and Claims of 94% Decrease

In response to these accusations, CEO Ardoino directly countered the Senate's "analysis," claiming significant factual inaccuracies and making the following assertions.

Proactive Freezing Ahead of Public Agencies:
Since 2023, the company has voluntarily frozen accounts an average of 4 weeks prior to the official announcements of sanctions by OFAC (U.S. Department of the Treasury's Office of Foreign Assets Control) and Israeli authorities.

Speed Exceeding Private Analytical Firms:
In 99% of cases, Tether implemented freezes proactively before blockchain analysis firm Chainalysis could label them.
Transaction Reduction as a Result:
Through strong collaboration with law enforcement, Tether has reduced transaction volumes related to Iran by 94%.

However, details regarding the 94% decrease, such as the time frame, comparison standards, and whether it pertains solely to USDT or the entire industry, have not been disclosed, raising questions about transparency.

Significant Asset Freezing Achievements and Deepening Political Debate

Tether emphasizes its contributions to sanctions enforcement, stating that it froze approximately $550 million (about 87 billion yen) in funds from Iran-related addresses in 2026 alone. Including requests and cooperation from U.S. authorities, the company claims to have responded to the freezing of over $4.9 billion (approximately 775.9 billion yen) in illicit funds to date.

On the other hand, this issue extends beyond mere misuse of cryptocurrency and has implications for the political landscape within the U.S. Senator Blumenthal mentioned in a letter that since the new administration took office, there has been a trend of easing regulations and crackdowns in the cryptocurrency industry, as well as the background of financial institutions connected to cabinet members holding Tether shares and managing substantial assets.

There remains a significant gap between the private self-defense processes to prevent sanction evasion and the strict compliance standards demanded by authorities, suggesting that discussions regarding the regulatory stance on stablecoins are likely to remain contentious in the future.

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