TL;DR
- Tether CEO Paolo Ardoino says the company froze sanctioned addresses an average of four weeks before official designations since 2023.
- Senate investigators examined 846 Iran-linked wallets and found that 84% used USDT exclusively or almost exclusively.
- The dispute centers on enforcement timelines, with Tether defending its cooperation with authorities while lawmakers seek investigations into potential sanctions and anti-money-laundering violations.
Tether CEO Paolo Ardoino has challenged a US Senate report questioning the stablecoin issuer’s handling of Iran-linked wallets, arguing that the company acted before official sanctions announcements in many cases. His response puts the timing of blockchain enforcement under scrutiny as regulators assess how effectively crypto companies prevent illicit financial activity.
In an October 19 post, Ardoino said Tether froze flagged addresses an average of four weeks before official designations by the US Treasury’s Office of Foreign Assets Control (OFAC) and Israel’s National Bureau for Counter Terror Financing (NBCTF) since 2023.
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…
— Paolo Ardoino 🤖 (@paoloardoino) October 19, 2026
Tether’s Ardoino Defends Early Wallet Freezes
Ardoino also claimed that Tether froze reported addresses before Chainalysis labeled them in 99% of the cases he referenced. He argued that the Senate analysis overlooked these timelines when evaluating the company’s compliance record.
The executive further attributed a 94% decline in Iran-linked stablecoin transaction volumes to Tether’s enforcement measures and cooperation with law enforcement agencies. However, the figures remain company claims, and the available statement does not provide a complete dataset to independently verify the calculations or establish how much of the decline resulted directly from wallet freezes.
The distinction matters because blockchain analytics labels, official sanctions designations, and an issuer’s decision to freeze tokens represent separate events. A company may identify suspicious activity before authorities publish a designation, but earlier action in some cases does not necessarily resolve allegations involving other wallets.
Tether’s position also highlights a practical feature of centralized stablecoins. Unlike decentralized assets that generally cannot be frozen by a single issuer, USDT can be restricted at the token-contract level when Tether exercises its administrative powers. That capability allows enforcement actions to happen quickly, although it also places significant responsibility on the company to apply its controls consistently.
Senate Report Questions USDT Compliance Practices
Senator Richard Blumenthal’s investigation presents a different account. Democratic staff of the Senate Permanent Subcommittee on Investigations reported that 84% of 846 Iran-linked wallets in their sample transacted exclusively or nearly exclusively in USDT.
Investigators also examined 39 addresses identified by Israeli authorities in June 2023 as linked to a Hezbollah money launderer. According to the report, Tether froze five addresses earlier but did not block the remaining 34 until March 2024. Investigators said more than $34.6 million in USDT moved out of the wallets after the seizure notice was published.
