Tether, the issuer of the world's largest stablecoin USDT, has taken coordinated action with U.S. authorities to freeze 41 wallets linked to Venezuelan oil-related sanctions evasion. This move, confirmed by Tether CEO Paolo Ardoino, specifically targets the use of USDT to circumvent international sanctions against Venezuela. The U.S. Treasury's Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) are key partners in this enforcement initiative.
The frozen wallets were actively using USDT for transactions within Venezuela's oil sector, where the stablecoin has become a primary medium of exchange. This action demonstrates Tether's operational role in sanctions enforcement and highlights the growing intersection of cryptocurrency compliance with international policy. "Tether has frozen forty-one wallets that were using USDT to evade sanctions on Venezuela's oil," stated Ardoino, as reported by the Atlantic Council.
Simultaneously, Tether faces renewed scrutiny following investigative reports linking Iran's Islamic Revolutionary Guard Corps (IRGC) to approximately $1 billion in cryptocurrency flows since early 2023, predominantly using USDT on the Tron network. Blockchain analytics firm TRM Labs identified these flows moving through two UK-registered exchanges, Zedcex and Zedxion, allegedly to bypass sanctions. The activity reportedly surged from about $24 million in 2023 to roughly $619 million in 2024, and around $410 million in 2025, leveraging Tron's low fees and fast settlement.
However, a critical distinction exists between the volume of tracked illicit flows and actual frozen assets. In a separate enforcement action in September 2025, following designations by Israel's National Bureau for Counter Terror Financing, Tether blacklisted 39 IRGC-linked addresses, freezing approximately $1.5 million in USDT—a figure confirmed by blockchain intelligence firm Elliptic. This underscores the gap between identifying large-scale crypto movements and the practical seizure of assets at a specific moment.
These developments underscore Tether's stated commitment to regulatory cooperation while placing the stablecoin issuer at the center of complex geopolitical financial enforcement. The actions are expected to impact USDT market liquidity and reshape trade dynamics, particularly for Venezuela's oil transactions, while increasing regulatory pressure on stablecoins globally.
