Paolo Ardoino, CEO of Tether, publicly pushed back on October 19, 2026 against a U.S. Senate report that questioned the stablecoin issuer’s handling of Iran-linked wallets. The report, titled 'Tethered to Terrorism' and released September 28 by Democratic staff of the Senate Permanent Subcommittee on Investigations, examined 846 crypto wallets tied to Iran and its proxies. Investigators found that 84% of those wallets transacted exclusively or almost exclusively in USDT.
Ardoino said that since 2023 Tether froze flagged addresses an average of four weeks before official designations by the U.S. Treasury’s Office of Foreign Assets Control and Israel’s National Bureau for Counter Terror Financing. In a post on X, he added that in 99% of the cases cited, Tether froze reported addresses before Chainalysis labeled them, and claimed Tether’s actions contributed to a 94% decline in Iran-linked stablecoin transaction volumes.
The Senate staff’s report also detailed a specific case involving 39 addresses that Israel’s counter-terror bureau linked in June 2023 to a Hezbollah money launderer. According to the report, Tether froze five addresses early but did not block the remaining 34 until March 2024. More than $34.6 million in USDT reportedly moved out of those wallets after a seizure notice became public. Senator Richard Blumenthal sent the findings to Treasury Secretary Scott Bessent and Attorney General Todd Blanche, requesting investigations into potential sanctions and anti-money-laundering violations.
Tether has defended its compliance record, saying it helped freeze nearly $550 million in Iran-linked USDT in 2026, including more than $344 million across two addresses in April and over $130 million across four TRON wallets in July. Ardoino also said Tether has worked with authorities worldwide to freeze more than $4.9 billion in assets. However, the Senate report’s footnote 56 noted that Israeli seizure orders sometimes became public weeks or months after being signed, complicating the timing dispute. Meanwhile, Treasury Secretary Bessent told reporters the United States could seize about $1 billion in Iran-linked cryptocurrency, nearly double the amount Tether says it blocked all year.
The report also raised questions about Tether’s U.S. connections, noting that Cantor Fitzgerald—formerly run by Commerce Secretary Howard Lutnick and now controlled by his children—owns about 5% of Tether. Blumenthal questioned whether that relationship has contributed to loose oversight. The dispute highlights the centralized enforcement capability of USDT: Tether can freeze tokens at the contract level, which allows rapid action but places substantial compliance responsibility on the company.
