Tether chief executive Paolo Ardoino hit back on 19 October at a Senate staff report that describes USDT as central to Iran’s shadow banking network. In a post on X, he said that since 2023 Tether has frozen wallets “on average 4 weeks prior to OFAC & NBCTF official sanction designation”, and that its freezes cut Iran-linked stablecoin volumes by 94%, CoinDesk reported. Neither figure comes with a period, a baseline or a list of addresses, so neither can be checked from outside the company.
The report he is answering is not new. Democratic minority staff of the Senate Permanent Subcommittee on Investigations (PSI), led by Ranking Member Richard Blumenthal of Connecticut, published it on 28 September 2026. It is a preliminary, 28-page staff document, not a finding of the subcommittee as a whole or of the Senate. Its most concrete example runs against Ardoino’s timing claim: 39 wallets that Israel listed for seizure in June 2023 over links to a Hezbollah money launderer, 34 of which Tether froze only in March 2024, after more than $34.6 million in USDT had moved out.
No charge or sanction has been brought against Tether. The report asks Treasury and the Justice Department to look into the company; a request to investigate is not a finding of wrongdoing, and Tether disputes the picture the report paints.
What the Senate staff report on Tether and Iran says
The document is titled “Crypto and Iran’s Shadow Banking Network”. Its staff looked at 846 wallets that the US Treasury’s Office of Foreign Assets Control (OFAC) or Israel’s National Bureau for Counter Terror Financing (NBCTF) had sanctioned or targeted for seizure over Iran ties. According to Unchained and Decrypt, which summarised the report on the day it came out, 84% of those wallets transacted exclusively or nearly exclusively in USDT.
The share is not the same on both lists. Among the 757 wallets on Israeli seizure lists, 87% were USDT-only or nearly so. Among the 101 wallets designated by OFAC, the figure was 57%. Those two groups add up to more than 846, which suggests some wallets appear on both lists; the summaries we read do not say how many.
“My new PSI report exposes how Tether and its flagship token have become central to Iran’s shadow banking system,” he said, as quoted by The Block. The report itself describes Tether as “a significant financial lifeline within Iran’s shadow banking network”, according to CoinDesk, and says that before 2024 the company did not comprehensively freeze flagged wallets. It argues that this lack of deterrence encouraged abuse, including a shift by Hamas from bitcoin toward USDT.
With the report, Blumenthal sent letters to Treasury Secretary Scott Bessent and Attorney General Todd Blanche. He asked them to examine possible breaches of the Bank Secrecy Act and of the International Emergency Economic Powers Act (IEEPA), and to say by 9 October whether any earlier inquiry into Tether had been narrowed, paused or closed. The letters cite press reports from October 2024 that Manhattan federal prosecutors had opened a Tether probe. As of 20 October, we found no public answer from Treasury or the Justice Department.
A note on sourcing: the report and letters are posted on the Senate Homeland Security committee’s website, but the files returned an access error when we tried to open them on 20 October. The figures above come from Unchained, The Block, Decrypt, Reuters, CoinDesk and crypto.news, whose accounts agree with each other.
39 Hezbollah-linked wallets, 34 frozen nine months later
In June 2023, the NBCTF named 39 wallets tied to Tawfiq Muhammad Sa’id Al-Law, a Beirut-based Syrian national whom the report describes as a Hezbollah money launderer. These wallets come from an Israeli seizure list, not from an Iran designation by OFAC. Tether froze five of them. According to the report, as summarised by Unchained and crypto.news, it froze the other 34 only in March 2024, and more than $34.6 million in USDT left those wallets in the meantime.
March 2024 is also when Washington acted. OFAC added Al-Law to its list of Specially Designated Nationals on 26 March 2024, according to the Treasury’s own notice, under its counter-terrorism programme, flagged as linked to Hezbollah, with one USDT address in the entry. Unchained reports that the 34 freezes came shortly before that designation.
One caveat sits in the report’s own footnotes. Footnote 56, as summarised by crypto.news, warns that some Israeli orders became public weeks or months after they were signed, so the staff used publication dates where they had them. That means the nine-month gap is measured from June 2023, but it is not established when Tether actually received or could have read the order. Nothing in the press accounts shows that Tether ignored a notice it had in hand; the report calls the company’s freezing since then “uneven and inconsistent”, according to Unchained’s summary.
Ardoino’s three numbers, and what they leave out
Ardoino’s post on 19 October made three claims. The first is the four-week average lead over OFAC and NBCTF designations since 2023. The second is that in 99% of cases Tether froze reported addresses before Chainalysis labelled them. The third is the 94% drop in Iran-linked stablecoin volumes, which he attributes to Tether’s freezes.
All three are Tether’s own figures. The company has not published the addresses, the number of cases, the time window or the baseline behind them, crypto.news noted. The 99% claim measures something else again: it compares Tether’s freezes with labels in a private analytics tool, not with the dates of official sanctions, as the Italian outlet Cryptonomist pointed out. We found no figure from Chainalysis, Elliptic or TRM Labs that confirms or contradicts the 94% decline.
Ardoino also took issue with how the report reached the public. Speaking remotely at DC Fintech Week in Washington the week before his post, he complained that it went to the media before Tether could review it, and said: “I believe it’s important for the public also to hear our side of the story,” CoinDesk reported. He added that the work “is not finished”.
His case rests on a goal he states plainly: “Our aim is to push out the bad actors from USDT.” He told CoinDesk those actors are moving to other channels outside US control. He did not say which channels, or how much money has moved to them.
Four weeks early or nine months late: two different clocks
The two sides are not measuring the same thing. Ardoino’s four weeks is an average over every freeze linked to OFAC or NBCTF since 2023. The Senate case is one cluster of 34 wallets from a single Israeli order in 2023. An average across hundreds of freezes can be early while a particular cluster was late. Both statements can be true at once.
The definition of “early” also matters. Tether’s own release of 28 September says its April 2026 freeze of more than $344 million acted on information from OFAC and US law enforcement, and that OFAC published the two addresses the following day. Freezing before a designation is made public can mean the issuer spotted the wallets first. It can just as well mean the authorities told the issuer before they told everyone else. Ardoino’s figure does not separate the two.
The report’s main charge, meanwhile, is about the years before 2024. Staff say, according to Unchained’s summary, that Tether did not appear to freeze any Israel-designated wallets from 2021 to May 2023. Ardoino’s four-week average starts in 2023, and none of his three figures covers 2021 or 2022.
The Iran-linked freezes Tether can document: about $550 million in 2026
On the day the report came out, Tether published a release on its Iran-linked freezes that did not mention the report. It says the company has supported the freezing of nearly $550 million in USDT in 2026 in wallets that US authorities tied to Iran’s central bank and sanctions networks.
Two of those actions can be matched against official records. OFAC’s notice of 24 April 2026 added two TRX addresses to the entry for the Central Bank of Iran (Bank Markazi). Its notice of 14 July 2026 added four more, taking the entry to six addresses. Tether puts the April freeze at more than $344 million and the July one at more than $130 million. Those two items come to about $474 million; the release does not say where the rest of the $550 million comes from.
| Figure | Who says it | Status |
|---|---|---|
| 846 Iran-linked wallets studied, 84% almost only in USDT | Senate PSI minority staff report, 28 Sept 2026 | Report figure, via press summaries |
| 87% of 757 Israel-listed wallets vs 57% of 101 OFAC wallets | Same report | Report figure, via press summaries |
| 34 of 39 Hezbollah-linked wallets frozen in March 2024; over $34.6M moved out first | Same report | Report figure; start date depends on when the Israeli order was public |
| Freezes on average 4 weeks before OFAC or NBCTF designation | Paolo Ardoino, 19 Oct 2026 | Tether’s claim, unverified |
| 99% of reported addresses frozen before Chainalysis labels | Paolo Ardoino, 19 Oct 2026 | Tether’s claim, unverified |
| Iran-linked stablecoin volumes down 94% | Paolo Ardoino, 19 Oct 2026 | Tether’s claim, no period or baseline |
| About $550M of Iran-linked USDT frozen in 2026 | Tether release, 28 Sept 2026 | About $474M itemised; OFAC address listings of 24 April and 14 July confirmed |
| Over 22M USDT frozen in more than 40 NBCTF cases, over 640 addresses | Tether release, 28 Sept 2026 | Tether’s figure |
All six central-bank addresses are on the TRON network. Across all its activity, Tether says it has frozen more than $5 billion, including more than $2.4 billion connected to US authorities, working with more than 340 agencies in 70 countries.
Separately, a federal civil forfeiture complaint seeks $61.2 million in USDT held on ten TRON addresses that prosecutors tie to Iranian oil proceeds, crypto.news reported. Tether froze those addresses in June and July 2025, and a warrant of 14 September 2026 authorised the government to take custody. The link to Iran is the prosecutors’ allegation, to be tested in that proceeding.
Washington pressure: Cantor Fitzgerald has until 23 October
Blumenthal has widened his inquiry. On 8 October he wrote to Brandon Lutnick, chairman of Cantor Fitzgerald, the New York firm that holds Tether’s reserves in custody, asking for its earnings from Tether, details of custody and reserve checks, and its anti-money-laundering and sanctions due diligence on Iran and Russia, with records from 1 January 2023, crypto.news reported. He set a reply date of 23 October.
The letter also asks about Howard Lutnick, Cantor’s former head and Commerce Secretary since February 2025, and the transfer of his interests to his sons. Cantor reportedly holds about 5% of Tether; Blumenthal estimates the stake’s value has risen from $600 million to about $10 billion, a figure we could not check. “Cantor Fitzgerald’s lucrative business arrangements with Tether come at the expense of America’s national security,” he wrote. That is his view, not an established fact, and we found no public reply from Cantor.
This is not the first time Tether’s name has come up with US prosecutors. In late October 2024 the Wall Street Journal reported that the Manhattan US Attorney’s office was investigating the company and that Treasury had weighed sanctions. Tether called the story “pure rank speculation”, and no official has confirmed such a probe since.
The stakes for Tether in Washington are higher than they were then. Its US-regulated stablecoin, USAT, issued through the federally chartered Anchorage Digital Bank, launched in January 2026 with Cantor as reserve custodian and Bo Hines, former executive director of the White House crypto council, as chief executive of Tether US. The GENIUS Act, the federal stablecoin law, takes effect on 18 January 2027 (what the GENIUS Act changes for stablecoins).
Politics could change the weight of the report. Blumenthal’s Democrats are in the minority, and the Republican majority sets the subcommittee’s agenda. CoinDesk noted that odds on the prediction market Kalshi of Democrats retaking the Senate have been climbing, without giving a figure. If they win it in the 3 November midterms, they would chair the subcommittee when the new Congress sits in January.
For EU readers: USDT left MiCA platforms over licensing, not sanctions
European users may notice that USDT has already disappeared from most regulated exchanges in the EU. That has nothing to do with the Senate report. Tether never applied for authorisation of USDT as an e-money token under MiCA, the EU’s crypto rulebook, so MiCA-licensed platforms have been dropping it: Coinbase Europe in December 2024, Crypto.com in January 2025, Binance for EEA trading pairs in March 2025, according to The Paypers and Cointelegraph. Our guide to the MiCA regulation explains why an unauthorised stablecoin cannot be offered by a licensed platform.
The last step came from the EU markets regulator. ESMA said on 8 October 2026 that authorised crypto-asset service providers should stop offering services on stablecoins that do not comply with MiCA, and that national supervisors should require any remaining exposures to be cleared no later than three months after its opinion, which points to 8 January 2027. In the meantime, any continuing service should be limited to what clients need to liquidate, convert, withdraw, transfer or safekeep such tokens. ESMA’s text names no token; USDT is affected because it has no MiCA authorisation. We covered ESMA’s January deadline for non-MiCA stablecoins when it was announced.
Holding USDT in a self-custody wallet remains legal in the EU, and the token is still reachable through decentralised exchanges and platforms outside the bloc. A freeze by Tether applies to a token wherever it sits, including in a private wallet, because the issuer controls the contract. No French, Italian or other EU regulator has commented on the Senate report, as far as we could find.
How a stablecoin issuer freezes a wallet
USDT is a dollar stablecoin issued by Tether on several blockchains. Its smart contracts include a blacklist function: once Tether adds an address, the tokens held there cannot be moved. Frozen funds can later pass to the authorities under a court order, as the $61.2 million forfeiture case above shows.
A bank blocks an account in its own books. A stablecoin issuer blocks an address on a public blockchain, where anyone can see the date of the freeze. The delays show up the same way: on-chain records are how Senate staff could count the $34.6 million that moved out of the 34 Hezbollah-linked wallets before they were frozen. For a beginner’s view of how these tokens work, see our guide to stablecoins.
What to watch next
Cantor Fitzgerald’s reply to Blumenthal is due on 23 October. Treasury and the Justice Department let the 9 October date in his letters pass without a public answer, and nothing on the record shows an open investigation into Tether. The midterms on 3 November will decide whether the report stays a minority staff document or becomes the starting point of a subcommittee with subpoena power.
On Tether’s side, the open question is data. If the company publishes the address list and time window behind the four-week and 94% figures, they can be tested against OFAC’s notices and on-chain records. The report’s own data will be easier to test once its footnotes and wallet lists can be read in full.