Senate Minority Report Scrutinizes Tether Response Times to Iran-Linked Wallets
A Senate subcommittee report alleges delays in Tether's blacklisting of Iran-linked wallets, while the stablecoin issuer maintains it has frozen hundreds of millions in illicit funds.
Democratic minority staff on the Senate Permanent Subcommittee on Investigations released a preliminary report on Sept. 28 examining 846 crypto wallets associated with Iran and regional groups. The report alleges that delays in Tether blacklisting certain identified wallets allowed tens of millions of dollars to move before the assets could be frozen.
Senator Richard Blumenthal, the ranking member of the subcommittee, has referred the findings to the Treasury and Justice departments. He requested that federal agencies investigate whether the identified delays represent isolated gaps or broader issues regarding Tether's compliance with anti-money laundering and sanctions regulations. These referrals do not indicate that Tether has violated federal law or that a new case has been opened by either department.
The Senate report analyzed a sample of wallets identified by the Treasury Department's Office of Foreign Assets Control and Israel's National Bureau for Counter Terror Financing. Investigators found that 84% of the wallets in their sample transacted exclusively or nearly exclusively in USDT. In one specific example, the report claimed that $34.6 million in USDT moved out of 34 wallets after an Israeli seizure notice was issued but before Tether blacklisted the addresses.
Tether issued a statement on the same day, reporting that it had successfully frozen approximately $550 million in USDT across wallets identified by US authorities as connected to Iran's central bank and related sanctions networks during 2026. CEO Paolo Ardoino stated that the company acts upon receiving credible information from authorities and noted that public blockchains provide investigators with visibility into fund movements.
The company's disclosed actions include freezing $344 million in USDT across two addresses in April and $130 million across four wallets in July. Tether did not provide a detailed breakdown of the total $550 million figure or directly address the specific claims regarding the $34.6 million in moved funds mentioned in the Senate report.
The report noted that Tether had not responded to a June 4 request for information and documents from the subcommittee as of the publication date. Meanwhile, a separate US forfeiture case is seeking $61 million in cryptocurrency allegedly tied to a network that moved over $1.5 billion in proceeds from black-market Iranian oil sales.
