Tether said Monday that it had assisted law enforcement in freezing nearly $550 million in Iran-linked USDT, issuing the statement as a Senate Democratic investigation cast the stablecoin as a central payment tool in Iranian-linked crypto activity.
The company’s response came the same day the Wall Street Journal reported on a newly released report from the Permanent Subcommittee on Investigations. That document argues USDT is Iran’s primary crypto payment rail and says Tether has not moved quickly enough to block sanctioned activity.
Senate investigation maps sanctioned addresses
The report, titled Tethered to Terror: Crypto & Iran’s Shadow Banking Network, was promoted by Sen. Richard Blumenthal of Connecticut. It examines 846 crypto addresses sanctioned by the United States or Israel that the subcommittee says are tied to Iran or to Iran-backed groups.
According to the report, some of the wallets have links to Iran’s central bank. The authors say USDT sits at the center of networks that allegedly connect Iranian oil proceeds and settlements involving Hezbollah, the Houthis, and Hamas.
The subcommittee argues that Tether has been too slow to freeze wallets and that this has created what it describes as a permissive environment for the movement of funds.
Tether pushes back with enforcement record
Tether answered those claims in a blog post published Monday. The company said it is fully committed to supporting global efforts against illicit finance and pointed to several cases in which it said it worked with law enforcement to halt illicit flows.
In that post, Tether referenced Treasury Secretary Scott Bessent’s disclosure of Operation Economic Outcast. It also said it works with Israel’s National Bureau for Counter Terror Financing.
Chief Executive Paolo Ardoino rejected the broader implication that USDT serves as a safe channel for sanctioned actors. He said Tether has consistently shown that the token is not a haven for sanctioned entities, terrorist organizations, or criminal networks.
USDT is the report’s main focus
The Senate analysis notes that Iran-linked groups also use bitcoin, ether, TRX, and other cryptocurrencies. But the report is primarily centered on USDT and presents Tether’s stablecoin as the dominant instrument in the transactions it reviewed.
By contrast, the document says Circle’s USDC played a different role, though the extracted source did not provide further detail on that comparison. The main dispute therefore centers less on whether crypto is being used and more on how central USDT is within those networks and how quickly freezes are carried out.
What is confirmed next
The immediate next step is public scrutiny of both documents released on Monday: the subcommittee’s report and Tether’s rebuttal. The Senate document is now public, and Tether has put its own enforcement figures and cooperation claims into the record.
For now, the confirmed facts are limited to the published allegations, Tether’s denial of the report’s premise, and the company’s statement that it helped freeze nearly $550 million in Iran-linked USDT. Whether lawmakers or agencies take additional action was not detailed in the source material.
Source: news.bitcoin.com