Tether Reports $550 Million in Iran-Linked Freezes Amid Senate Investigation

Tether has announced that it assisted in freezing approximately $550 million in USDT linked to Iran during 2026. However, a preliminary report from the Senate Permanent Subcommittee on Investigations indicates that delays in blacklisting certain wallets allowed over $34 million to remain in circulation.

The report, released on September 28, analyzed 846 crypto wallets sanctioned by U.S. and Israeli authorities for their connections to Iran. It found that 84% of these wallets primarily transacted in USDT, raising concerns about Tether's compliance with anti-money laundering regulations.

Senator Richard Blumenthal, who leads the subcommittee, has referred the findings to the Treasury and Justice departments for further investigation. While Tether asserts that it has acted in accordance with law enforcement requests, the report questions the timing of its freezes, particularly regarding 39 wallets linked to an individual sanctioned for providing financial services to Hezbollah.

According to the Senate report, $34.6 million in USDT was transferred from these wallets after a seizure notice was issued but before they were officially frozen. Tether's response did not address this specific finding, nor did it provide a detailed breakdown of the total amount frozen.

In its defense, Tether highlighted its cooperation with U.S. authorities, noting that it had frozen over $344 million in USDT across two addresses following information from law enforcement. The company emphasizes the transparency of blockchain technology, which allows for visibility into fund movements.

As investigations continue, the implications of Tether's actions and the effectiveness of current sanctions enforcement remain under scrutiny, particularly in light of a separate forfeiture case involving $61 million in cryptocurrency linked to Iranian oil sales.