Senate Alleges Delays in Tether’s Sanctions Compliance Over 34 Addresses

Paolo Ardoino challenged Senate allegations about Tether’s sanctions compliance on October 19, 2026, saying the issuer froze flagged wallets an average of four weeks before official sanctions designations. His response disputes an investigation that identified delays in blocking Hezbollah-linked addresses and prompted Senator Blumenthal to request federal investigations.

Key takeaways

• Ardoino says Tether’s freezes preceded official designations by four weeks on average since 2023.
• Senate investigators allege delayed freezes affected 34 Hezbollah-linked addresses.
• Tether reported nearly $550 million in Iran-linked USDT freezes during 2026.
• A separate forfeiture complaint targets $61.2 million in USDT linked to alleged Iranian oil proceeds.

Tether’s sanctions compliance defense rests on freeze timing

Ardoino’s defense compares Tether’s actions with two separate benchmarks: official sanctions designations and blockchain analytics labels. In his October 19 post, he accused Blumenthal’s analysis of overlooking when the company acted.

Spanning the period from 2023 onward, the four-week average tracked freezes measured against listings issued by the U.S. Treasury’s Office of Foreign Assets Control, or OFAC, as well as Israel’s National Bureau for Counter Terror Financing, or NBCTF.

Separately, Ardoino claimed Tether had frozen reported addresses before Chainalysis labeled them in 99% of cases. That figure concerned analytics labels, rather than the timing of official sanctions.

He also attributed a 94% decline in Iran-linked stablecoin volumes to Tether’s enforcement actions and credited its law enforcement partnerships with helping the issuer respond to threats. Both the timing figures and the claimed volume reduction were presented as company assertions.

Senate investigators cite delays involving 39 addresses

Democratic staff of the Senate Permanent Subcommittee on Investigations alleged that Tether delayed blocking addresses associated with a Hezbollah money launderer. Their preliminary report examined 39 addresses identified by the Israeli bureau in June 2023.

The report noted that Tether froze five wallets early on, yet left the other 34 addresses unblocked until March 2024. Investigators found that over $34.6 million in USDT had moved out of the designated wallets after the seizure notice was made public.

The broader analysis, released by Blumenthal’s office on September 28, 2026, found that 84% of 846 wallets transacted exclusively, or nearly exclusively, in USDT. The senator alleged that the token helped Iranian networks transfer money across borders and support activities involving Iran’s central bank.

According to his office, Tether’s approach to freezing illicit wallets was inconsistent prior to 2024, and the company kept overlooking addresses that should have been acted upon.

Blumenthal referred the findings on Tether’s sanctions compliance to Treasury Secretary Scott Bessent and Attorney General Todd Blanche, requesting investigations into potential sanctions and banking-law violations. In his letters, he called for enforcement action should any violations be confirmed, pointing to the Bank Secrecy Act and the International Emergency Economic Powers Act as statutes the Treasury ought to weigh.

Reported USDT freezes and a separate forfeiture case

Tether reported nearly $550 million in Iran-linked USDT freezes during 2026 in a September 28 statement. The issuer described actions taken with information supplied by U.S. authorities.

Those included more than $344 million frozen across two addresses in April 2026. According to Tether, the addresses were added by OFAC to the Central Bank of Iran’s sanctions listing one day later. The statement also referenced a separate action from July involving four more wallets holding over $130 million combined.

Bessent revealed that OFAC had imposed sanctions on wallets linked to Iran’s central bank, and on-chain investigator Specter traced four TRON addresses tied to the July freezes, together holding roughly $131 million in USDT.

A separate federal civil forfeiture complaint seeks $61.2 million in USDT held across ten TRON addresses. Prosecutors allege the funds were connected to Iranian oil proceeds.

Court records show that Tether froze those addresses in June and July 2025. A warrant dated September 14, 2026, authorized government custody; the forfeiture complaint sought a court judgment transferring ownership of the assets to the United States.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.