Tether Freezes $550 Million in USDT Linked to Iran Sanctions

Tether blocks $550M in sanctioned funds

Tether stated on September 28 that it assisted U.S. authorities in freezing approximately $550 million in USDT during 2026. These funds were located in digital wallets identified as connected to Iran's central bank and related sanctions networks. A freeze prevents the wallet owner from spending or sending the tokens.

This announcement came on the same day a Senate minority report questioned Tether's ability to enforce sanctions quickly. The report highlighted that USDT was the primary currency used in 84% of 846 wallets linked to Iran and its regional proxies.

Timeline of major freezes

• In April, Tether froze over $344 million across two specific addresses.
• In July, an additional $130 million was frozen across four wallets.
• The Treasury Department's Office of Foreign Assets Control (OFAC) officially added these addresses to its sanctions list shortly after the freezes occurred.
• Blockchain records on Tron confirm the blacklisting dates were April 23 and July 14.

Senate concerns on response time

A report by Senator Richard Blumenthal and the Senate Permanent Subcommittee on Investigations raised questions about Tether's internal controls. The study analyzed wallets sanctioned between June 2021 and August 2026. It alleged that Tether sometimes took weeks to blacklist illicit wallets or failed to act entirely. In one instance, the report claimed $34.6 million continued moving through sanctioned wallets after they were designated.

The report noted that Tether acknowledged a request for information regarding Iranian shadow banking on June 4 but had not provided a response by the time the report was published. The Senate study clarified that its 84% figure refers only to the specific set of wallets it examined, not all payments made by Iran.

Tether's global enforcement record

Tether did not directly address the Senate report in its statement. Instead, the company emphasized its cooperation with law enforcement agencies worldwide. CEO Paolo Ardoino stated that Tether acts when credible information is provided by authorities. The company noted that its global efforts have helped freeze more than $4.9 billion in assets to date.

Differing totals on frozen amounts

There is a discrepancy in the reported total value of frozen assets. While Tether cited a total of roughly $550 million for the year, blockchain analytics firm Chainalysis reported in July that freezes targeting the central bank wallets totaled almost $475 million. Tether's latest statement did not provide a detailed breakdown explaining how its total compares to the Chainalysis figure.

Next steps for compliance

The Senate report indicates that Tether has not yet responded to specific inquiries about its sanctions compliance processes. No further timeline for a response was given in the available materials.

• The Defiant

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