More than $34.6 million moved before Tether blockade

Of 846 selected crypto wallets linked to Iran and regional groups by U.S. or Israeli authorities, 84% traded exclusively or almost exclusively in USDT. Tether claims to have frozen nearly $550 million in Iran-related tokens in 2026, but Senate researchers assert that delays allowed tens of millions of dollars to flow through. The question is whether those delays are isolated incidents.

84% of a selected group of 846 wallets

The preliminary report from Democratic minority staff of the U.S. Senate Permanent Subcommittee on Investigations was released on September 28. The researchers examined 846 wallets that had been sanctioned or marked for seizure by U.S. or Israeli authorities due to ties to Iran or regional groups. The evidence reviewed spans more than five years, up to August 2026.

The 84% figure is not a statement about all Iranian crypto wallets or the share of all USDT transactions that are illegal. The report used 'primarily' for a digital currency when it represented more than 80% of the total transaction value of a wallet. The figures also do not indicate what portion of Iranian sanction evasion occurs via crypto.

USDT can move across different blockchains, but Tether can blacklist addresses as the issuer and prevent tokens from being moved from those addresses. Thus, the discussion revolves not only around the use of the stablecoin but also how quickly addresses are blocked. The rules surrounding USDT and access for European trading platforms are also under scrutiny; the regulation of USDT on European exchanges forms a broader context for this discussion.

Tether cites freezes, researchers point to delays

Tether reported that actions related to USDT froze approximately $550 million in wallets linked by U.S. authorities to the Iranian central bank and Iranian sanction networks in 2026. The company stated that it helped block more than $344 million on two addresses following information from OFAC and other U.S. law enforcement agencies. In July, Tether reported a freeze of over $130 million on four wallets after the Treasury Department added new blockchain addresses to the sanctions list.

These two announced actions together amount to at least $474 million. Tether did not provide a breakdown by wallet that would allow the total amount of approximately $550 million to be fully verified.

Senate staff also examined 39 wallets that the Israeli NBCTF linked in June 2023 to Tawfiq Muhammad Sa'id al-Law, who was later sanctioned by the U.S. Treasury for providing financial services to Hezbollah. Five addresses had already been blocked; the remaining 34 were reportedly frozen only in March 2024. In the interim, according to the researchers' calculations, more than $34.6 million in USDT moved from those wallets.

That amount pertains to this specific group of addresses, not all Iranian wallets. The findings also do not constitute a judicial determination that Tether violated U.S. law. The issue touches on broader questions regarding investigations into Iran-related transactions and sanction compliance among crypto companies, but the cases are not the same.

Blumenthal calls for compliance investigation

Senator Richard Blumenthal, the Democratic vice chair of the subcommittee, has forwarded the findings to the Treasury Department and the Justice Department. He is asking the agencies to investigate whether the delays indicate shortcomings in Tether's anti-money laundering and sanction policies. That referral does not prove that Tether violated the law and does not mean that either department has opened a new investigation.

The report states that Tether received a request from the subcommittee on June 4 for information and documents but had not responded by the time of publication. The company's public statement on September 28 did not directly address the analysis of the 846 wallets or the example of the $34.6 million.

Tether CEO Paolo Ardoino stated that the company acts when authorities provide credible information. He also pointed out that public blockchains give researchers visibility into money flows. A previous audit of Tether's financial position addresses a different question: it does not speak to the timing of individual sanction freezes.

The two series of events also occur in different timeframes. The wallet example from the researchers pertains to a report from 2023 and freezes in 2024; the actions highlighted by Tether took place in 2026. Together, they show that issuers can block large amounts after addresses have been identified, while a delay before blocking may allow for further transactions.

Separately, a U.S. forfeiture case is attempting to seize approximately $61 million in crypto allegedly linked to illegal Iranian oil trade. Prosecutors claim that the broader network moved more than $1.5 billion in proceeds and was involved in sanction evasion and money laundering. That case is separate from the Senate investigation and does not constitute evidence of wrongdoing by Tether. The outstanding question for the departments is whether the delays described by Senate staff were isolated gaps or indicative of broader shortcomings.

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