Tether has pushed back against a recent Senate investigation that portrayed its USDT stablecoin as a major conduit for Iranian financial activity, arguing that the inquiry overlooked the company’s proactive compliance efforts and their measurable impact on reducing related transaction volumes.
Last month, Democratic staff on the Senate Permanent Subcommittee on Investigations, led by ranking member Senator Richard Blumenthal of Connecticut, issued a report examining hundreds of wallets tied to Iran and its regional proxies.
The analysis concluded that a large majority of these addresses had transacted primarily or almost exclusively in Tether’s dollar-pegged token, describing USDT as a key element in the country’s parallel banking arrangements for moving funds around international restrictions.
The report also criticized Tether’s historical freeze practices, particularly in the period before 2024, suggesting that incomplete blocking of flagged addresses created conditions that allowed misuse.
In one cited example, investigators noted that certain terrorist groups had shifted toward promoting USDT after earlier reliance on bitcoin and other digital assets.
Paolo Ardoino, Tether’s chief executive, responded publicly on Monday by contending that the senator’s assessment failed to account for the firm’s record of acting ahead of official government designations.
In a post on the social platform X, he stated that since 2023 Tether has, on average, frozen relevant addresses four weeks before formal sanctions listings by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) and Israel’s National Bureau for Counter Terror Financing.
Senator Blumenthal's "analysis" of Tether's sanctions report misses that, since 2023, Tether froze on average 4 weeks prior to OFAC & NBCTF official sanction designation and for 99% of the times Tether froze the reported addresses before Chainalysis labelled them.
Tether…
— Paolo Ardoino 🤖 (@paoloardoino) October 19, 2026
He further claimed that in 99 percent of the cases involving reported addresses, the company completed freezes before blockchain analytics firm Chainalysis applied labels to them.
Ardoino attributed a 94 percent decline in Iran-linked stablecoin volumes to these actions, emphasizing that partnerships with law enforcement enable the company to respond quickly to emerging risks.
The executive reinforced these points during a remote appearance at DC Fintech Week in Washington the previous Tuesday.
He expressed frustration that the Senate findings reached the media before Tether had an opportunity to examine them, stressing that the public should also hear the company’s perspective.
Ardoino framed Tether’s objective as removing bad actors from the USDT ecosystem, noting that such parties often migrate to channels outside both US jurisdiction and the firm’s reach.
While acknowledging that the work remains ongoing, he voiced personal conviction in the approach, saying he is confident the company is pursuing the correct course.
The Senate report’s timeframe extended across multiple years and placed particular emphasis on pre-2024 activity, when investigators said freezes of designated wallets were not applied comprehensively.
Tether has previously highlighted cooperation with authorities that supported the immobilization of substantial sums of Iran-connected USDT during 2026.
Separately, Blumenthal has continued examining Tether’s ties to its U.S. financial partner, Cantor Fitzgerald, which maintains connections to the current administration; the firm also appointed former White House crypto adviser Bo Hines to lead its domestic operations.
These exchanges occur against a backdrop of ongoing congressional attention to how digital assets intersect with sanctions enforcement and illicit finance. Prediction markets have recently indicated rising prospects that Democrats could regain a Senate majority, which would expand the investigative authority available to figures such as Blumenthal on cryptocurrency-related matters.
