Tether CEO Paolo Ardoino has rejected criticism from U.S. lawmakers, saying the company froze Iran-linked crypto addresses an average of four weeks before they were officially designated by the U.S. Office of Foreign Assets Control (OFAC) and Israel’s National Bureau for Counter Terror Financing (NBCTF). He also attributed a 94% decline in Iran-related stablecoin transaction volumes to these enforcement efforts.

The comments came as Tether responded to a Senate investigation, though the company has not disclosed the underlying data, measurement period, baseline or wallet sample supporting the reported decline. Ardoino also said the company had frozen the addresses identified in the allegations.

In a post on X, Ardoino challenged Senator Richard Blumenthal’s interpretation of the findings. The four-week average refers to the period between Tether freezing an address and its subsequent official designation by OFAC or NBCTF. A separate 99% figure cited by Ardoino compares Tether’s actions with the timing of labels applied by blockchain analytics firm Chainalysis.

The report, Tethered to Terrorism, was released on September 28 by Democratic staff of the Senate Permanent Subcommittee on Investigations. It examined 846 wallets sanctioned or targeted for seizure over suspected links to Iran and its affiliated groups between June 2021 and August 2026. The investigation found that 84% of the wallets used USDT exclusively or almost exclusively.

One case cited in the report raises questions about the timing of Tether’s response. In June 2023, Israel’s NBCTF designated 39 wallets connected to Hezbollah financier Tawfiq Muhammad Sa’id Al-Law. Tether froze five wallets, while the remaining 34 stayed active until March 2024. More than $34.6 million in USDT reportedly moved out of those wallets during that period.

The Senate report acknowledged that Tether had acted on official designations in some cases since late 2023 but described its overall response as uneven. The findings examined both USDT’s widespread use among the wallets under review and the timing of specific enforcement actions, highlighting continued transfers in at least one documented case.

Tether Says Iran-Linked USDT Freezes Reached Nearly $550 Million

In a separate disclosure published on September 28, Tether said it had supported the freezing of nearly $550 million in Iran-linked USDT during 2026. The amount included more than $344 million across two addresses in April and over $130 million across four wallets in July. The company did not provide a detailed breakdown of the remaining approximately $76 million.

The Senate’s finding that 84% of the wallets relied almost entirely on USDT measures stablecoin usage within the sample, not the speed of Tether’s enforcement actions. Likewise, the company’s claimed 94% decline refers to Iran-related stablecoin transaction volumes. These are separate measures and should not be treated as interchangeable when evaluating Tether’s compliance efforts.

TRM Labs estimated Iran’s overall cryptocurrency transaction volume at about $11.4 billion in 2024, declining to approximately $10 billion in 2025, a drop of roughly 12%. CoinGecko, meanwhile, placed USDT’s market capitalization at around $183 billion.

These figures add context to the scrutiny surrounding Tether’s compliance procedures. Given USDT’s substantial market presence, regulators are examining how effectively the issuer identifies and restricts transactions potentially connected to sanctioned entities or illicit financial activity.

Treasury and Justice Departments Asked to Review Senate Findings

Senator Richard Blumenthal, the subcommittee’s ranking member, referred the report to the U.S. Treasury and Justice departments. The referral asks federal officials to assess potential sanctions and banking-law violations, including under the International Emergency Economic Powers Act and the Bank Secrecy Act.

Whether either department initiates further action remains uncertain. The report also stated that Tether had acknowledged receiving a letter from the subcommittee in June but had not responded by the time the findings were published.