Tether defends sanctions controls as Senate scrutiny of Iran-linked USDT activity intensifies

Traders Union
All News
Crypto
Tether defends USDT controls

Highlights

Tether CEO Paolo Ardoino claims the company froze suspicious addresses an average of four weeks before OFAC and NBCTF designations since 2023.
Ardoino says these early interventions resulted in a 94% drop in Iran-linked stablecoin volumes and outpaced Chainalysis labeling in 99% of cases.
Senate scrutiny intensifies as Senator Blumenthal investigates Tether's sanctions practices, focusing on pre-2024 enforcement gaps and ties to Cantor Fitzgerald and Bo Hines.

Tether’s response to Senate allegations

As reported by CoinDesk, Tether is pushing back against a report issued last month by Democrats on the Senate Permanent Subcommittee on Investigations that accuses the company of providing "a significant financial lifeline within Iran's shadow banking network." Chief Executive Paolo Ardoino says the probe overlooks the firm’s sanctions compliance work and its efforts to block suspicious transactions before formal designations by regulators and enforcement agencies.

Senator Richard Blumenthal, the subcommittee’s top Democrat, leads the effort, underscoring broader Democratic concerns that crypto is being used to support illicit finance. Ardoino says Tether freezes suspicious activity well before the U.S. Treasury Department’s Office of Foreign Assets Control and Israel’s National Bureau for Counter Terror Financing formally flag entities.

In a post on X, Ardoino says that since 2023 Tether has frozen addresses an average of four weeks before official OFAC and NBCTF sanctions designations, and before Chainalysis labels the reported addresses in 99% of cases. He argues those actions have led to a 94% decline in Iran-linked stablecoin volumes.

Political and industry implications

The dispute adds to regulatory and political pressure on the crypto sector as control of the Senate remains a live issue. Recent weeks have seen prediction market Kalshi assign higher odds to Democrats, including Blumenthal, returning to the majority, a shift that could expand his ability to investigate crypto-related matters.

Ardoino says Tether wants the public to hear its side of the story and maintains the company’s goal is to push bad actors out of USDT. He also says those actors are moving to other channels outside the control of both the United States and Tether.

The Senate report reviews activity over several years and focuses partly on the period before 2024, when it says Tether did not comprehensively freeze flagged wallets. It says that lack of deterrence invited abuse, with groups such as Hamas shifting from bitcoin and other cryptocurrencies to promoting USDT.

Since the report, Blumenthal has also been examining the relationship between Tether and its U.S. financial partner, Cantor Fitzgerald, which has close ties to the administration of President Donald Trump. Tether also names Bo Hines, Trump’s former White House crypto adviser, as chief executive of its U.S. division last fall.

In our earlier report on the WTO’s warning about lasting trade disruption from wars in Ukraine and the Middle East, we explained how conflict-linked risks are pushing companies to redesign supply chains and shipping routes for resilience, even at higher cost. The WTO also flagged a sharp hit to Middle East trade flows in 2024 and noted that tariffs and broader geopolitical fragmentation could keep reshaping global commerce even after hostilities ease.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.