Tether Pushes Back on Senate Probe, Citing Drop in Iran-Linked Crypto Activity

Tether CEO Paolo Ardoino is pushing back against allegations that the company’s stablecoins have facilitated financial activity in Iran, defending the firm’s efforts to enforce sanctions and identify suspicious transactions.

The stablecoin issuer is responding to a report published last month by Democrats on the Senate Permanent Subcommittee on Investigations. The report accused Tether of providing “a significant financial lifeline within Iran’s shadow banking network.” Ardoino argued on Monday that the investigation overlooked the company’s positive contributions to sanctions enforcement.

Senator Richard Blumenthal, the subcommittee’s leading Democrat, spearheaded the investigation, which highlighted lawmakers’ concerns about cryptocurrency being used to facilitate illicit financial activity. Ardoino, however, maintains that Tether freezes suspicious wallets well before they are formally designated by authorities such as the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and Israel’s National Bureau for Counter Terror Financing (NBCTF).

In a post on X, Ardoino said that since 2023, Tether had frozen addresses an average of four weeks before OFAC and NBCTF officially sanctioned them. He also claimed that in 99% of cases, the company froze the reported addresses before Chainalysis identified them.

Ardoino further asserted that Tether’s enforcement efforts had contributed to a 94% decline in Iran-linked stablecoin transaction volumes.

The CEO also addressed the Senate report remotely during Washington’s DC Fintech Week last Tuesday. He criticized the decision to release the findings to the media before Tether had an opportunity to review them, arguing that the company should have been given a chance to present its perspective.

“I believe it’s important for the public also to hear our side of the story,” Ardoino said.

He explained that Tether’s objective was to remove malicious actors from its USDT ecosystem. However, he warned that those users could shift to alternative financial channels beyond the reach of both the company and U.S. authorities.

“Our aim is to push out the bad actors from USDT,” Ardoino said, adding that such actors were moving toward methods outside the control of the United States and Tether.

Although he acknowledged that the work remains unfinished, Ardoino expressed confidence in the company’s efforts and its role in combating illicit activity.

“I wake up in the morning and I look at myself in the mirror, and I know that we’re doing the right thing,” he said.

The Senate investigation examined activity dating back several years, focusing partly on the period before 2024, when lawmakers said Tether had failed to freeze flagged wallets comprehensively. According to the report, this lack of effective deterrence enabled abuse, with terrorist organizations such as Hamas shifting from Bitcoin and a mixture of cryptocurrencies toward promoting USDT for transactions.

Since the report’s publication, Blumenthal has also expanded his scrutiny to Tether’s relationship with Cantor Fitzgerald, its U.S. financial partner. Cantor Fitzgerald has close connections to President Donald Trump’s administration. Tether also appointed Bo Hines, a former White House crypto adviser under Trump, to lead its U.S. division last fall.

Meanwhile, prediction market Kalshi has recently shown rising odds that Democrats, including Blumenthal, could regain control of the Senate. Such a shift could give Blumenthal greater authority to investigate cryptocurrency-related issues and intensify congressional scrutiny of the industry.

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